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Bloomberg: CT Losing Hedge Fund Types to Florida, Despite CT ‘Wooing’ With Taxpayer Funds

June 5, 2018 By Staff
Bloomberg: CT Losing Hedge Fund Types to Florida, Despite CT ‘Wooing’ With Taxpayer Funds

A recent Bloomberg report sheds light on Connecticut's hemorrhaging of finance industry jobs to Florida, even as the state attempts to keep hedge funds with taxpayer-backed funds.

“Fund Managers Are Ditching Wall Street for Florida,” the Bloomberg headline from Monday reads. It may as well say hedge fund managers are ditching Connecticut, though.

Bloomberg‘s story, by Lynnley Browning and Gillian Tan, explains that Connecticut is hemorrhaging hedge fund managers to Florida, mostly because of the high taxes in the state.

The former Morgan Stanley dealmakers, whose infrastructure firm will manage more than $12 billion in assets after its second fund closes later this year, stand to benefit tax-wise [from a move to Florida] — as would any other executives from the financial industry who make the move from New York or Connecticut. That’s because Florida doesn’t have a state income tax and its property taxes are relatively low, whereas the tri-state area has among the highest property taxes in the country.

Connecticut’s master plan to keep hedge fund managers, according to Bloomberg?

For its part, Connecticut is trying to block any relocations. Smith, of the Department of Economic and Community Development, said her office is wooing funds to make sure they stay put, and stepping up its efforts through emails, phone calls and drop-in visits. In recent years, the state has offered financial incentives to get firms such as Bridgewater Associates LP to stay.

Connecticut taxpayers are familiar with this plan. Unfortunately, the Department of Economic and Community Development (DECD), under the purview of Gov. Dan Malloy (D-Conn.), has been overstating the jobs created by state-sponsored programs and understating the amount of tax money spent. That’s according to a recent state auditors’ report covered extensively by Reclaim Connecticut.

“The auditors’ report is disturbing yet indicative of Governor Malloy’s continued misrepresentation of Connecticut’s economy,” Senate Republican President Pro Tempore Len Fasano (R-North Haven) Len Fasano said at the time. “For all the money Governor Malloy gives out to large companies, his administration’s systems to monitor the effectiveness of these dollars are alarmingly deficient. The errors uncovered are beyond unacceptable.”

That didn’t stop the State Bond Commission, led by Malloy, from authorizing another $81 million in taxpayer-backed general obligation (GO) bonds for DECD last week.