Hartford Business Journal

6 Hartford Business Journal • April 4, 2016 www.HartfordBusiness.com TOP STORY Bronin makes case for fiscal commission Hartford Mayor Luke Bronin asked legislators last week to give the city legal authority to right its fiscal ship without asking for a state bailout or receivership. The freshman mayor told members of the Finance, Revenue and Bonding Committee that Hartford is facing "a full blown fiscal crisis" and argued that a "financial sustainability commission" is the city's best path forward. Hartford's estimated deficit for fiscal year 2017 is $48.5 million, Bronin said. That's up from a recent estimate of approximately $32 million. The proposed commission would be co-chaired by the mayor and secretary of the Office of Policy and Management or his designee. It would also include the city treasurer, council president, four mayoral appointees and others. The MetroHartford Alliance said it supports Bronin's efforts to restructure union compensation and benefits and to reduce the city's annual pension contribution. But the business group asked that lawmakers add language to the bill, including a gradual increase of the city's artificially low residential property assessment ratio, a sale-leaseback arrangement for state proper- ties in the city, and caps on a proposed commercial property surcharge. Several lawmakers said they understood the difficult position Hartford is in, but were reluctant to intervene in city affairs, particularly if that interven- tion was viewed as a weakening of collective-bargaining rights. The Con- necticut AFL-CIO opposes the bill. MANUFACTURING Middletown aerospace manufacturer taken over Pegasus Manufacturing, headquartered in Middletown, has been acquired by a Missouri manufacturer. Terms of the deal with Leggett & Platt Inc. were not disclosed. Pegasus, founded in 1989, is a second generation family-owned aerospace manufacturing company specializing in fabricated tubes and pipe assemblies, precision manufacturing and gears. Pegasus parts are found on a variety of commercial and military aircraft engines as well as land-based turbines. Leggett & Platt designs and produces engineered products found in most homes, offices and automobiles. The company is comprised of 17 business units, 20,000 employee-partners and 130 manufacturing facilities located in 19 countries. According to a statement from the company, Pegasus will continue to be managed by its President Chris DiPentima and the existing management team. REAL ESTATE UConn approves $12.6M W. Hfd. campus bid UConn trustees last week approved a plan to sell the university's West Hart- ford campus, which has drawn a $12.6 million purchase offer from a Chinese education organization. UConn administrators gained approval to pursue sale of the 58-acre campus bordered by Lawler Road, Trout Brook Drive and Asylum Avenue, to Weiming Educational Group, which plans to convert it to a private high school. The administration also won approval to formally notify the town of West Hartford of Weiming's $12.6 million offer, for which contractually the town holds the right of first refusal – meaning it can negotiate with UConn to purchase the campus property for the same price. West Hartford Town Manager Ron Van Winkle said Weiming and the town already have an agreement in which Weiming will submit its redevelopment plan for the site to the town's planning department and zoning commission for review and approval. Van Winkle said the town has no interest in playing middleman, buying the property first, then turning around and selling it to Weiming, possibly at a profit. GOVERNMENT, POLITICS & LAW Human services group: Sales tax change could net $2.5B A human services coalition is urging state lawmakers to eliminate all sales- tax exemptions except those on food, a change it claims could generate $2.5 billion in additional revenue. The pitch comes as nonprofits sweat the outcome of the ongoing legislative session, which could result in millions of dollars in cuts over the next few years. Roger Senserrich, policy director for the Connecticut Association for Human Services, said in the association's e-newsletter that Connecticut's tax code has a "monumental amount" of carve outs, exemptions, loopholes and spe- cial provisions that leave a large percentage of the state's economy untaxed. CAHS, citing figures from the Office of Fiscal Analysis, said the state currently collects approximately $4 billion in annual sales tax revenues. CAHS said eliminating the exemptions could also lead to lowering the over- all sales tax rate, which would be a positive step for low-income families. Employers to see lower FUTA tax in 2016 The state Department of Labor says Connecticut