Most beneficiaries of Connecticut subsidies are large companies receiving state and local tax breaks. Finance and insurance companies have lobbied for and won numerous special concessions, such as a 100% credit on insurance premiums. Those programs are often used to lure financial services firms from New York. The manufacturing, data center, and film lobbies have won their own tax breaks. The state legislature creates and passes specially crafted subsidy bills to benefit individual companies such as Lockheed Martin.
The Department of Economic and Community Development (DECD) is the state’s main economic development agency, which oversees most subsidies. Connecticut Innovations, Inc. approves sales and use-tax exemptions. It discloses applicant names and amounts requested, in advance of final approval by its Loan Committee.
Overall, Connecticut has good disclosure of subsidy recipients, including outcomes. The data is posted to the Connecticut Open Data portal and is included in the DECD’s annual reports. Those reports include cost and evaluations of subsidies administered by DECD and by other agencies.
Connecticut lists over a dozen of programs related to economic and community development and historic preservation under the GASB 77 rule. A quarter of localities also list lost revenue due to Enterprise Zones, Tax Increment Financing, and other programs. Most school districts do not produce financial statements, and those that do, do not mention the rule.
- See our analysis of GASB 77 data from 2017-2021 on our Connecticut State Fact Sheet.
- See who is responsible for the implementation of GASB 77 on our Connecticut State Road Map.
The DECD is charged with evaluating subsidies it administers. This can be a flawed system because that means there is no independent oversight. That said, the agency’s evaluation of its film subsidy showed the program caused net revenue losses of $58 million in a single year, and over a half a billion dollars in a decade. Inexplicably, however, the agency recommended keeping the program.