Do the math
Earlier this month, health insurance carrier Cigna Corp. announced it would lay off 1,300 employees, including 200 in Connecticut, as part of a “restructuring” plan that would ultimately save the company millions of dollars a year in annual operating expenses.
As the inaugural member of the state’s First Five program, Cigna was promised a $15 million forgivable loan, up to $50 million in state tax credits and up to $6 million in state grants for training programs in exchange for creating at least 200 jobs in Connecticut, with penalties if the company failed to meet that minimum goal.
When asked whether the news of layoffs represented a setback to the First Five program, which is overseen by the state Department of Economic and Community Development (DECD), Commissioner Catherine Smith told the Business Journal, “I do not believe it’s a setback for the program at all,” and went on to defend Cigna CEO David Cordani for doing what he needed to do “just to keep the company moving forward competitively.” She said Cigna was still on track to meet its goal of creating at least 200 new jobs by mid-2013.
When taxpayers are footing the bill to the tune of thousands, tens of thousands or even hundreds of thousands of dollars per job created, 200 layoffs — at a time when the state’s unemployment rate is hovering around 9 percent, no less — represents more than a setback. For those who will lose their jobs and for the taxpayers, it is devastating.
By all accounts, the First Five program (and the Next Five program it has spawned) has successfully drawn or retained some of the country’s most prominent companies to Connecticut. But there comes a time to ask whether the big names justify the big dollars being shelled out by the Malloy administration.
In Bridgeport, The Workplace, a provider of development services for employers and job seekers in southwestern Connecticut, funded the first round of its Platform to Employment program with $600,000 in private grants. Initially, 100 long-term unemployed were accepted into the program, and to date 64 have found full-time positions.
In Rocky Hill, Connecticut Innovations (CI), a quasi-public investment corporation created by the state legislature in 1989, funds companies ranging from startups to developed entities without risking a single taxpayer dollar. Since 1995, CI has used returns from its own investments to support 100 percent of its operations and any new programs or investments it chooses to pursue.
Compare those two examples with that of Bridgewater Associates, which is eligible to receive up to $115 million in tax credits and state incentives for building a new, $750 million headquarters in Stamford and creating between 750 and 1,000 jobs.
Do the math.