CIGNA’s “move” to Connecticut: Smoke and mirrors?
Much like Governor Malloy’s “shared sacrifice”, which has turned out to be the state sharing in your sacrifice … the governor’s “First Five” first catch in Cigna sounds like a “big F’n deal”. But it didn’t take me more than 5 minutes on google to discover its a $50 million dollar tax break for a paper move. Good for Cigna, but is it a good deal for the taxpayer?
Cigna will be getting $50 million dollars in tax credits with a promise for more depending on how many jobs they add and the level of new investment. That works out to be about $250,000 in taxpayer cash per job.
Cigna Corp. and state officials confirmed Tuesday a plan for the health giant to tap state incentives to add at least 200 jobs to Connecticut within two years.
Cigna Chairman and CEO David Cordani joined Gov. Dannel P. Malloy in the announcement in Bloomfield, where the Philadelphia-based insurer has its national claims headquarters.
In addition, Cigna said it will make a significant investment in capital improvements and technology infrastructure to upgrade its facilities in Connecticut.
Cigna is the first company to take advantage of Malloy’s new “First Five” initiative, which will provide a series of economic incentives and tax breaks for the first five companies that add 200 jobs in the state.
But a quick check at Philly.com shows, Cigna had established Connecticut as it’s de facto headquarters a year before Malloy ever took office. (emphasis mine)
Connecticut General Insurance Corp. acquired INA in 1982, merging their businesses and their names into Cigna Corp. The headquarters was established in Philadelphia.
In the late 1990s, when a corporate move was considered, then Mayor W. Wilson Goode moved city offices into the company’s space in the former INA building, now the Phoenix condominiums. That allowed Cigna to move into One Liberty Place, and later expand into Two Liberty Place.
In recent years, Cigna’s employment in the city has declined and the company has never been a big player in health insurance locally, where the market is dominated by Independence Blue Cross and Aetna Inc.
Cigna had long operated as a company with two main corporate offices – one here and one in Bloomfield. Until Cordani took over for H. Edward Hanway in January 2010, the focus had been here.
Cordani and the company’s other top officers now live and work in Connecticut. Hanway lived in the Philadelphia suburbs. The highest-ranking executive to remain here will be John M. Murabito, executive vice president of human resources.
Cigna’s health insurance business, which is run out of Cigna’s Connecticut office, accounts for just under two-thirds of Cigna’s $1.35 billion profits, or $861 million.
Cigna realized it could get a windfall in tax breaks simply by changing its letterhead. Good for them. And good for the 200 people it will be hiring. And maybe it will lead to bigger thing down the road. But with the bulk of its profits coming from its health business, and with it’s health business already in Connecticut you have to wonder if these jobs would be coming here with or without the break.
NOTE: Chris Powell at the JI added an important point this morning on Ray’s show too. It’s a sad day when you have to bribe people to come to Connecticut. And may I add, even sadder when the bribe to come here was more like a bribe … to stay.
As I tweeted yesterday afternoon …
I wonder how many Connecticut CEOs are trying to figure out how thet can get in on the action.
Edited to add (Steve): That’s $50 million of tax incentives paid out over 10 years, or $5 million per year or $25,000 per job, per year.
8 Comments
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$250,000 per job is a bargain isn’t it?? Isn’t a lowered tax incentive to attract a business an admission that current business taxes are too high or do we live in bizarro world?
With thousands of companies pouring out of CA, it is a golden opportunity for states to welcome new businesses.???Make CT a business-friendly environment and it will?revolutionize the economic?conditions.??Just toooooooo simple.? ?
Corporate welfare.
I wonder if the state would be interested in paying me to stay.? If I leave, I will be taking 3 possibly?6 taxpayers with me.
The Hartford Financial Services Group, Inc. is a Delaware Corporation, they should negotiate with the Guv to establish it as a Connecticut Corporation and reap the rewards. ?I’m ready to move south.
PV, In a word, Right. It is a bribe. it was the first thing I thought of when I heard the $50 million, even if it is over 10 years. What happens after 10 years, they move on. UBS got a similar deal from Malloy in Stamford and what did they do after the “bribe” ended well they moved out. Our tax dollars go for a political trick and we Never benefit from the deal. By the time it’s time to pay the taxes without the incentive, they move and take the jobs with them. That being said, Good for Cigna, they are a business and they are looking out for themselves to keep Cigna strong. My Dad worked for Connecticut General and it became? Cigna and I worked out of a New Haven office for a while, but Bloomfield was a paradise I only visited for classes. Happy to see you Cigna and at least you bring jobs for a while.
Looks like political payback to me. On April 15, 2011, 5 large state employers endorsed Malloy’s budget. This was just after he proposed to?raise taxes on taxpayers.? Cigna just got their sweetheart deal. Aetna had a piece of property that was assessed at $462K and the state bought it for? $5 million. It was part of the new busway deal. I thought thats what eminent domain was for.? The other 3 companies that signed onto the tax deal were Travelers, UTC and Hartford Financial Services. I wonder what Santa Malloy will be putting in their stockings. Shared Sacrafice my a##.
CIGNA is the company O’Bama falsely claimed during his campaign and debate over his healthcare system coup balked at paying his mother’s medical bills for treating the cancer that eventually killed her. This was clearly shown to be a lie in a recently released book about his mother. Even though O’Bama’s story is Democratic political mythology, a blue state like Connecticut still should be taking steps to punish CIGNA, not recruit its corporate presence.
Insurance salesmen [and executives apparently], used car salesmen, Governors – all obviously cut from the same cloth: motivated by one tenet: prying as much of your money from your pockets into theirs for as long as they can get over on you. This is a long term deal, don’t we all get it ? That those 200 jobs were coming here anyway is as sure a bet as the fact that tomorrow morning the limos, helicopters and corporate jets will be fueled up ready to take these fat cat insurance execs back and forth to NYC, Philly or wherever else they go to prove their importance on a daily basis. Ever hear of conference calls ? I’m sure their shareholders would appreciate these highly educated people using them, perhaps saving all those millions on all those megalomaniacal perks!? Let’s get this straight. It’s costing you and I 200 million dollars to allay the angst that their wives (and/or husbands) feel when their precious execs can’t get home by 5:00 for supper? Small price to pay for all those multi-million dollar salaries and benefits, I say. Watch closely over the next 4-8 years to see which of the “First Five” provides the…