Business Tax Credits: The Blank Check in Connecticut's Economic Development Portfolio? (March 2008)

Shelley Geballe, JD, MPH

Connecticut increasingly relies on tax credits to promote its economic development. The state's revenue loss from corporation business tax credits (an estimated $305.6 million in FY09) has increased 113-fold since 1987. However, no comprehensive economic development plan seems to guide the adoption of new tax credits. Indeed, more than one-third of the projected FY 09 revenue loss is attributed to three new film industry credits.

Relatively few of Connecticut's business tax credits put a ceiling on the total amount of credits that can be claimed in a given year. As a result, the state's total revenue loss through tax credits is open-ended. Currently, there is no process for the on-going review of existing current tax credits and repeal of those with inadequate economic return. (March 2008)

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