Connecticut Tourism: A $27 Million Investment

Posted on June 20, 2012. Filed under: Uncategorized | Tags: , , , |

If you had the ability to direct the expenditure of $27 million of state funds, where would you apply the money?

To the repair of our crumbling bridges and roads, perhaps? Or to our underfunded systems of public education and health?

If you’d rather spend the cash on a flashy advertising campaign, you’re in luck! Our State Office of Tourism has just launched a campaign that features five videos, all of which are now available for viewing on YouTube.

The tag line? Still Revolutionary, a phrase that purportedly refers to the state’s “revolutionary spirit that still remains today.”

Oddly enough, the videos do not appear to mention Nathan Hale, Connecticut’s most illustrious revolutionary.

Hale, a Yale alumnus and Connecticut’s official State Hero, was executed by the British for spying during the American Revolution.

According to legend, when given the choice of betraying his fellow patriots or surrendering his life, Hale retorted “I only regret that I have but one life to lose for my country.” The British Army proceeded accordingly.

Nevertheless, neither Hale’s homestead in Coventry, Connecticut, nor his famous statue on Yale University’s historic Old Campus, appear in the videos at all.

The advertisements do, however, feature baby boomers who sip wine in vineyards and adorable tykes who gaze at a beluga whale through an aquarium tank.

These images, though hardly “revolutionary,” are quite striking. Nevertheless, is the State prepared to measure whether this $27 million expenditure will achieve a satisfactory return on the taxpayer’s investment?

Contributed by Michael Kraten, PhD, CPA, Accounting Professor at Providence College and President of Enterprise Mgt. Corp.

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The Value of A Tax Exemption

Posted on April 12, 2012. Filed under: Uncategorized | Tags: , , , |

Why are nonprofit organizations permitted to file for tax exemption status?

According to the Internal Revenue Code, such exemptions provide value to society because the organizations are dedicated to charitable, religious, educational, or other purposes that benefit American citizens. But do all of the activities of tax exempt organizations actually benefit our society?

For instance, consider Yale University. Last week, its faculty passed a resolution that “expressed concern” about its new Asian venture with the National University of Singapore. The project certainly benefits Singaporean citizens, but does it benefit American citizens as well?

Although the venture will create Yale’s first college campus outside of New Haven, it isn’t the University’s first major development initiative outside of the Elm City. A few years ago, Yale purchased a 136-acre campus in West Haven and Orange from Bayer Pharmaceuticals to serve as a science and medical center.

The purchase undoubtedly strengthened Yale’s scientific capabilities. However, it pulled an extremely valuable piece of real estate off of the towns’ real estate tax rolls. Did that transaction benefit American citizens?

Likewise, consider Governor Malloy’s recent decision to strengthen the University of Connecticut by enticing Jackson Labs to relocate from Maine and help UConn develop a nanotechnology center. Our own blog questioned the value of that deal at a time of extreme government austerity.

No one doubts that our academic institutions contribute significantly to our state’s economy. But should they continue to enjoy tax exemption status when they engage in activities with questionable benefits?

Contributed by Michael Kraten, PhD, CPA, Accounting Professor at Providence College and President of Enterprise Mgt. Corp.

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Return of the Whaling Industry!

Posted on February 8, 2012. Filed under: Uncategorized | Tags: , , |

Have you noticed something unusual about the economy lately? Apparently, whales and whalers are making a comeback!

Whales and whalers?

No, New London is not resuming its historical role as a center of the whaling industry, though the sperm whale does maintain its designation as Connecticut’s official state animal. Today’s whales and whalers are fans of our professional hockey teams.

Many citizens of the Nutmeg State pine for the days of the Hartford Whalers, who played in the National Hockey League (NHL) until moving to North Carolina in 1997. As recently as last month, Governor Malloy was asked whether he could persuade the NHL to place a new team in the Capitol City.

Some Nutmeggers are even aware that the NHL’s New York Rangers franchise, which plays in Hartford today, is named the Connecticut Whale in honor of the state’s seafaring heritage. Many commentators have speculated that the name was also chosen to catch the attention of hockey fans who followed the original NHL franchise.

But few are aware that a new team has now begun its second season in the fledgling Federal Hockey League! The Danbury Whalers are battling foes from Brooklyn, Cape Cod, The 1,000 Islands, and four other regions for the coveted Commissioner’s Cup.

Unlike John Rowland, who focused heavily on luring the football Patriots to Hartford, Governor Malloy does not appear to be eager to invest government funds in professional sports. But considering his willingness to spend millions on projects like nanotechnology centers, might he consider allocating a few economic development dollars for our whales and whalers too?

Contributed by Michael Kraten, PhD, CPA, Accounting Professor at Providence College and President of Enterprise Mgt. Corp.

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A Holiday Gift For Commuters!

Posted on December 15, 2011. Filed under: Uncategorized | Tags: , , , |

We all enjoy receiving holiday gifts, don’t we?

Connecticut commuters, in particular, have been blessed with an eagerly anticipated gift this holiday season. After years of planning, financing, and building activities, the State Department of Transportation finally opened the new Fairfield Metro train station on the New Haven line last week!

Although the total cost of the project was several million dollars over budget, the station is nevertheless expected to ease overcrowding at other stations and attract commuters away from Interstate 95. And it will soon be joined by another new train station in West Haven, increasing the number of stations between Fairfield Center and New Haven from three to five.

Connecticut, of course, ranks near the bottom of virtually every study in highway congestion. A recent Transportation Safety Board study “conservatively” estimated that congestion costs the Nutmeg State over $670 million annually, and last year’s 19th Annual Highway Report of the Reason Foundation assigned Connecticut a lowly rank of 41st out of the 50 states in cost-effective highway systems.

No one expects one or two new Metro-North rail stations to solve these problems immediately. Nevertheless, in an era that is plagued by plummeting public confidence in government’s ability to address social challenges, the Fairfield Metro station opening is welcome news indeed.

Contributed by Michael Kraten, PhD, CPA, Accounting Professor at Providence College and President of Enterprise Mgt. Corp.

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