Gov. Dannel P. Malloy says he will propose at least a $500 million economic development incentive package in his two-year budget plan to be unveiled Wednesday, as the first term Democrat looks to double down on some of the major programs he put in place to jumpstart the state's ailing economy.
In an interview with the Hartford Business Journal, Malloy said the plan will call for $100 million in new funding over two years for the state's Small Business Express program; $200 million in new funding over two years for the Manufacturing Assistance Act; and $200 million over a 10-year period for a new Bioscience Investment fund.
The spending plan comes at a time when Malloy and the General Assembly will have to tackle billion-dollar budget deficits projected for the next two fiscal years. But Malloy said now is not the time to balance deficits on the backs of businesses.
The governor is also pledging no new tax increases and said he sees these economic development programs as a key way to grow the state's sagging economy over the long-term.
And by asking for new funding he is giving his own economic development policies a vote of confidence.
"We need to continue to fund the programs that we rolled over the last two years, which is something for big companies, small companies and startups," Malloy said. "This is a major way to grow Connecticut's economy over time, along with some other investments particularly around our colleges and universities."
Malloy says his economic development package is a balanced approach that aims to help small and large businesses.
It also coincides with his plan to invest $1.5 billion in University of Connecticut science, technology, engineering, math and other higher education initiatives to ensure colleges and universities churn out the workforce needed by in-state businesses.
The states' Manufacturing Assistance Act provides loans and grants for projects that have strong economic development potential. It is what Malloy and his team have used to fund the "First 15" initiative, originally called the "First Five" program, which is providing tax credits and grants to companies that add at least 200 jobs through major expansion.
So far, nine companies have received about $185 million in funding under "First 15," which Malloy said has been successful because it has leveraged nearly $1.3 billion in private investment.
Malloy said he wants an additional $200 million over the next two years to replenish the Manufacturing Assistance fund and have some extra cash available to invest in mid-size companies looking for smaller scale growth and development.
Money for Malloy's Small Business Express program is scheduled to run out this summer, so the governor wants to allocate another $100 million for that program over the next two years. The program was created in late 2011 and was part of the jobs bill passed by lawmakers during the special legislative session that October. It provides loans, forgivable loans or matching grants to Connecticut-based small businesses with fewer than 100 employees that pledge to add jobs in the state and/or invest capital in infrastructure expansions.
So far, just over 1,600 applications have been received by the Department of Economic and Community Development (DECD) and 500 businesses have received nearly $70 million in grants and loans.
There are 271 applications in final review.
Malloy and previous Connecticut governors have been criticized for ignoring the needs of small businesses in favor of providing economic development incentives to larger corporations instead. The Small Business Express program is Malloy's way of reaching out to smaller businesses.
The program also complements the Innovation Ecosystem program, Malloy said, which is providing $5 million to better connect entrepreneurs and startups with venture funding and other resources.
Finally, the previously announced Bioscience Innovation Act calls for a $200 million investment over 10 years in bioscience companies. The money will be earmarked to create competitive investment tools, attract additional federal and private dollars, and re-energize Connecticut's bioscience industry, Malloy said.