HARTFORD – The Connecticut legislature overwhelmingly approved up to $75 million in tax breaks to Sikorsky to keep production in Connecticut if it wins two major helicopter contracts from the U.S. Army. The measure passed the House by a vote of 130-14 on Wednesday, and passed the Senate 34-1, with State Sen. Rob Sampson, R-Wolcott, the lone vote against.
State Rep. Sean Scanlon, D-Guilford, co-chair of the Finance, Revenue, and Bonding committee, said Stratford-based Sikorsky is trying to win two contracts to build “future vertical lift” helicopters for the Army.
If Sikorsky is awarded both contracts, the state will grant the company up to $75 million in credits towards its sales and use taxes and corporate business taxes. If the company is granted one of the two contracts, the state would award up to $50 million in tax breaks.
Scanlon said that the company warned lawmakers it would cut its Connecticut workforce of about 8,000 employees down to 5,000 employees if it is not able to secure either of the Army contracts.
If it was awarded one contract, Scanlon said that Sikorsky would need to keep 7,375 full-time employees in the state, and 7,500 if it is awarded both, in order to receive the tax breaks.
The agreement would be voided if Sikorsky cannot secure either contract.
Scanlon said the deal requires Sikorsky to meet several conditions to receive the tax breaks:
- Maintain that number of full-time, “W-2” employees, and maintain wages
- Make $70 million to $80 million of capital expenses a year for 10 years, and spend between $300 million and $470 million a year on Connecticut companies that supply Sikorsky
- Keep its headquarters and production for already existing federal contracts in Connecticut
- Produce the new helicopters in Connecticut
- Continue workforce diversity programs
Scanlon claimed that, if Sikorsky was awarded both contracts, it would generate $670 million in net new revenue for the state over 20 years, even with the $75 million tax breaks.
“We don’t want to just maintain 8,000 jobs,” Scanlon said. “We want to grow the future of aerospace in Connecticut. We make subs, we make helicopters, we do amazing things that help our country and protect our country. But without this agreement, and without those two contracts, you will continue to see a gradual reduction in the number of employees who work at Sikorsky.”
The deal had wide support from both Republicans and Democrats, with only 14 representatives voting against the bill.
State Rep. Holly Cheeseman, R-East Lyme, ranking Republican on the Finance, Revenue and Bonding Committee, related the deal to her experience with East Lyme. Cheeseman said that her district felt the impacts when submarine contracts for Electric Boat ended in the 1990s and 2000s – and her district is now seeing the benefits of new submarine contracts as the builder is aggressively hiring to fill new positions.
“It’s not only a good deal for the company, it’s a good deal for Connecticut,” Cheeseman said.