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    Wednesday, April 24, 2024

    The Sikorsky corporate welfare deal

    As his budget office was berating the state Freedom of Information Commission over trivia — wanting to maintain its subscription to a law review — Governor Dannel P. Malloy went to Stratford to announce his plan to give Sikorsky Aircraft Corp. $220 million just for staying in Connecticut for 16 more years, about $14 million per year.

    The plan isn’t really for increasing the company’s employment in the state but merely maintaining the current level. While the governor touted Sikorsky’s promise to increase its subcontracting in Connecticut, state government’s ability to verify this is doubtful, since the company will control the past and future data submitted even if anyone in state government could interpret it. (The other day the state auditors were able to interpret spending data from the University of Connecticut and reported that the university had misspent more than $50 million, but this passed without comment by the governor and even by the General Assembly, to which the auditors report.)

    As usual, the argument for the huge subsidy to Sikorsky is that other states are bidding for big employers and Connecticut has to compete. Sikorsky’s president, Dan Schultz, whom the governor called his “new best friend,” said “Connecticut was not the cheapest state” where the company was considering locating but the subsidy plan “puts us in a competitive mindset.”

    Of course the governor and most state legislators are presenting the Sikorsky deal as a triumph for the state. While it is surely a triumph for the company, it actually signifies how low Connecticut has sunk — how it has to bribe even businesses of historic standing in the state to keep them here.

    Yes, Connecticut has to compete. The big policy question, bigger even than the bribe to Sikorsky, is why the state fails every day to compete for all sorts of productive businesses and residents but instead competes for all sorts of unproductive residents, dependents on government. There long has been a steady exodus of the former. The huge tax increases imposed in the last few years at the governor’s behest did not mean to make Connecticut more competitive for the productive class but rather less so.

    The governor says the subsidy package for Sikorsky requires the General Assembly’s approval, and so a special session is to be held next week. It is to be a mere formality, a single day, to ratify whatever the governor submits. There will be no public hearings, no investigation of the criteria for the subsidies and the method of their calculation, if indeed there were any criteria beyond what Sikorsky thought it could extort from this state and other states, and no discussion of the general policy of bribing a few large corporations to stick around so the government might distract from the continuing disaster of the many smaller departures from Connecticut, though economists note that most new jobs are created by small businesses.

    Unnoticed by anyone in authority is that with Sikorsky, as with state government’s recent massive subsidies to the Pratt & Whitney division of United Technologies Corp., federal government military contracts are the essential leverage being used for corporate extortion and welfare. That is, the federal government is letting itself be used to impoverish the states for the benefit of military contractors.

    Congress could prohibit this by legislation. The Defense Department might prohibit it by contract. If they had the wit and status in Washington, Connecticut’s members of Congress might prohibit it by bringing their political influence to bear. But the corruption of this business overwhelms everything.

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