Published April 27. 2013 12:00PM Updated April 27. 2013 12:20PM
HARTFORD, Conn. (AP) — Connecticut's comptroller is demanding more information be made public about hundreds of millions of dollars in state tax assistance to businesses, sparking debate among lawmakers about how much taxpayers are entitled to know about how their money is being spent.
Comptroller Kevin Lembo is pushing legislation that would give the public access to information including how much state money went toward tax credits and other state aid, the number of jobs created and the purpose of the economic help.
"We don't always look at what kind of return on investment we get on economic development," he said. "Transparency around this issue is important."
Business lobbyists insisted on legislation that would require less detailed information from companies.
The Finance, Revenue and Bonding Committee voted 44-5 on April 12 to approve compromise legislation that addressed some concerns from business lobbyists that companies would be forced to disclose too many details, such as tax data that would help rivals. The bill, which is now awaiting action in the House of Representatives, would allow information to be gathered according to industry rather than specific companies.
Bonnie Stewart, a lobbyist for the Connecticut Business and Industry Association, the state's largest business group, said the legislation is improved but could do more to protect businesses from being forced to provide proprietary information. Broader industry groupings would help, she said.
Republican Rep. Vin Candelora, who voted against the legislation, said businesses might refuse to seek economic assistance from the state if forced to disclose proprietary information in the name of transparency. The result would be reduced economic activity.
"I think maybe the bigger question is whether government should be involved in these programs at all," he said.
The legislation has sparked at least the second battle in this year's legislative session over state economic development aid. Unions and their allies are pushing for separate legislation that would require businesses receiving $500,000 or more in economic development aid to pay wages and benefits higher than the minimum for janitors, guards and other service workers.
Candelora said differences over state aid to business are tied to Connecticut's weak economic recovery, persistently high unemployment and tight state revenue.
"There are more arguments over how to prioritize," he said. "We're seeing a greater fight over the philosophy of how to spend money."
Connecticut is one of many states that offer financial help to companies to spur job creation or other business activity. Employers can take credits on taxes for hiring, buying machinery and equipment, creating jobs, spending money on research and development, and doing business at a specified urban industrial site.
Gov. Dannel P. Malloy has promoted economic development programs to attract large companies such as Cigna, NBC Sports and ESPN that the state says spurred $561.3 million in investment in the budget year that ended last June 30. State tax credits totaled $75 million, and state investments, including loans and grants, were nearly $110 million.
A small-business program also assisted nearly 150 businesses with $20.7 million in loans and matching grants in 2012, the state says.
Catherine Smith, economic development commissioner, said lawmakers must avoid jeopardizing Connecticut's ability to lure more businesses by forcing companies to disclose private information. Employers would refuse, halting job creation efforts in Connecticut, she said.
"We are finally getting Connecticut back on the map in getting companies interested in the state," she said. "We have a shot at getting companies out of Manhattan. I don't think we've had that shot in the past."
Lembo, who had earlier said aggregate information was insufficient to determine if public money was getting the "most bang for the buck," welcomed the compromise legislation.
"The current bill still moves us in the right direction," he said. If the intent of the legislation is to give lawmakers better information, "this will give them a ton of information."