State Holding Its Own On Corporate Welfare, ‘Megadeals’ Report Shows

by Categorized: Jobs Date:

When it comes to the biggest corporate welfare deals, Connecticut is holding its own among states — for better or worse — with six incentive packages worth $75 million or more over the last two decades.

Pound for pound, under Democrats as well as Republicans and a third party, Connecticut is right up there with Michigan (29 deals) and New York (23 deals, a record $11 billion). The state-by-state listing is part of a report (PDF) from the advocacy group Good Jobs First, titled “Megadeals.”

Distribution of Megadeals by State from the Good Job 'Megadeals' report.

Distribution of Megadeals by State from the Good Job ‘Megadeals’ report.

The Washington, D.C.-based group argues that the deals are rarely if ever worth their cost, and that the average total cost per job in these giant packages is $456,000. That’s a huge number considering that typical, smaller corporate incentives run in the range of $40,000 per job.

Connecticut’s biggest deals were $150 million in 1994 to Swiss Bank, now UBS, in Stamford, under former Gov. Lowell P. Weicker Jr.; and $115 million last year for Bridgewater Associates, the giant hedge fund, to move its headquarters. The Swiss Bank deal is generally viewed favorably, as it sparked a new wave of financial services gains in Stamford, leading to such other deals as $100 million for Royal Bank of Scotland, in 2005, under former Gov. M. Jodi Rell. It’s been costly but worth the huge investment.

The Bridgewater deal, under Gov. Dannel P. Malloy, is a head-scratcher, since the head of Bridgewater alone made somewhere in the neighborhood of $4 billion in the prior year. That’s personal income, folks.

But could Malloy risk Bridgewater moving to another state? Nope. That’s the problem with these megadeals, and with corporate welfare in general. These companies have taxpayers over a barrel. We never know whether the moves they don’t make, and the jobs they add, would have happened if we didn’t offer greenmail.

And so we pay up. The Good Jobs First Report is the best scorecard I’ve seen, from the group that has been bird-dogging this issue from the start.

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3 thoughts on “State Holding Its Own On Corporate Welfare, ‘Megadeals’ Report Shows

  1. BigPoppa

    I have not read the full report but everything I have read in the past shows that paying companies to relocate is a losers game with nothing but bragging rights for the politicians and debt for the residents.

  2. JM

    I’m not necessarily sure that the Swiss Bank deal led to SW CT becoming a financial center. There’s a number of factors – the cost of rent is cheaper in CT than NYC. The suburbs of SW CT are where a lot of the wealthy live and have always lived, so being able to work close to home and live close to NYC is also a factor. Then add in 9/11, where a lot of companies added satellite offices outside of NYC.
    Another good question – where exactly would have Bridgewater moved had they not gotten corporate welfare? I’m sure most of their executives live in the posh suburbs of SW CT. Would they, and their wives, necessarily want to uproot and go live in say, New Jersey?
    It is a losers game – it’s no different than when all the sports teams were holding cities hostage to get new stadiums built. Hartford lost the Whalers, and in all honesty, it hasn’t gotten better or worse since they left.

  3. pete

    UBS got its first bribe from that idiot Weicker – remember him – temporary inc tax which led to MASSIVE SPENDING. It then got $20 million more from DANNY BOY while it moved all of its high paid traders to NYC and only the lower paid back office people work on the largest trading floor in Stamford. Bridgewater was going NOWHERE. DANNY BOY is using taxpayer money to move companies to the rat hole stamford to keep its taxes down

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