Let’s face it, the second Senator Martin Looney and House Representative Brendan Sharkey mocked General Electric for expressing concern over tax increases, the gloves were off. Connecticut and its politicians were going to pay and pay dearly.
Flashback to last year when GE asked our state government to tweak the tax side of the budget because it was becoming too expensive to keep doing business in the state. The Hartford Courant reported that GE was upset that taxes had already been raised 5 times since 2011 and cautioned that they were beginning to explore moving to a more business-friendly state.
Instead, Senator Looney said he was going to call the company’s bluff while Sharkey famously said “They’re not paying any taxes. How much lower can their taxes be in a state?”
Well, fast forward to the present. GE has moved to Massachusetts and Connecticut has lost one of its biggest tax payers and employers. Nice.
GE employed nearly 6,000 people and, according to the company, put out more than $14 billion back into the state to help its local suppliers. It also payed $1.6 million in property taxes. With that gone, Connecticut’s tax roles have taken a tremendous hit.
Now here comes the real pain. The Hartford Courant confirms that GE sold its former Fairfield headquarters to Sacred Heart University for $31.5 million. Susan Bishop, spokesperson for GE, said 25 interested buyers toured the site, but in the end, Sacred Heart was “the best buyer.”
But, with the University classified as a non-profit, it means the 66-acre property is now exempt from paying property taxes.
Fairfield’s first selectman, Mike Tetreau, told the Courant, “I am very concerned about the tax revenue loss to the town and the challenge we have to make that up.” He said Fairfield could be out $1 million a year.
He said local government is already looking at options to cover the loss in tax revenues.
Meanwhile, Sacred Heart is already laying out plans to help Connecticut become a center of education by transforming the property into an “innovation campus.” I mean, on a 1 to 10 on the “I am so excited scale,” they’re a 14.
Sacred Heart says they got the best deal. The institution was apparently planning on building a new academic facility because the university was running out of space. Michael Kinney, senior vice president for finance and administration for the university, said initial estimates of the new construction ran between $35 to $40 million.
Kinney added, “Now we are purchasing a facility that’s less than two tenths of a mile from campus, getting about nine times the space, 800 parking spaces on 66 acres for less.”
But, he is confident that this move will boost the economy instead of hurting it. Kinney says consumer spending made by the school and its students already “stands at close to $56 million.”
Now, with a larger campus, Kinney says, “new direct and indirect spending driven by operational and capital spending by the university, its employees, new students and their families and visitors would be a minimum of $27 [million] to $33 million annually.”
Though that sounds great, many residents of the state are wondering if Kinney’s predictions come true.
But, in the end, GE got the last laugh and, honestly, they deserve it. They sold their property to those educating future generations, so that they can be taught to never look at the hand that feeds them and say they’re calling their bluff.