Editorial: Gov. Malloy's deal with UTC is a necessary evil
Two weeks ago, United Technologies Corporation (UTC) was in the news for cutting 600 jobs in the next several weeks. As one of the largest providers of jobs in Connecticut, especially in the technology sector, UTC's decision was very impactful. The elimination of jobs in Connecticut was part of larger worldwide reduction in workforce as 11,600 jobs (5 percent of its workforce in total). This past week, UTC was again on the front page due to its deal with Gov. Dannel P. Malloy. UTC will now be permitted to cash in $400 million tax credits it has earned in previous years if legislation passes to permit this. These funds are part of "stranded tax credits" are unused tax breaks from previous years. Many are questioning the move, but when UTC controls 14,100 jobs in East Hartford and an additional 10,000 across the state, it becomes quite a necessary evil. Malloy also estimates that UTC affects more than 75,000 jobs in the state as there are many small businesses that provide subcontractors and supplies for UTC projects.
With this in mind, the deal is not perfect. While the tax credits will be used in part to fund a UTC expansion with a $500 million price tag, UTC still can allow it's total employment in East Hartford to fall to 12,450 from the current 14,100 without penalty. However, as Malloy stresses, it is important for Connecticut to maintain a strong engineering base. This decision goes hand in hand with Malloy's commitments to expand STEM programs at the University of Connecticut. The UTC expansion encompasses changes at Pratt & Whitney that include a new headquarters and engineering center and modifications to the engineering lab at Sikorsky Aircraft.
Not granting the deal to UTC would have further reduced their presence in Connecticut, so while the agreement may not be perfect, Dan Malloy's hands are pretty much tired. Many engineering companies owned by UTC have been in CT for almost a hundred years; Sikorsky Aircraft has been in Connecticut since 1929. Currently, UTC holds the cards, and Connecticut's future lies in their hands. It is up to them if this state will remain a center for engineering or if our technology strength will decrease over time.
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