Lembo hopes RI example will lead CT to disclose corporate aid

Though Connecticut officials balked at creating a publicly searchable database to track corporate welfare, its chief advocate is hoping an example from across the state line will change minds here.

Rhode Island’s Division of Taxation released a late summer report that showed 87 percent of all funds awarded through the state’s six major tax incentive programs — $15.6 million — went to one company, CVS Corp.

Connecticut’s comptroller, Kevin P. Lembo, was careful neither to assess the merits of Rhode Island’s corporate assistance programs, nor to assert that a parallel situation likely exists here.

But he did say in a recent interview he continues to think that Connecticut taxpayers would like access to this type of information, just as those in Rhode Island likely followed the CVS reports with great interest.

“I really think decision-making can only be more sound when you have this type of disclosure,” Lembo said.

Granting the public easy access to state-sponsored business aid, in the long run, “can only raise the public’s comfort level with any type of economic development strategy,” he added.

Rhode Island has been tracking and reporting state aid to businesses since 2008.

The Connecticut comptroller proposed a bill during the 2013 General Assembly session that would have required Gov. Dannel P. Malloy’s administration to establish a database for tax credit and other economic assistance programs. It would have allowed the public to review the types of assistance provided, and how well companies met performance standards linked to them, such as numbers of jobs created.

Lembo’s fellow Democrats, who control the House of Representatives, unanimously adopted the bill. But the Senate, also controlled by Democrats, never took up the bill.

Senate Democratic leaders described the Malloy administration as “OK” and “neutral” about the bill.

Two top Malloy officials — budget chief Benjamin Barnes and Revenue Services Commissioner Kevin Sullivan — raised concerns about the measure during a committee hearing, while Economic Development Commissioner Catherine Smith opposed it outright.

“The requirement to disclose the economic benefits derived from each project would create a competitive disadvantage for the state in its negotiations with existing companies within Connecticut and with any new companies that may consider relocating to the state,” Smith told the Finance, Revenue and Bonding Committee.

Barnes testified that while “many of the ideas … are laudable, there would be significant financial costs and staff time commitments” in creating the database and related reports.

And Sullivan suggested holding off on the bill to first see whether state agencies could increase public access without a statutory mandate, as recommended by a business tax task force he chaired in 2012.

Though he wouldn’t rule out re-introducing the bill in the 2014 legislative session, which starts in early February, Lembo said he remains hopeful he can negotiate with the Malloy administration to expand public access to corporate assistance voluntarily.

“I believe they can already do most of the things called for in the original bill,” he said. “There really is no reason we can’t get it done.”

The governor’s spokesman, Andrew Doba, said, “The governor shares the comptroller’s goal of increasing transparency, which is why we supported the bill last session. We look forward to continuing to partner with Comptroller Lembo on this critically important issue.”

 

 

 

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