Best Practices for Standards and Disclosure

Policies for Good Standards

Public policies created to establish standards for economic development subsidies should include the following[1]:

Standards

Create and maintain full time jobs in CT. Other states have required that a cost per job standard be developed. For example, a company does not get subsidized if the cost per job is more than $35,000. This is established by dividing the amount of the subsidy by the number of full-time jobs required under the application.

Pay adequate wages.Generally an hourly wage threshold is set with such wage standards based on poverty based or market based formulas. Poverty based formulas do not provide self-sufficient wages, therefore CT should consider wage limits that are more in line or consistent with self-sufficiency standards created for the state. However, as this may not be reasonable, market based formulas are more consistent with the intent of economic development. A percentage of average wage per industry can be set with higher percentages for large companies and smaller for small companies.

Provide adequate and affordable health care benefits.This could be required on a two tier basis for example the company that provides healthcare is allowed a lower wage requirement and the company that does not provide healthcare is required to pay a higher wage. There is a healthcare self sufficiency standard being researched and to be released by the Permanent Commission on the Status of Women in October of 2005.

Pro-rated compensation for part time workers.

Right to organize language. Subsidized companies would be required to sign neutrality agreements. In the past we have used the language "comply with state and federal laws". Pre-emption language should be included to ensure that nothing in the bill requires that any recipient reduce wages or benefits under any collective bargaining agreement or state/federal prevailing wage law.

Full repayment of a loan if the company moves out of state. Currently, if a company moves entirely out of state within 10 years of receiving assistance they must pay back the award. CEO's bill in the past has required that companies moving more than 25% of their full time workforce out of CT within 5 years of receiving assistance must pay back in full to the state.

Reporting and Disclosure

1. Name, address and location
2. Business activities
3. Standard Industrial Classification Manual code
4. Gross revenues of most recent fiscal year
5. Number of employees at time of application
6. Whether the recipient is minority or women-owned
7. Summary of the terms and conditions for the assistance including type and amount of financial assistance, job creation and retention requirements, and anticipated wage rates
8. Amount of investments from private or non-state sources that have been leveraged
9. Economic benefit criteria used in approving or disapproving the application
10. After 1991, a comparison of the jobs to be created, jobs to be retained and the average wage rates for each as projected in the application versus the actual numbers of jobs created and retained
11. For companies receiving assistance after 10/1/2002, progress being made towards their goals and objectives as determined at application (PA 02-86).To improve upon this in CT, economic development agencies should be required to annually report the following information:
    1. Name and mailing address of chief officers of the company
    2. The type, amount and eligible recipients of health care coverage including costs borne by employees
    3. A statement about how the subsidy may have reduced employment at other sites controlled by a parent company
    4. A signed certification by chief officer of recipient as to the accuracy of the report
    5. Economic development agencies should be required to report on compliance with standards as set forth at application
    6. Two year reports stating whether the company has achieved its goals in job creation and retention, wages and benefits
    7. All reports should be compiled and publicly released including progress on goals and objectives
    8. Economic Development agencies should always have access to project sites
    9. Fine those recipients that do not comply with reporting standards
    10. A mechanism for creating a set of goals and objectives for companies receiving subsidies to be measured against for compliance
    11. Annual report to the legislature that measure individual company compliance and overall economic development support and growth being provided to the state from these state subsidies

[1]Based on "Best Practices" as outlined by Good Jobs First in Washington, DC.