Electric Boat Announces CT Expansion, With Malloy’s Taxpayer-Backed Exemptions and Grants in HandMay 2, 2018
Electric Boat (EB), a staple of Connecticut's defense industry, is expanding its presence in Connecticut. The deal didn't come without taxpayer-backed loans, exemptions, and grants, though.
Gov. Dan Malloy (D-Conn.) took to the podium on Tuesday to again announce that a company is expanding its presence in Connecticut, with the help of taxpayer-backed loans, exemptions, and grants.
From Malloy’s press release:
Governor Dannel P. Malloy today announced an historic partnership with General Dynamics Electric Boat (EB) that will help the company grow their workforce by nearly 1,900 bringing it to more than 13,000 by 2034, allow for capital investments of greater than $800 million in the state over the next 17 years, and more than double their spending on in-state suppliers, which are located in 102 Connecticut cities and towns. Connecticut’s investment will allow EB to maintain its position as the highest-quality provider of submarines to the U.S. Navy, thus capturing additional overhaul and repair work while continuing the delivery of the Virginia Class Submarines.
There’s no doubt that 1,900 jobs and $800 million in investments in Connecticut, even if over 17 years, is good for the state’s economy.
As Reclaim Connecticut did with Mayborn Group, Sema4, and Infosys, though, it’s worth pointing out how much taxpayers will fork over to Electric Boat, a multibillion-dollar (per year) company, to expand in the state.
Again, from Malloy’s press release:
The Connecticut Department of Economic and Community Development (DECD) will provide incentives over the course of the agreement, including a $35 million loan for machinery and equipment through Governor Malloy’s First Five Plus Program with loan forgiveness based on supply chain spend and employment, and up to $20 million from Connecticut Innovations in sales and use tax exemptions for capital and new construction on the Electric Boat campus. As part of the agreement, DECD will also provide EB an $8 million grant, which may only be spent on third-party workforce development initiatives through community colleges, technical high schools, and organizations in Connecticut, such as the Eastern Workforce Investment Board to benefit the company and its manufacturing supply chain.
In addition, the state will provide $20 million for dredging, allowing submarines to be launched from a new dry dock and manufacturing superstructure being built to support new submarine construction.
For those keeping count, that’s $48 million in benefits to Electric Boat that the state won’t get back, and $35 million in taxpayer-backed loans (some of which may be forgiven).
Almost everyone agrees new jobs and new investments in the state are a good thing, but some Republicans have called out Malloy’s continued reliance on taxpayer dollars – rather than pro-business policies – to convince companies to keep and create jobs in the state.
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