It seemed like a great deal for Connecticut. Until it wasn't.
Department of Economic and Community Development
Since 2011, Connecticut has bonded nearly $1.8 billion for economic development, but the effort has produced little effect on the state’s economy. During the seven year period from 2011 through 2017, Connecticut’s gross domestic product declined 1.6 percent when adjusted for inflation, according to figures from the Bureau of Economic Analysis.
Connecticut’s bond commission approved over $80 million in economic assistance for 16 different companies — including giants like Electric Boat, Walgreens and PriceWaterhouseCoopers — but the grants and loans drew some critical questions from panel members.
It’s easy to see the rationale behind the deal. How could offering pasty-faced Connecticut residents direct flights to Ireland fail to rake in the cash? But things didn’t quite take off as expected so now, along with buses and trains, Connecticut is subsidizing airline travel — a sort of public transportation system for the sky.
As Gov. Dannel Malloy and the state bond commission raced through their votes on $350 billion in new borrowing Friday, Connecticut’s credit rating was downgraded by Fitch Ratings Agency, giving Connecticut the third worst bond rating of the 50 states. But Connecticut’s lagging economy and heavy debt burden did not prevent the bond commission from borrowing nearly $50 million to give loans and grants to companies through the Department of Economic and Community Development.
Since it began in 2011 Gov. Dannel Malloy’s controversial First Five program has awarded $381.6 million in grants and tax credits to major Connecticut companies and it has done so with virtually no public oversight. But that might change if a bill backed by state Comptroller Kevin Lembo is able to jump the legislative hurdles and get Malloy’s signature.