Kissel to vote “No” on Jackson Labs

The Chief Deputy Minority Leader of the State Senate says he will vote against The Jackson Laboratory proposal at next week’s General Assembly special session. Sen. John Kissel, R-Enfield is hoping GOP lawmakers in both chambers do the same. The fact is, the Malloy administration doesn’t need one GOP vote to get its nearly $300M incentive package for the Maine-based genetics lab passed, but Sen. Kissel believes Gov. Dannel Malloy-D needs Republican votes for cover, if the risky project fails.

“He (Gov. Malloy) would be more than happy to have some Republican finger prints on this particular proposal, so that if it goes belly up, there’s enough blame to go around,” Sen. Kissel said on my afternoon radio show. I’m not urging by colleagues on the Republican side to vote no, but I think that an awful lot of my colleagues in my caucus and in the House Republican caucus have an awful lot of questions, regarding the Jackson Laboratory proposal. So I’m not so sure how many votes will be coming from the Republican side of the aisle.

In return for 300 jobs Jackson Labs promises to create over 10 years, in a 173,000 square foot campus at the newly expanded UConn Healthcare Center in Farmington, Gov. Malloy is forking over $191M in a revolving one percent loan, over 10 years, plus another $99M that Jackson Labs can use at its own discression. The administration claims the 300 jobs will spin off another 6,000 jobs, a figure most Republicans claim is dubious. 

“I don’t think this is a good deal for the state,” Sen. Kissel told my radio audience. “It (Jackson Labs) may be a good company, but the whole idea of sort of propping up one company to the disparagement of everybody else in Connecticut, I think hurts those good companies that have been here.”

Sen. Kissel said Jackson Labs is world recognized but that their revenue comes from two areas. “They raise laboratory mice for experimentation, 6,600 different breeds. Half of their revenue comes from distributing mice throughout the country. The other half comes from government grants and endowments.

Because Bar Harbor, Maine-based Jackson Lab is non-profit it pays no taxes, not even property taxes, a bone of contention to some people in Maine. In July, the Portland Press Herald wrote “some of Bar Harbor’s roughly 5,000 residents view the company’s mouse production division as a profit-making arm that should pay property taxes, said Ruth Eveland, chairwoman of the Bar Harbor Town Council.” Bar Harbor Town Treasurer Stanley Harmon told the paper, “that if Jackson were a for-profit company it might pay about $2M in annual property taxes.”

Meanwhile, Sen. Kissel said that Jackson Lab will not have to pay one penny of interest on the one-percent loan, until the 10th year, and then can pay back the taxpayers’ interest, with taxpayer-given money from the state’s $99M handover to Jackson.

“We have a trust, a duty to protect the taxpayers’ dollars,” said Sen. Kissel. He said the legislature “should create some reasonable benchmarks” with Jackson Lab. “I think it’s preposterous to say that they have 10 full years to create 300 jobs. My constituents are saying that’s $1M per job and we are not going to know whether this will be a beneficial endeavor or not, at least legally, for 10 whole years.”

In 2008 and 2009, with mice sales declining, Jackson Lab faced an annual loss of $15M. To offset this, the company laid off 55 staffers and eliminated another 55 jobs through attrition. In 2009, the company broke even, although it reportedly lost millions in investments. According to the Portland Press Herald story, “Jackson Lab had $200.1M in unaudited operating revenue in fiscal year 2011.”

The numbers might lead one to ask, if Governor Malloy’s latest questionable business outreach is an incentive package or a taxpayer bailout for an operation that has yet to even locate in Connecticut.

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