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Report: State Agency Has Been Overstating Job Numbers, Understating Taxpayer Money Spent

April 25, 2018 By Staff
Report: State Agency Has Been Overstating Job Numbers, Understating Taxpayer Money Spent

The auditors' report on the Department of Economic and Community Development (DECD) has prompted GOP calls for "greater transparency."

A special state auditors’ report released on Tuesday finds that the state’s 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.

The report, from Democratic auditor John C. Geragosian and Republican auditor Robert J. Kane, finds DECD has been understating the amount of tax dollars spent, or overstating net state revenue, on projects, in some cases by tens of millions of dollars.

DECD understated the Urban and Industrial Site Reinvestment total tax credits awarded by $71,000,000 (12% of total) and overstated total credits earned by $14,900,000 (5%).

…DECD understated the amount reported by $73,794,800 (9%) in its portfolio, because it did not include 14 projects. We also noted that the portfolio of MAA [Manufacturing Assistance Act] assistance does not include 297 inactive projects that received $242,401,364 of financial assistance.

…DECD overstated the cumulative net state revenue for the Manufacturing Assistance Act by $259,676,000 (27%).

The report also finds DECD overstated jobs numbers of several occasions.

DECD likely overstated the number of jobs retained because certain companies received funding multiple times or under multiple programs. Companies that received funding multiple times may have had a requirement to retain the same jobs each time they received funding. DECD counted these jobs multiple times.

Senate Republican President Pro Tempore Len Fasano (R-North Haven) blasted the Malloy administration following the report’s release.

“The auditors’ report is disturbing yet indicative of Governor Malloy’s continued misrepresentation of Connecticut’s economy,” Fasano said. “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.”

Fasano also criticized the governor’s ‘First Five’ initiative, by pointing out the taxpayer-funded program that provides hand-outs to companies creating or retaining jobs in the state has become more like a “‘First 50+’ program.”

Fasano and Republicans are calling for “greater transparency and reporting by DECD.” The auditors’ report makes it seem like DECD needs it.