Connecticut Budget Crisis: State Employees Get Blamed, Corporations Get Paid

by David Samuels

This column appears in the June 8 – 15 edition of the Hartford News.

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Policy Watch

The Corporate State

“The bad news is that as (Connecticut’s) budget deficit grows, the response from Hartford has been to put more obligations on struggling cities rather than on the financial sector. Connecticut’s metropolises are already impoverished and dangerous, starved by decades of suburban separatism and victims of the state’s highly segregated school system. Hartford is teetering on the verge of bankruptcy. But the state’s public spending has lagged behind the national average.

Decades of corporate poaching made Connecticut rich but never resuscitated the places it needs to compete. Now, in a time of budget stress and ongoing population loss, Republicans are pushing for the state to recover its status as a New England tax haven. The truth is that it still is one. Its top marginal income tax rates are lower than those in New Jersey and New York. According to accounting firm Ernst & Young, Connecticut’s total effective business tax rate is the lowest in the country.” ~ Slate Magazine columnist Henry Grabar “Trouble in America’s Country Club”  http://www.slate.com/articles/business/metropolis/2017/06/something_is_wrong_with_connecticut.html

The state budget deficit is $5 billion over the next two fiscal years. While the public sector (largest employer of Black people and women) is used as a scapegoat by the two corporate controlled political parties and corporate owned media outlets, billions of dollars in corporate welfare, tax breaks and tax dodging go unreported. 

From Connecticut Voices for Children…

April 2017

The Cost of Business Tax Breaks in Connecticut

Derek Thomas, M.P.A.

In a new report, Connecticut Voices for Children estimates the costs of business tax breaks in fiscal year (FY) 2017 to be $707 million. The report highlights that, unlike strategic investments, such as education and health care, the full cost of business tax breaks is unknown, and their effectiveness is not analyzed according to nationally-recognized best practices.   http://www.ctvoices.org/TaxBreaks

CITY OF HARTFORD & STATE OF CONNECTICUT EMPLOYEES,

Call and email Gov. Dan Malloy and your legislators. Request data on how many jobs were created by each company that receives tax subsidies from the State of CT. Also ask what their position is on 14 CT businesses stashing a combined $180 billion in offshore profits, as reported by the Hartford Business Journal in 2016 (see below). Request a WRITTEN RESPONSE. The full list of CT corporations receiving tax subsidies from the state is available through the New York Times interactive database. We are sharing page 1 of the list. http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html

Gov. Malloy’s office: Phone Number: (860) 566-4840 Toll-Free: (800) 406-1527 TDD: (860) 524-7397

Email:  http://portal.ct.gov/en/Office-of-the-Governor/Contact-Governor-Malloy/Share-your-Opinion-with-the-Governor

Visit the CT General Assembly website to identify and contact your state representative and senator. Call and email them. BE POLITE.

https://www.cga.ct.gov/asp/menu/cgafindleg.asp

.

Connecticut

Connecticut spends at least $860 million per year on incentive programs, according to the most recent data available. That is roughly:

  • $241per capita
  • per dollar of state budget

 

  • GRANTS TO COMPANIES (293)
  • STATE PROGRAMS (37)

 

Amount Company No. of grants Types Town, city or county Years
$100 million Royal Bank of Scotland (RBS)Urban and Industrial Site Reinvestment Tax Credit 1 Corporate income tax credit, rebate or reduction Greenwich 2007
$71 million CIGNA Corporation 1 Corporate income tax credit, rebate or reduction Bloomfield 2011
$66 million UBS Financial ServicesManufacturing Assistance Act 2 Cash grant, loan or loan guarantee 2001-2011
$51 million Alexion Pharmaceuticals 1 Cash grant, loan or loan guarantee 2012
$43.9 million DisneyDigital Media and Film Tax Credit 4 Cash grant, loan or loan guarantee,
Corporate income tax credit, rebate or reduction
Bristol 2011
$40 million DiageoUrban and Industrial Site Reinvestment Tax Credit 1 Corporate income tax credit, rebate or reduction Norwalk 2004
$29.3 million Comcast CorporationUrban and Industrial Site Reinvestment Tax Credit,
Manufacturing Assistance Act,
Digital Media and Film Tax Credit
9 Cash grant, loan or loan guarantee,
Corporate income tax credit, rebate or reduction
Stamford 2009-2011
$29 million Blue Sky StudiosUrban and Industrial Site Reinvestment Tax Credit,
Manufacturing Assistance Act
3 Corporate income tax credit, rebate or reduction,
Cash grant, loan or loan guarantee
Greenwich 2008-2011
$28.5 million Berkshire Hathaway (General Re Corp.)Urban and Industrial Site Reinvestment Tax Credit,
Manufacturing Assistance Act
2 Corporate income tax credit, rebate or reduction,
Cash grant, loan or loan guarantee
Stamford 2010
$27.5 million DOLLAR TIME INC. 1 Corporate income tax credit, rebate or reduction 2012
$24 million High-Tech Lumber, Inc. 1 Corporate income tax credit, rebate or reduction New Haven 2010
$24 million CareCentrix 1 Cash grant, loan or loan guarantee 2012
$20 million Lowe ConstructionUrban and Industrial Site Reinvestment Tax Credit 1 Corporate income tax credit, rebate or reduction Plainfield 2005
$16.5 million World Wrestling EntertainmentDigital Media and Film Tax Credit 15 Corporate income tax credit, rebate or reduction 2010-2011
$15 million General Dynamics 1 New London 2010
$13.5 million Engineered Electric Company d/b/a DRS FermontUrban and Industrial Site Reinvestment Tax Credit,
Manufacturing Assistance Act
2 Corporate income tax credit, rebate or reduction,
Cash grant, loan or loan guarantee
Bridgeport 2010
$12.6 million Prudential FinancialUrban and Industrial Site Reinvestment Tax Credit,
Manufacturing Assistance Act
2 Corporate income tax credit, rebate or reduction,
Cash grant, loan or loan guarantee
Hartford 2009
$12.5 million Righteous Kill Productions, Inc.Digital Media and Film Tax Credit 1 Corporate income tax credit, rebate or reduction 2009
$11 million Old Dogs Productions, Inc.Digital Media and Film Tax Credit 1 Corporate income tax credit, rebate or reduction 2009
$9.9 million Electric Boat CorporationManufacturing Assistance Act 1 Cash grant, loan or loan guarantee Groton 2008

