Hurrah! Malloy follows Lembo's lead
In a welcomed shift, Gov. Dannel P. Malloy signed an executive order Tuesday requiring the creation of a searchable website that should make it far easier to find out which businesses receive economic aid from the state and how much. Less clear is how helpful the information will be in ascertaining the success of these grants and loans in creating jobs and how well the state investment paid off.
Final judgment on the utilitarian value of the website will have to await its arrival. Gov. Malloy's order sets a deadline for the state Department of Economic and Community Development (DECD) to get it in operation my March 31, 2014.
Gov. Malloy's decision to make it easier for "taxpayers … to know what their state government is doing to promote economic development and job creation" certainly involved some political calculus.
In the last legislative session the administration showed no enthusiasm for legislation, pushed by Comptroller Kevin J. Lembo, to create such a website. DECD Commissioner Catherine Smith was borderline hostile to the idea, contending in her testimony that a "requirement to disclose the economic benefits derived from each project would create a competitive disadvantage for the state in its negotiations with existing companies within Connecticut and with any new companies that may consider locating here."
Essentially, Commissioner Smith's contention was that businesses would be reluctant to take taxpayer money to expand or locate in Connecticut if they had to disclose to those taxpayers the return on their investment. First, that doesn't make much sense. Secondly, if a business is not willing to disclose the "economic benefits derived" from the state largesse, let them find the money elsewhere.
Mr. Lembo's bill won House approval but, without backing from the Malloy administration, it died in the Senate. Gov. Malloy perhaps recognized that such a bill would likely win approval in the 2104 session. Rather than have to live with a plan adopted by the General Assembly, his administration can exert greater control by carrying it out as an executive function.
As he prepares for a likely run for re-election in 2014, Gov. Malloy also recognizes that he must defend his economic agenda. He is betting that this increased access to information will make the case that his approach to driving economic development - through direct state investment to prime the pump for businesses - is starting to work.
Whatever the motivation, the public will benefit by the decision to make such information more readily available. Any Republican challenger for governor in 2014 will likely argue a better approach to boosting the economy is cutting government and reducing taxation. The more evidence available, the better voters can judge these differing philosophies.
James Smith, president of the open-government advocacy group Connecticut Council on Freedom of Information, applauded the move as "a step in the right direction for more transparency in government." The group said it would prefer legislation mandating such a program - as would we - but the governor's order has likely headed that off.
In any event, the administration displayed a unified front in announcing creation of the website - with the governor, Ms. Smith and Mr. Lembo all in attendance at a press conference held at a Bloomfield business that has received state aid. Asked about her seeming about-face, the DECD commissioner bobbed and weaved a bit, talking of having fine-tuned the concept.
DECD unveiled an online map showing a Connecticut filled with dots indicating businesses aided by the state, but without information on how much they received. Readers can view it at www.CTOpenForBiz.com.
It's a lot of companies and money. According to the DECD, 1,114 companies have received or are receiving assistance, obtaining $475 million in grants and low-cost loans, a figure that does not include tax credits. In applying for aid, these businesses collectively claimed they could retain nearly 12,000 jobs and create about 31,000 new ones.
When operating, the information website needs to show whether actual job generation met those expectations. Ultimately, lawmakers and the public must determine if the results in terms of job and tax-revenue generation justified the state investments. The governor's announcement is a good move towards obtaining those answers.
The editorial board is composed of the publisher and four journalists of varied editing and reporting backgrounds. The board's discussions and information gained from its meetings with political, civic, and business leaders drive the institutional voice of The Day, as expressed in its editorials. The editorial department operates separately from the newsroom.
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