HARTFORD – The state Senate gave final legislative approval Thursday to a bipartisan bill to allow Hartford-based United Technologies Corp. to use earned, but unused, tax credits in exchange for $500 million in improvements over the next five years in Connecticut.
The bill passed by 34 to 2 with Democrats touting the deal as a major step forward for the state’s largest private employer. Two Republicans said the deal amounted to “corporate welfare” and a giveaway to a highly profitable, multinational corporation.
The bipartisan bill applies only to large manufacturing companies that have at least 15,000 employees in Connecticut and have $400 million in accumulated research-and-development tax credits. As such, lawmakers say the bill is specifically targeted at United Technologies, even though the company is never mentioned by name in the bill.
The deal calls for Pratt & Whitney to maintain its headquarters in the state for at least 15 years and for Stratford-based Sikorsky to remain for at least five years. In exchange, UTC would be able to use up to a maximum of $400 million in research-and-development tax credits that it has already accumulated.
State Sen. John Fonfara, the co-chairman of the tax-writing finance committee, said the Pratt improvements in East Hartford will be “housing the best and brightest in the world, mostly Ph.D.’s in engineering.”
Fonfara added that Sikorsky Aircraft will be doing “game-changing research on the next generation of helicopters.”
Lawmakers said that 2,500 suppliers, including many machine shops, will benefit as the parent company prospers. More than 700 of those suppliers have dealings of $100,000 or more, lawmakers said. With thousands of employees, UTC’s economic impact works its way all the way down to dry cleaners, grocery stores, and retailers, lawmakers said.
“For me, it is a bet on the future,” Fonfara told his colleagues on the Senate floor. “Not only a bet on the best and brighest engineers” but a bet that Connecticut will benefit, too.
“We want you here, UTC,” Fonfara said on the Senate floor. “We want your family of companies here in the state. Those 600 new engineers that you hire every year, we want them here in this state. … That’s a win-win for Connecticut. Right here in the small state of Connecticut.”
But Sen. Anthony Guglielmo, a Stafford Springs Republican with 22 years at the state Capitol, said the deal was an example of “corporate welfare” and a giveaway to a huge international corporation with major profits. He criticized the “First Five” program of Democratic Gov. Dannel P. Malloy for awarding tax breaks to companies in the hopes of keeping jobs in the state.
“I do have a problem with the concept of picking winners and losers,” Guglielmo said. “It’s better than Starwood [hotels]. It’s better than Jackson Labs. It’s better than ESPN. It’s better than NBC. … But when you cut to the chase, it’s still corporate welfare. … This is a healthy company. They’ve got $6 billion in profits. That’s billion with a B. … If they do not create a single job, they’ll get 90 percent of that $400 million. That’s incredible. It’s a terrific deal for UTC.”
He added, “You’re talking about $400 million. You’re talking about a company with $6 billion in profits. That’s 7 or 8 percent of one year’s profits to build its headquarters. … This is a drop in the bucket for UTC. They could easily do this. … It makes me a little queasy to giving them $400 million to a company that said, “Any place but Connecticut.”
Guglielmo said, “This is not a sustainable course. We can’t keep throwing money at this large company and that large company.” Continue reading