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Sources: State agencies, government reports, Investment Consulting Associates’ ICAincentives.comGood Jobs First’s Subsidy Tracker Database, company financial filings, Equilar.
State budget figures from Center on Budget and Policy Priorities and the National Association of State Budget Officers. Learn about the database methodology.

 

By LOUISE STORY, TIFF FEHR and DEREK WATKINS

CT’s largest corporations hold billions in offshore profits

GREG BORDONARO

Fourteen of Connecticut’s largest corporations had a combined $180 billion in offshore profits on their books in 2015, down nearly 5 percent from a year earlier, according to a new report from public policy research group Citizens for Tax Justice.

Fairfield-based General Electric, which is moving its corporate headquarters to Boston, had the most offshore profits in 2015, totaling $104 billion, followed by Farmington-based United Technologies, with $29 billion in offshore profits.

Nationwide, the United States’ 303 largest corporations held $2.4 trillion in offshore profits—$200 billion more than in 2014—that could be costing the U.S. as much as $695 billion in federal taxes, the report said.

The report said many of the biggest corporations appear to be increasing their offshore cash significantly. Seventy-nine of the companies surveyed in this report increased their declared offshore cash by at least $500 million each in the last year alone. And just 12 corporations each moved at least $5 billion offshore in 2015. These include companies in the tech sector, such as Alphabet (formerly known as Google), Apple, and Microsoft, as well as pharmaceutical companies (Gilead Sciences and Pfizer).

The report’s authors examined Fortune 500 companies’ 2015 financial filings and found that 303 corporations claim to hold at least some profits offshore. If corporations repatriated these profits to the United States, Citizens for Tax Justice estimates the companies could collectively owe as much as $695 billion in federal taxes.

Other Connecticut companies holding offshore profits are shown in the table below.

Unrepatriated Foreign Profits of Major CT Corporations
Unrepatriated Income ($millions)
Company 2015 2014 2013
General Electric $ 104,000 $ 119,000 $ 110,000
United Technologies $ 29,000 $ 28,000 $ 25,000
Praxair $ 11,000 $ 10,400 $ 9,300
Priceline.com $ 9,900 $ 7,300 $ 4,900
Xerox $ 9,000 $ 8,500 $ 8,000
Stanley Black & Decker $ 4,391 $ 4,773 $ 4,439
Amphenol $ 3,699 $ 3,300 $ 2,600
Starwood Hotels & Resorts $ 3,600 $ 3,500 $ 3,300
Cigna $ 2,200 $ 1,800 $ 1,100
Harman International Industries $ 895 $ 717 $ 629
Pitney Bowes $ 860 $ 830 $ 700
Terex $ 855 $ 800 $ 825
United Rentals Inc. $ 651 $ 595 $ 465
W.R. Berkley $ 79 $ 58 $ 103
Totals $ 180,130 $ 189,573 $ 171,361
Source: Citizens for Tax Justice

Resources   

It’s the Corporate State, Stupid

http://www.informationclearinghouse.info/article7260.htm

Follow CP on Twitter for state, national and world news headlines. https://twitter.com/CommunityParty1 Check out my Facebook page for daily news commentary. https://www.facebook.com/david.samuels.948 Listen to So-Metro Radio the first, third and fifth Tuesday of each month at 8:00 PM for commentary on urban issues http://www.sometroradio.com/  Check out our No Sellout blog (https://hendu39.wordpress.com/). Contact us at samuelssloflo@aol.com.

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