employers will pay a lower federal unemployment insurance tax, with no special assessment, this calen- dar year. The lower rates are the result of the state's repayment of a federal loan that was needed to pay out unemployment insurance benefits during the recession. The state said with the loan now fully repaid, Connecticut employers will see their Federal Unemployment Tax Act (FUTA) taxes reduced to the customary rate of 0.6 percent for calendar year 2016 – a significant drop from the total FUTA tax rate of 2.7 percent for calendar year 2015. The labor department said an employer's tax will return to an average of $42 per employee compared to the $189 paid while the loan was being repaid. In addition, the state will pay the final interest due to the federal govern- ment this year, which means employers will not pay the additional special assessment. Budget cuts pass in bipartisan vote; layoffs still coming A bipartisan budget deal struck last week has resulted in the state deficit being reduced by $220 million. Legislators say they were able to make the cuts without impacting towns and cities and also restoring some funds to hospitals. However, there will still be state-employee layoffs Gov. Dannel P. Malloy said after the vote. A lot of the reduction comes from a one-time transfer of funds totaling $87.2 million. The rest come from a variety of cuts, large and small, in state spending for the fiscal year that ends June 30. The deficit could potentially grow this year depending on revenues from the state income tax due April 18. After the budget deal passed, Malloy said legislators from both chambers must tackle the 2016-2017 budget, which has been projected to be short by $900 million. HEALTH CARE Study: State ranks well for healthcare access Connecticut ranked seventh nationally in a study analyzing data on health- care access, affordability and quality across all 50 states. The top state for healthcare access was Maryland. Texas ranked last. SmartAsset, a financial technology company that provides advice on personal finance decisions, ranked states on six metrics. Connecticut ranks in the top 10 for all three measures of insurance cover- age that SmartAsset considered. Its overall insured rate of 93.1 percent ranks sixth in the U.S., as does the 88.3 percent coverage rate for people in low- income households. SPORTS & OUTDOORS Bloomfield golf club relinquishes course management Bloomfield's Tumble Brook Country Club has turned over its management to Troon Privé Operations, a private course management company. An announcement of Troon's management takeover alluded to problems the club encountered during the recession that started in 2008, three years after the club completed an extensive renovation of its 27-hole layout. "Like many private clubs, the recession of 2008 hit Tumble Brook pretty hard. The members have done an outstanding job of resurrecting the club," said Jim McLaughlin, senior vice president, Troon Privé Operations. Troon also operates Foxwoods' Lake of Isles golf course in North Stonington. No financial details were announced. Troon, based in Scottsdale, Ariz., will handle the club's golf course management, development and marketing. Tumble Brook first opened in 1922. BY THE NUMBERS $19.7M The highest amount of low-interest loans, training funds and tax credits the state will award Bob's Discount Furniture to more than double the size of its Manchester headquarters and create 125 new jobs. 61% The portion of Connecticut residents, polled by healthcare union SEIU international, who favor increasing the state's minimum wage to $15 between 2018 and 2022. 29% The portion of 55 major retailers surveyed by CardHub that reported being fully compliant with new rules requiring chip-in-card readers at their checkout counters. 12,000– 16,000 The average number of weekday passenger trips on CTfastrak in recent months. TOP 5 MOST READ on HartfordBusiness.com ■ Bronin makes case for fiscal commission ■ UConn mulls $12.6M W. Hfd. campus bid ■ Budget cuts pass in bipartisan vote; layoffs still coming ■ Furniture chain gets state funds to expand ■ Gr. Htfd employers among Forbes top 500 best STAY CONNECTED For breaking and daily Greater Hartford business news go to www.HartfordBusiness.com. HBJ on Twitter: @HartfordBiz HBJ on Facebook: www.facebook.com/HartfordBiz HBJ on LinkedIn: www.linkedin.com/company/ the-Hartford-Business-Journal Daily e-newsletters: HBJ Today, CT Morning Blend www.HartfordBusiness.com/subscribe Weekly e-newsletters: CT Green Guide Weekly, CT Health Care Weekly www.HartfordBusiness.com/subscribe WEEK IN REVIEW Hartford Mayor Luke Bronin. P H O T O | C O N T R I B U T E D

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