February 26, 2002 |
2002-R-0241 | |
ECONOMIC DEVELOPMENT ASSISTANCE AND JOB CREATION: FYS 1995-01 | ||
By: John G. Rappa, Principal Analyst | ||
You wanted to know the total value of financial assistance the state's economic development agencies provided to businesses from FYs 1995-01 and the total number of jobs they created as a result of that assistance.
TOTAL VALUE OF ACTIVE ASSISTANCE
All of the state's economic development agencies annually report the total value of "active financial assistance," which includes businesses that received assistance during the year or that are repaying the agencies for assistance they received in prior years. Some report on businesses that repaid the assistance. The agencies are the Department of Economic and Community Development (DECD), the Connecticut Development Authority (CDA), and Connecticut Innovations, Inc. (CII).
As Table 1 shows, the total value of active financial assistance provided to businesses during FYs 1995-01 was over $ 342 million. The agencies actually spent less than this because the total includes the value of loan guarantees, which commit state dollars only if a borrower defaults on a loan made by a private lender.
Table 1: Total Value of Active Financial Assistance FYs 1995-01
Fiscal Year |
DECD |
CDA |
CII |
Total |
1995 |
23,674,000 |
17,876,150 |
800,000 |
42,351,445 |
1996 |
8,562,000 |
9,934,366 |
1,050,000 |
19,548,362 |
1997 |
10,596,000 |
9,951,056 |
2,998,000 |
23,547,053 |
1998 |
11,849,000 |
23,855,161 |
4,647,000 |
40,353,159 |
1999 |
8,288,000 |
47,359,211 |
9,675,000 |
65,324,210 |
2000 |
1,825,000 |
20,963,943 |
32,948,000 |
55,738,943 |
2001 |
32,321,000 |
42,848,995 |
21,225,000 |
96,032,996 |
Total |
97,115,000 |
172,424,882 |
73,343,000 |
342,882,182 |
Sources: DECD, Report on New and Outstanding Financial Assistance, July 1, 1991- June 30, 2001, Schedule 1
CDA, Annual Report FYE June 30, 2001, Section 5
CII, Job Creation or Retention, FY 1990-June 2001, Active Assistance for Economic Development
Active financial assistance includes different types of assistance. DECD provides grants to prepare sites for development and makes or guarantees loans for capital improvements. CDA makes or guarantees loans for working capital, capital improvements, and job training. CII invests in businesses developing new, innovative products and services. It also finances the development of laboratories for new, start-up biotechnology companies.
TOTAL JOBS CREATED
As discussed in Attachment 1, (2001-R-0693) the law indirectly requires businesses to estimate the number of jobs they plan to create or retain when they apply for state assistance. Not all businesses receiving assistance are required to create jobs. As Table 2 shows, those in the active assistance category for FYs 1995-01 that are required to create jobs created over 13,000 full- and part-time jobs as of June 30, 2001. This total is not a final total since the businesses may still create more jobs as they pay off loans, make royalty payments, or provide other forms of compensation to the agencies.
Table 2: Total Jobs Created as of June 30, 2001 Resulting from Active Financial Assistance From FY 1995-01
Fiscal Year |
DECD |
CDA |
CII |
Total |
1995 |
3,159 |
350 |
169 |
3,678 |
1996 |
1,757 |
384 |
339 |
2,480 |
1997 |
1,200 |
159 |
133 |
1,492 |
1998 |
590 |
2,220 |
154 |
2,964 |
1999 |
82 |
794 |
106 |
982 |
2000 |
34 |
73 |
156 |
263 |
2001 |
1,012 |
229 |
20 |
1,261 |
Total |
7,834 |
4,209 |
1,077 |
13,120 |
Sources: DECD, Report on New and Outstanding Financial Assistance, July 1, 1991-June 30,2002, Schedule 2
CDA. Annual Report FYE June 30,2001, Section 5
CII, Job Creation or Retention FY 1990-June 2001, Job Count
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