Alert: House approves bill that will hurt Connecticut’s global competitiveness

Sends the bill to Senate; immediate action needed.

Contact your state senator and urge rejection of HB-5279

(April 21, 2006) The House of Representatives yesterday passed a bill that, if enacted, would strike a blow at Connecticut’s efforts to be more competitive in the global economy. Most states have rejected these kinds of “anti-sourcing” bills that restrict the ability of companies that contract with the state to perform the work in the most cost-efficient means possible.

Legislation that makes Connecticut appear to be hostile to allowing companies to operate freely in the global marketplace runs counter to rhetoric from legislators that the priority of this session is to expand economic growth and create jobs.

Supporters of this legislation are mistaken if they believe it will protect Connecticut jobs. Companies will be less likely to locate in a state that sets up barriers to the efficient operation of their business if they choose to bid on state contracts.

HB-5279 would compel companies bidding on state projects to reveal where they intend to perform the work and requires the governor to review all current state contracts to see if work is being done outside Connecticut or the country.

The bill allows state agencies to award contracts based on the locations where the services will be performed and may penalize contracted companies for not making “a reasonable effort” to keep work in Connecticut.

But Connecticut is home to hundreds, if not thousands of businesses, that have locations and operations in many other states and in other countries.

Hindering those Connecticut-based companies from being able to provide the most cost-effective and efficient state services only harms the state’s overall economy and increases costs.

What’s more, the Office of Fiscal Analysis says the potential cost of HB-5279 to state agencies is significant, and funding for the measure is not included in the revised budget approved by the Appropriations Committee.

Other anti-economic development bill rejected

However, on a positive note, the Commerce Committee rejected SB-560, which would have extended existing prevailing-wage-law requirements to construction projects receiving more than $400,000 (or $100,000 for repair or remodeling projects) from state economic development agencies.

The Connecticut Conference of Municipalities has estimated that requiring the prevailing wage for economic development projects would increase the cost of the projects by about 21%.

A clear indication of how the bill would have weakened economic development is that the Office of Fiscal Analysis said the bill likely would have caused fewer businesses to apply for help.

For more information, contact CBIA’s Bonnie Stewart at 860-244-1900 or
stewartb@cbia.com.