State Senator Gary LeBeau
August 27, 2009
LeBeau Leery of Governor’s Cuts to Business and Jobs Programs
New economic analysis calls for “balanced approach” to budget and focused economic strategy to avoid social repercussions
As state budget negotiations approach a critical phase, and coming on the heels of a new report by the Connecticut Center of Economic Analysis which warns about steep state budget cuts affecting job and business growth in the Connecticut, state Sen. Gary D. LeBeau (D-East Hartford) is urging Gov. M. Jodi Rell to reconsider some of her proposed cuts to various state job and business programs.
Sen. LeBeau’s comments come as the governor and legislative leaders are expected, over the next several days, to agree on the details of a biennial state budget that confronts an anticipated $8.56 billion budget deficit over the next two years.
“We have a real opportunity to craft a business-friendly and pro-jobs budget over the next 96 hours, but we need Governor Rell to maintain some important state programs,” said Sen. LeBeau, who is Senate Chairman of the Commerce Committee. “I’ve heard the governor talk repeatedly about the need to position Connecticut to emerge from the national recession, but when I look at her budget proposal for the next two years, I see little in the way of achieving that. In fact — aside from her dropping her proposed cap on Connecticut’s film tax credit — I think she’s moving us in the opposite direction. We need to do better in our final budget.”
The Connecticut Center of Economic Analysis, located at the University of Connecticut, states in part in its August 2009 “Connecticut Economic Outlook” report that:
“ . . . the severity of the current employment environment argues strongly for public policy that generates strong recovery from the recession in order to avoid severe social repercussions . . . If Connecticut reverses its steep cuts in capital projects, adopts a balanced approach to address its massive budget deficits, and — critically — develops and implements a coherent, focused economic development strategy, it would assuredly avoid significant social costs, accelerate its own recovery, and build the foundation for a healthy economic future.”
“I agree with CCEA’s analysis. Unfortunately, the governor’s proposals for the next two years don’t jibe with those recommendations,” Sen. LeBeau said.
For instance, in her latest budget proposal, Gov. Rell recommends:
- Cutting funding for the Jobs First program by $26.3 million — an enormous 75 percent reduction — over the next two years. Jobs First is Connecticut’s welfare reform program in which recipients who get a job are allowed to keep all earnings up to the federal poverty level as well as their cash assistance for 21 months. To provide for future emergencies, recipients are allowed to have up to $3,000 in a bank account. In 2005, the libertarian Cato Institute called Connecticut’s Jobs First program “a model for encouraging self-sufficiency through work,” and Gov. Rell herself noted at the time that Jobs First had helped move 35,000 state residents off of state welfare rolls over the previous 10 years — a 60 percent drop. “At a time when Connecticut’s unemployment rate is hovering around 8 percent, these levels of drastic cuts are unwise,” Sen. LeBeau said.
- Slashing $1.5 million from the Small Business Incubator Program, which was established by the legislature in 2007 in order to provide grants to small businesses with incubator facilities for operating funds, business plan preparation, acquiring financing, and management counseling. According to a February 2009 report by the Connecticut Center for Advanced Technology, in its first seven months, 19 Connecticut companies received small business incubator program grants which resulted in a 24 percent increase in full-time employment and a 21 percent increase in part-time employment. 17 new patents were filed, two new patents awarded, and one incubator business was awarded a $9.4 million contract by Northrop Grumman. “Obviously this is a pro-jobs, pro-business program that is working and should continue, not be cut,” Sen. LeBeau said.
- Eliminating $1 million from the Manufacturing Supply Chain Initiative, which helps Connecticut-based small and medium-sized companies compete in the global industrial supply chain by boosting productivity (especially through ‘lean manufacturing’ practices), expanding new business opportunities, and improving both the quality and number of workers who are trained in advanced manufacturing techniques. Originally envisioned to benefit defense manufacturers, it was expanded to include the medical and automotive industries.
- Ending a combined $6.5 million in state funding for the Southeast Connecticut Incubator Program (created during the threatened closure of the Groton sub base in order to strengthen the regional economy); Opportunity Industrial Centers (provides job skills to people with significant barriers to employment; 767 participated in 2008); and the complete elimination of the Connecticut Youth Employment Program, which served 3,846 participants in 2008.
“These are just a few of the many, valuable pro-business and pro-jobs state programs that the legislature has worked hard to create and maintain,” Sen. LeBeau said. “In the face of our unprecedented economic downturn and unquestioned public need, I urge Governor Rell to reconsider her proposed cuts to these programs and work instead over the next several days on building up — rather than breaking down — Connecticut’s economic security and its economic future.”
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