SAYS "NEW ECONOMIC REALITY" WARRANTS VOTE AGAINST $22 MILLION IN STATE MONEY FOR HEDGE FUND
URGES SHIFT IN ECONOMIC STRATEGY TO BENEFIT ALL CT BUSINESSES
Comptroller Kevin Lembo, at today’s state Bond Commission meeting, voted
against providing $22 million in state bond funding to Bridgewater Associates, a
Connecticut hedge fund that manages more than $130 billion in global
Lembo said that, while he has been accepting of prior bond packages that
provide state assistance to private industry, this case stands out as the state
now faces a new economic reality - and Connecticut must reevaluate its approach
to economic development.
“It is undisputable that Connecticut faces a new economic reality - one that
warrants reevaluation of our economic development strategy, especially as the
state faces ongoing cuts to services and the layoff of thousands of employees, ” Lembo said. “Despite my general reluctance about the state picking winners and
losers, I have been willing to cautiously support economic assistance to private
companies - but the size, scope and nature of this particular proposal stands
out and meets a new threshold that compels me to vote against it.
“While state funding of private enterprises may sometimes be necessary - in
certain cases and after careful evaluation - I believe we have an obligation as
a state to focus our economic strategy and resources on investments that benefit
all Connecticut businesses.
“As I always try to do, I reached this position only after reviewing data and
non-partisan research - evidence clearly demonstrating that such narrowly
focused economic incentives not only have little to no benefit to states and
other localities, but may even actually be detrimental to overall broader
Lembo highlighted reports, including one by the non-partisan Institute on
Taxation and Economic Policy that found tax incentives are “costly for states”
and “a drag on national economic growth.”
“In recent years, I have advocated - at a minimum - that our state improve
transparency and evaluation surrounding the millions in tax incentives provided
to select businesses to ensure that they are fulfilling their intended goal of
creating new jobs through independent and thorough analysis,” Lembo said.
“Our economic development strategies should be smarter, broader and more
efficient - designed to create a landscape where all businesses can enjoy the
benefits of sound infrastructure and stable state finances. While I may continue
to support such targeted incentives - again, only after close scrutiny and
consideration - it is time to reign in such bonding costs, especially as state
debt service costs increase each year.
“It is important to note that companies such as Bridgewater Associates are
essential to Connecticut’s economy - but, rather than narrowly target state
resources to such businesses, the state should focus on collaborating with these
companies to identify sound tax policies and investments that benefit them and
all state businesses, large and small.”