Markeshia Ricks Photo
Malloy: We have a toolset that works.
Gov. Dannel P. Malloy made a controversial gamble when he first took office: offer millions in incentives to keep companies from leaving the state and encourage them to expand here instead.
Malloy, along with Department of Economic and Community Development Commissioner Catherine Smith, stopped by Alexion Pharmaceutical’s new 100 College St. headquarters Tuesday to deliver a report concluding the the First Five program, and its successor, the “First Five Plus,” have made strides for the state in its first five years. He argued that the program not only kept companies like Alexion in the state, but also helped them make bigger investments that have expanded job opportunities.
Alexion is one of 13 companies participating in the First Five program, which provides large companies financial assistance using a mix of loans, tax credits and grants. In return the companies must create at least two hundred jobs within two years, or invest $25 million dollars and create at least two hundred jobs in five years.
“When I came into office, we had almost no new tools and very few tools at all in the kit to support companies,” Malloy said from Alexion’s steps Tuesday. “Now, we have innovative programs that make a real difference.”
Malloy said the state has attracted new businesses and helped create jobs, including more than 3,000 new private sector jobs being added in July and more than 20,200 since last June. He said if the current 13 participating companies meet just the minimum requirements of the First Five program, they will add approximately $226.4 million in state income tax revenue in the next decade. The cost to the state over that decade would be about $62.9 million. If they reach maximum job creation goals, which would add more than 5,000 new jobs to the state, the companies would add an estimated $284.6 million to state coffers.
“That is clear proof that the value of the investments exceed the state’s cost even if the companies only add the minimum jobs required,” he said.
Smith: Numbers “astonishingly good.”
The governor and commissioner chose to hold the event at Alexion for a reason: The company has more than exceeded the minimum goals for hiring.
Smith said that when the pharmaceutical company, which was started in New Haven’s Science Park, decided to move its headquarters from Cheshire back to New Haven, the company had 386 employees in the state. When it entered into the First Five program it estimated that it would create about 300 new jobs. To date it has added more than 500 employees in the state and now has 878 employees in all.
“The number are pretty astonishingly good,” Smith said of the performance of First Five companies overall.
Senate President Pro Tem Martin Looney said the governor and the legislature have focused on creating high-end jobs for highly skilled professionals with the program.
Looney: First Five and First Five Plus a win for urban communities.
He said one of the challenges to the state’s revenue structure is that many of the new jobs that have been created elsewhere in Connecticut are lower-paying and therefore don’t generate state income taxes.
“These jobs do,” he said at Alexion.
Looney also said that programs like First Five have created a renewed investment in the state’s urban communities like New Haven, which have traditionally been home to manufacturing.