Hartford Business Journal

6 Hartford Business Journal • May 22, 2017 www.HartfordBusiness.com TOP STORY Lawmakers pitch new budget plans as deficit widens Gov. Dannel P. Malloy, House and Senate Democrats and Republicans all pitched new budget proposals last week that aim to close a widening $5 billion deficit projected for the next two fiscal years. House and Senate Democrats recommended opening a new casino, le- galizing marijuana and imposing deep cuts to municipal aid and public col- leges and universities to balance the next two-year state budget. And while their plan begins the process of establishing tolls in future years, it strips transportation reserves in the short term while selling 35 acres in Hartford along the elevated Interstate 84 highway to keep the state's transportation program afloat. House and Senate Republicans called for Malloy to get an extra $650 mil- lion in concessions from unionized state employees to solve the growing budget crisis. The proposals would boost the ask from unions from the nearly $1.57 billion target Malloy announced in February to about $2.2 billion. House Republicans also recommended eliminating a sales tax revenue- sharing program with cities and towns; dramatically reducing the Earned Income Tax Credit (EITC) for the working poor; and capping state borrowing. Malloy has recommended more than $700 million in cuts to municipal aid to help compensate for a $1.5 billion projected decline in state income tax receipts over the next two years. Malloy's plan would also add about $80 million in annual tax hikes to the $600 million in new yearly revenue he recommended three months ago. Most of the increase comes from boosting the real estate conveyance tax, though the governor also recommended ending the sales tax exemption on nonpre- scription drugs and imposing certain restrictions on business tax credits. Malloy's plan also maintained controversial proposals to expose nonprofit hospitals' real property to local taxation and to bill cities and towns for a por- tion of teachers' pension costs — though the latter proposal was capped. — Keith Phaneuf | CT Mirror TECHNOLOGY E. Hartford clean energy firm delivers hydrogen recovery system to NASA East Hartford-based Sustainable Innovations says it has delivered to the NASA Stennis Space Center a first-of-its kind system designed to recover hy- drogen from certain waste streams. The company, which develops and manufactures clean energy products, said its hydrogen-based energy conservation system can recover hydrogen released from cryogenic storage, or separate hydrogen from helium used in rocket test operations. The system uses the company's proprietary electrochemical process to purify and compress recovered hydrogen to commercial storage pressures, facilitating its reuse for vehicle fueling and other needs. MANUFACTURING CT manufacturers say more training programs needed to fill worker shortage More training beyond what manufacturers are already doing needs to be put in place to enable employers to fill 13,600 job openings by 2018, according to a new survey spearheaded by the Connecticut Business and Industry Association. A total of 157 manufacturers took part in the 2017 Survey of Connecticut Manufacturing Workforce Needs in December and January, and virtually all of them said they plan to grow their workforce over the next three years. Ninety- eight percent of them are seeking to fill full-time jobs, but they don't think there are enough opportunities to train workers fast enough. The CBIA is recommending several policy changes to help bolster the future workforce. They include: Expanding the state's community college technical training programs; expanding the Small Business Express Program to reach larger manufacturers; increasing public school efforts to educate students, guidance counselors and parents about careers in modern manufacturing; and supporting state and private school engineering programs. Enfield's STR Holdings could close amid restructuring Based on millions of dollars in first-quarter losses, Enfield's STR Holdings Inc. said it is reorganizing and could shut its doors as it works to recover nonpay- ments from at least three clients in China. Vice President and Chief Financial Officer Thomas D. Vitro reported in a U.S. Securities and Exchange Commission filing that STR is exploring options for restructuring its business, which makes material that insulates solar-energy- generating equipment. In the quarter ended March 31, STR lost about $3 million, or 16 cents per share, a similar loss to last year. Sales revenue also fell to $3.71 million in the first quarter, compared to $6.42 million in the year-ago period. "We incurred bad debt expense of $2.6 million during 2016 and filed lawsuits against three customers of STR China for non-payment during 2016," Vitro re- ported. "Other customers in China are significantly behind terms." Even if STR China prevails in court, payment is not assured, he said. GOVERNMENT, POLITICS & LAW S&P lowers Hartford debt rating Given Connecticut budget uncertainties, S&P Global Ratings has lowered its rating on the city of Hartford's general obligation bonds to "BBB-" from "BBB" — just above "junk-bond" status — and placed the city on a credit watch, the ratings agency said. The downgrade includes a lower rating on the Hartford Stadium Authority's lease revenue bonds to "BB+" from "BBB-," which is still generally considered investment grade. The credit watch has negative implications, S&P said. The ratings agency says putting the city on a credit watch reflects its expec- tation that within the next 90 days, there would be "clarity as to the level of state support the city will receive." "The downgrade and the credit watch placement reflect the heightened un- certainty on whether the state will increase intergovernmental aid or otherwise lend the necessary state support to enable Hartford to achieve structural bal- ance and prevent it from further fiscal deterioration," S&P credit analyst Victor Medeiros said in a statement. HEALTH CARE Hartford Hospital says it needs more operating rooms to meet demand Hartford Hospital wants to add two operating rooms to its main campus to accommodate current and expected surgical volume, according to a Certificate of Need filed last month with the state Office of Health Care Access. The cost of the project is estimated at $2.5 million. The hospital has begun initial work on the operating rooms, but would not complete them or bring them online until receiving state approval, according to Hartford HealthCare spokes- man Shawn Mawhiney. The hospital, which currently has 42 operating rooms, cites a 28 percent growth in surgical minutes since 2013 and says growth in surgical specialties, including orthopedic, cardiovascular and complex neurosurgical cases has cre- ated the need for more operating room space. Hartford slips to No. 13 on national fit list The Hartford area ranks 13th in a 2017 nationwide fitness index from the American College of Sports Medicine (ACSM) and the Anthem Blue Cross and Blue Shield Foundation, down four spots from 2016 and the region's worst showing since it began getting ranked in 2009. The 10th annual American Fitness Index is a scientific snapshot of the health and fitness status at a metropolitan level using data made up of personal health, community and environmental indicators. BY THE NUMBERS $180M The amount of annual state tax revenues lawmakers say legalizing recreational marijuana would bring to Connecticut by fiscal 2018-19. 13,600 The number of jobs Connecticut manufacturers expect to have available through 2018, according to a new Connecticut Business and Industry Association survey. 100 The approximate number of rooms UConn is looking to have built within a new hotel on its Storrs Center development in Mansfield. $2.2B The savings House and Senate Republicans want to extract from state employee unions in order to close a $5 billion deficit projected for the next two fiscal years. TOP 5 MOST READ on HartfordBusiness.com ■ Report: More CT ratepayers paying higher third-party prices ■ S&P downgrades Hartford's debt rating ■ $19.8M approved to remake Hartford building trio ■ Acting lottery chief quits amid game probe ■ Slot revenues rise at Mohegan Sun, decline at Foxwoods 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 The marijuana products shown above could be used for recreational purposes in Connecticut if lawmakers adopt a Democratic budget legalizing the drug. P H O T O | C O N T R I B U T E D

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