State Senator Gayle Slossberg
March 25, 2008
Senate Democrats Say Too Much Connecticut Taxpayer Money is Being Spent to Grow Jobs in Other States
New plan announced to help local companies secure state contracts—keep more tax dollars and jobs in Connecticut
Senator Williams speaking at the press conference to announce a proposal to give an advantage to in-state businesses competing with certain out-of-state companies for state contracts. (March 25, 2008)
State Senate President Donald E. Williams, Jr. (D-Brooklyn), Senator Edith Prague (D-Columbia), Senator Gayle Slossberg (D-Milford), Senator Gary LeBeau (D-East Hartford), President of the Chamber of Commerce of Eastern Connecticut Tony Sheridan, and a small business owner held a news conference at the Legislative Office Building in Hartford to announce a proposal that would help grow jobs and tax revenue for Connecticut.
This coalition of Democratic senators and business advocates wants to help local companies compete for, and win, Connecticut state contracts. Under the plan announced today, Connecticut would give an advantage to in-state businesses competing with certain out-of-state companies for state contracts.
Currently, the State of Connecticut has hundreds of contracts, worth hundreds of millions of dollars, with out-of-state companies. Many of those companies are from states that have enacted laws that make it difficult--or even impossible--for Connecticut companies to compete for their state's contracts. For example, a printing company from Michigan can win a state contract in Connecticut, but the same is not true for a Connecticut company competing in Michigan: Michigan sets aside all state printing contracts for Michigan companies.
"Connecticut companies deserve a level playing field and right now that doesn't exist," said Senator Williams. "We can't change the laws in other states but we can give an advantage to local companies when they're competing with certain out-of-state businesses, helping ensure that more of our tax dollars and jobs stay in Connecticut."
"There are a lot of ways to grow jobs in Connecticut," said Senator LeBeau, who is co-chairman of the Commerce Committee. "Targeted tax breaks and state investments in high-tech start-ups are one way to do it. At a more basic level, we can and should be trying to ensure that as many of our state tax dollars as possible are going to in-state firms to do the kind of work that so often goes out-of-state. I'm not talking about giving away the store. I'm talking about a leveling of the national playing field that will result in a greater investment in our local economy and our state workforce."
"Each and every month Connecticut businesses work harder to keep competitive, and the availability of jobs in our state depends upon their success. Our state government can help with an assurance that state contracts stay in-state wherever and whenever possible," Senator Prague said. "Our state government never hesitates to support UConn, our submarine base, and so many other things unique to Connecticut, and rightly so; it's time we become more supportive and promote home state businesses with state agency contracts."
"The clean contracting legislation that we crafted last year set the stage for this proposal," said Senator Slossberg. "That legislation requires the new contracting standards board to consider the value of awarding a state contract to a Connecticut business, as opposed to outsourcing to another state. This proposal puts the meat on the bones of last year's legislation and will help to create a clearer process for offering incentives to Connecticut businesses, which are the economic lifeblood of our state."
"I support the Senate Democrats' effort to create a level playing field for Connecticut businesses," said Sheridan. "The Chamber of Commerce of Eastern Connecticut has started a similar 'buy local' program and it is effective and popular. The Senate Democrats have my full support in their effort to keep tax dollars in Connecticut and help grow jobs."
How are Connecticut companies being hurt?
Twenty states have enacted some type of preference law, giving an advantage to local companies competing for in-state contracts. At the same time, Connecticut does not have a preference law.
How often does the State of Connecticut ship taxpayer money--and jobs--to out-of-state companies?
It happens all the time. Information provided by the Department of Social Services (DSS), for example, shows that that agency alone is sending more than $117 million of taxpayer money to out-of-state companies: this includes $38 million to a firm in Georgia to process child support payments and $700,000 to a company in Arizona for actuarial and consulting services for Gov. Rell's Charter Oak Health Care Plan.
What can Connecticut do?
Connecticut should enact a reciprocal preference law, joining the 35 other states which already have one. By doing this, Connecticut companies competing for in-state contracts would have an advantage over any competing company from one of the 20 states with a preference law.
How would local companies benefit from a reciprocal preference law?
More taxpayer money and jobs would stay in Connecticut if a reciprocal preference law was enacted because local companies would receive a comparable advantage when competing with companies from the following states:
Alabama: 5% for "preferred vendors"
Alaska: 5%-15% for various target vendors
Arkansas: 15% for correctional industry only
California: 5% for various target vendors (small and micro businesses, businesses operating in an in-state distressed municipality, business operating in an enterprise zone)
Delaware: General preference for in-state public works contractors
Florida: 5% for bidders that use in-state materials
Hawaii: 3%-15% for various types of vendors
Idaho: 10% for printing contracts only
Illinois: 10% for the use of Illinois coal and other various preferences
Indiana: 15% for in-state small businesses
Louisiana: 4%-10% for various target vendors
Michigan: all printing is set-aside for Michigan printers
Nevada: up to 10% for use of recycled products manufactured in-state
New Mexico: 5%
Ohio: 5%
Oregon: all printing set-aside for in-state printers
South Carolina: 7%
Virginia: 4% for coal mined in Virginia
West Virginia: 2.5%-5%
Wyoming: 5% for commodities and construction, 10% for printing
In addition, the law would deter other states from enacting preference laws which would hurt Connecticut companies competing for contracts.
Is it complicated to enact a reciprocal preference law?
No. As an example, North Carolina's reciprocal preference law says:
North Carolina General Statutes 143-59(b) For the purpose of determining the low bidder on all contracts for equipment, materials, supplies, and services valued over [amount], a percent of increase shall be added to a bid of a nonresident bidder that is equal to the percent of increase, if any, that the State in which the bidder is a resident adds to bids from bidders who do not reside in that State.
- Resident bidder--A bidder that has paid unemployment taxes or income taxes in this State and whose principal place of business is located in this State.
- Principal place of business--The principal place from which the trade or business of the bidder is directed or managed.
What is the difference between a preference law and a reciprocal preference law?
Connecticut is a net exporter of good and services and its companies have contracts in many states. When a state enacts a preference law, it disadvantages in-state businesses that apply for out-of-state contracts when the contracting state has a reciprocal preference law (35 states). The disadvantage that business will receive out-of-state is equal to any advantage granted in-state. So, the businesses will have an advantage in one state but be at a comparable disadvantage in 35 others. In short, a preference law could do more harm than good.
|
Senator Slossberg’s |
Listing of Senator Slossberg’s recent press releases and a Press Kit with official head shots and bio. |
Press Aide Jaclyn Falkowski |
