Hartford Business Journal

6 Hartford Business Journal • May 1, 2017 www.HartfordBusiness.com TOP STORY Lawmakers say major tax hikes are off the table When legislative leaders disclosed last week that the Finance, Revenue and Bonding Committee wouldn't recommend any major tax hikes this year, that same panel already was more than three hours into a public hearing on proposals to do just that. The seemingly pointless exercise, though, captured perfectly the dual problems plaguing the General Assembly: partisan gridlock and a rapidly eroding fiscal situation. It is difficult to rule out tax hikes when the potential hole in the next fiscal year is about to top $2 billion, or more than 10 percent of the General Fund. But with Democrats deadlocked 18-18 with Republicans in the Senate, and holding a slim 78-71 edge over the GOP in the House, neither side is eager to support the unpopular choices that may be needed to balance the books. Meanwhile, state income tax receipts continued to erode, falling $290 million or 20 percent below the level anticipated in the current budget for the month of April. That trend threatens to significantly expand major deficits already fore- cast for the next two fiscal years. Gov. Dannel P. Malloy's administration has warned since February that finances, unless adjusted, would run $1.7 billion in deficit next fiscal year and $1.9 billion in 2018-19. And as the numbers slipped, business and labor leaders sparred over the pros and cons of tax hikes. – Keith Phaneuf | CT Mirror ADVERTISING, MEDIA & MARKETING ESPN cuts familiar faces in major layoff ESPN is cutting a number of its most familiar faces as part of a larger layoff of 100 on-air personalities and writers. ESPN didn't release a full list of those let go. But among the cuts are former NFL quarterback and analyst Trent Dilfer, prominent NFL reporter Ed Werder, senior baseball writer Jayson Stark and host Jay Crawford, all of whom shared the news about themselves on Twitter. Most people affected by the job cuts, including television, radio and online per- sonalities, were informed of the decision April 26, and many of the layoffs took effect immediately. ESPN also plans to cut a limited number of additional off-air employees. ESPN is shifting its focus toward digital as it faces cable subscriber losses and increased pressure on costs. The network has spent billions of dollars in recent years on rights deals with major sports leagues and college conferences. ESPN employs about 8,000 people around the world. – CNNMoney TECHNOLOGY Avon's iDevices acquired by Hubbell Shelton-based manufacturer Hubbell Inc. has acquired iDevices, an Avon home technology-network system company. Hubbell, with 2016 revenues of $3.5 billion, makes electrical and electronic products for residential construction, industry and utilities. IDevices manufac- tures connected power, lighting and climate control products for homeowners, professional installers and builders. Terms of the deal were not disclosed. The rationale for the acquisition is based on a "shared focus on innovation," similar product portfolios and "common paths to market," the companies said. Christopher Allen, CEO and founder of iDevices, built his company around one of the first app-enabled inventions, the iGrill, a Bluetooth-enabled cooking thermometer, he said. His company was founded in 2009. ECONOMY & LABOR Survey: CT regs, policies biggest export challenge The single greatest challenge for Connecticut exporters is government trade policy and regulation, according to 40 percent of participants in a new Connecti- cut Business and Industry Association survey. Other main challenges to trade include international competition (23 per- cent), overall costs (20 percent), and cultural differences (12 percent), ac- cording to the CBIA's sixth biennial International Trade Survey of Connecticut Businesses. The survey focuses on the state's current exporting environment, barriers to growth, and the risks and rewards for businesses entering the interna- tional market. In a state that exported $14.4 billion in goods and services in 2016, compris- ing 1.5 percent of total U.S. exports, state taxes also are considered a disincen- tive. Yet, the survey found 70 percent of state exporters take advantage of the state's R&D tax credit and 48 percent take the domestic production deduction, among other state tax incentives. GOVERNMENT & POLITICS Strapped CT eyes securitizing its income tax Connecticut's treasurer says securitizing part of the state's tax-revenue stream may provide a less costly, near-term solution for replenishing its cash horde amid its fiscal crisis. State Treasurer Denise L. Nappier said last week that issuing bonds secured with a portion of the state's personal income tax receipts could replenish the "rainy day" fund, while exposing state taxpayers to a higher bond rating that translates to lower borrowing costs. Nappier said the structure has been used successfully in other states — Massachusetts, New York and California — by capitalizing on their high wealth levels to insulate the bonds from budget and pension concerns. Connecticut is among the wealthiest states, per capita, in the nation. She said the measure has been introduced in the General Assembly's Fi- nance, Revenue and Bonding Committee as House Bill 7321. HOSPITALITY & TOURISM Tourism advocates push to restore $15M in statewide marketing The Connecticut Tourism Coalition (CTC), an alliance of Connecticut tourism advocates, is asking lawmakers to restore 3 percent of the total taxable lodging revenue for use to promote tourism. That 3 percent, about $15 million, had been added to the 12 percent oc- cupancy tax in 2010 and went to fund tourism, but since 2011 that money now goes into the General Fund. The coalition specifically would like the money to be dedicated to tourism mar- keting and promotion to help increase jobs and overall revenues for the state. Distillery expansion approved in Ellington An Ellington distillery received unanimous support from the Planning and Zoning Commission last week to expand the business into two 2,000-square- foot areas in a warehouse on Industrial Drive off of Route 83. The PZC approved a special permit and site plan modification requested by Richard B. Gummoe of Vernon for his Connecticut Valley Distillery. He told the commission he intends to expand the distillery from its current 1,000-square- foot location at 7 Industrial Drive to include two adjoining 2,000-square-foot areas in a warehouse at 5 Industrial Drive. According to the special permit request, the two 2,000-square-foot spaces in the warehouse would be used for the fermentation, blending, aging, bottling, filtering, and general processing of sugars into beverage alcohol. Sales and sampling will be available to the public as well with tables and a counter where people can sit and sample the product before purchasing it. – Tim Leininger | Journal Inquirer Spirit Airlines takes flight at Bradley The first of Spirit Airlines' flights from Bradley International Airport arrived from Orlando, Fla., last week and later departed as the low-cost airline begins to serve Connecticut customers. Spirit's new first ultra-low-fare service at Bradley in Windsor Locks includes the new route to Orlando and another route, which is seasonal, to Myrtle Beach, S.C. Spirit offers fares as low as $49 for members and $79 for nonmembers, the company said. The Orlando service will include a daily, year-round route, while Myrtle Beach will see seasonal service four days a week. The airline will also provide daily, year- round service to Ft. Lauderdale beginning June 15. BY THE NUMBERS $14.4B The value of goods and services exported out of Connecticut in 2016, down 5.5 percent from a year earlier, according to the Connecticut Economic Digest. $1M The renegotiated price the town of West Hartford has agreed to pay to purchase UConn's soon-to-be- vacant satellite campus in town. 100 The approximate number of ESPN employees laid off last week, as the Bristol-based sports entertainment giant faces a declining subscriber base. $15M The amount of state funding Connecticut's tourism industry lost and is looking to have restored to promote the sector through marketing and advertising. TOP 5 MOST READ on HartfordBusiness.com ■ CT budget process collapses amid dissension ■ ESPN will lay off 100 on-air personalities and writers ■ UConn trustees approve $1M sale of W.Htfd. campus to town ■ Amidst investigations, vo-tech schools chief to resign ■ Strapped CT eyes securitizing its income tax 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 Senate Republican Chairman L. Scott Frantz and Democratic House Chairman Jason Rojas at a public hearing of the Finance, Revenue and Bonding Committee last week. P H O T O | C T M I R R O R

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