Connecticut Governor Announces Plans to Reorganize ED Efforts

Connecticut Gov. M. Jodi Rell is using the midterm budget request as the vehicle to substantially overhaul how the state supports the entire economic development process. Connecticut Innovations, one of the nation's oldest state-created equity finance programs for tech businesses, would be consolidated with departments that cover focus areas ranging from health education and housing to traditional economic development financing.

During her State-of-the-State Address earlier this month, Gov. Rell unveiled her fiscal year 2006-07 midterm budget adjustment proposal and announced plans to restructure the Department of Economic and Community Development (DECD). Under the plan, the new Department of Business and Employment (DBE) will provide programs previously administered by DECD, but with enhanced planning and programmatic features, according to the governor's office:

• A new Office of International Commerce to market the state to both U.S. and foreign businesses;
• Additional support for Housing and Community Development planning to provide for better planning in conjunction with the concept of transportation oriented development; and
• The Connecticut Research Institute to improve existing capacity to collect and disseminate statewide data and develop economic policy initiatives.

Additionally, a new Office of Economic Policy will be created within the governor's office to coordinate the efforts of the new Connecticut Finance Collaborative, which would be the successor organization of the Connecticut Development Authority, Connecticut Innovation Inc., and the Connecticut Health Education Finance Authority. According to the governor's office, in merging the authorities, the state can improve program coordination and provide more comprehensive services to attract businesses and create jobs.

The governor's proposed budget also includes workforce-related initiatives in the Labor Department and tax credits for businesses to keep the state competitive:

• $1.5 million for the 21st Century Jobs program to customize job training for employers;
• $150,000 for the Connecticut Career Resource Network to provide career specific public information to students, teachers and guidance counselors;
• $250,000 for expansion of the Connecticut Apprenticeship program.
• Elimination of the corporate tax surcharge;
• A job creation tax equal to 25 percent of the estimated withholding tax paid by the employees in new jobs; and
• A displaced worker credit for companies that hire previously displaced workers.

Within the Department of Higher Education, Gov. Rell is proposing a new $3 million loan forgiveness plan to encourage college students to choose work within "high needs" fields of the state, including information technology. Under the plan, about half of the money would be made available to students who plan on becoming math or science teachers.

The governor's FY 2006-07 Midterm Budget Adjustment is available at: http://www.opm.state.ct.us/budget/2007MidtermBooks/2007GovMidtermBudget.htm