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Business News

Gov. Malloy Urged to Sign Bill Strengthening Oversight of Tax Incentives

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The headquarters of Bridgewater Associates in Westport. A $22m state incentive package for the hedge fund recently reignited a passionate debate about tax incentives

Corporate tax incentives are becoming ever more controversial in Connecticut. Government watchdogs said Governor Dannel Malloy can take some heat out of the debate by signing a bill that would give greater legislative oversight.

Tax incentives, most states' economic development tool of choice, aren’t going anywhere anytime soon. Governors everywhere use grants, loans, and tax credits to lure companies to relocate, or to incentivize them to hire.

But using taxpayer dollars in this way at a time of unprecedented budget strain continues to raise questions.

“If states are going to use them, they need to work well,” said Josh Goodman of the Pew Trusts.

Under a 2010 law, the state of Connecticut is already required to monitor its tax incentive programs every three years to ensure the taxpayer is getting the best bang for the buck. The Department of Economic and Community Development last produced a comprehensive report two years ago.

"The 2014 study included lots of detailed information, lots of interesting insight, and yet it really didn’t make an impact," said Goodman. "Policymakers haven’t paid much attention to it."

That’s why Pew Trusts and other advocates are now urging Malloy to sign an updated piece of legislation that would strengthen Connecticut’s commitment to monitoring its tax incentives. It would shift analysis of the data away from the DECD, and it would require lawmakers to hold hearings on the evaluations that are produced.

“I think with this new process there will be more of a nudge to policymakers to say, we have good information on these programs — let’s use it,” said Goodman.

The bill, which passed both the House and Senate unanimously, arrived on the governor's desk for signature some 12 days ago.

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