CONNstruction - Fall 2011 - (Page 13)

newsandviews Bioscience Connecticut Initiative: A Timely Investment By John W. Butts AGC Executive Director When the Connecticut construction industry is struggling collectively to get back on its feet, the Malloy Administration took a decisive step at the end of the previous session of the General Assembly to give the public building sector a turbo shot in the arm by proposing the $864 million Bioscience Connecticut Initiative, which was subsequently approved by the General Assembly and signed into law on July 8. The project, which is expected to create 3,100 jobs annually in 2013 and 2014, calls for a major renovation of the John Dempsey Hospital and the addition of a patient care tower at the University of Connecticut Health Center. It also greatly expands bioscience research and training facilities in Farmington. Of the total cost, $521 million will be in new construction and $318 million will go toward renovations, in addition to $25 million for the UConn Health Initiative. Financing for the project includes $338 million of previously authorized UConn 2000 bonds, $254 million of additional state bonding, $39 million of Health Center capital funds, $30 million in philanthropy, and $203 million through private investment. Over the 2011 to 2018 timeframe, during construction, the initiative is expected to deliver a total of 18,300 jobs, which is particularly important since Connecticut has lost almost 20,000 construction jobs – a third of its total workforce – since 2005. As one would imagine, during a time of huge budget deficits, the proposal was not without controversy. Governor Malloy’s bold move was met with skepticism by most Republicans in the legislature and a cost-conscious public that feared and opposed more borrowing at a time when the Administration and the legislature were trying to plug close to a $2 billion hole in the state budget, and the overall bonding obligation of the state was deemed excessive. Opponents also expressed procedural concerns, deriding the speed by which it was pushed through the General Assembly by the majority Democrats. What seemed to be unappreciated and even disputed by the opponents were the economic development benefits and jobs created by Bioscience Connecticut. An analysis by the Connecticut Center for Economic Analysis (CCEA) argued that the project would pay for itself over time. CCEA’s analysis projected that over the 20 years (2018 to 2037) following completion of construction, the project will yield $823 million in net new tax revenues, as a result of the construction, the subsequent operation of the UConn Health Center, and commercialization of intellectual property, which entirely covers the $592 million in state financing for the project. The health care and research benefits notwithstanding, this project arrives at a time when public building spending in Connecticut is weak. According to McGraw-Hill Construction Research and Analytics, the value of public building construction in Connecticut was down 47 percent in 2010 from 2009, and so far this year that sector is registering a 28 percent drop in 2011 compared to the same time in 2010. With this backdrop, projects like the Bioscience Connecticut Initiative make eminent sense from an economic and jobs creation standpoint. The argument that public funding of construction projects as a countercyclical punch in the arm during economic downturns seems to be an unpopular notion these days. Federal earmarks, deemed wasteful spending, and the fact that the federal economic stimulus package spent only 13 percent of the entire $814 billion package on construction have unfortunately contributed to this stigma. It hasn’t always been this way. At one time, the countercyclical use of public spending was broadly popular. Indeed, one of the most stalwart defenders of the free market, Republican President Calvin Coolidge, was such a proponent. In 1925, in an address before AGC of America, he said, “The idea of utilizing construction, particularly of public works, as a stabilizing factor in the business and employment situation has long been a plan of perfection among students of these problems. If in periods of great business activity the work of construction might be somewhat relaxed; and if in periods of business depression and slack employment those works might be expanded to provide occupation for workers otherwise idle, the result would be a stabilization and equalization which would moderate the alternations of employment and unemployment.” Silent Cal was never known for his eloquence but the idea, from a public policy standpoint, is sound even today. Fortunately, for the Connecticut construction industry, Governor Malloy seems to agree. CONNstruction / Fall 2011 / 13 http://www.ctconstruction.org

Table of Contents for the Digital Edition of CONNstruction - Fall 2011

Riding on Private Investments
Clean Water Fund Helps Create Infrastructure Jobs and Grow the State’s Economy
Public PLAs – Good or Bad?
Bioscience Connecticut Initiative: A Timely Investment
Shovel ready
Aiding economic growth
Wearing two hats
Jammed roadways and full trains
Major transportation initiatives in Connecticut
The Young Contractors Forum Summer Meeting
Associated General Contractors of Connecticut Annual Golf Outing
Connecticut Environmental and Utilities Contractors Association Spring Luncheon Meeting
The Connecticut Road Builders Association Spring Dinner Meeting
Connecticut Ready Mixed Concrete Association Annual Meeting
CTASLA/CCPC Pervious Concrete Workshop
Index to Advertisers/Advertisers.com

CONNstruction - Fall 2011

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