HARTFORD, CONN. - The Connecticut Plastics Council wants state lawmakers to cut power rates for the plastics industry 20 percent and eliminate the industry's liability for its share of the state's gross receipts tax. The 18-member council fired its opening legislative salvo with a Jan. 31 seminar and mini-trade show in Hartford. The council hopes to encourage Connecticut to make the plastics industry the first of six proposed business ``clusters,'' whose members would qualify for favorable tax and power rate treatment and participate in special state-backed training programs by virtue of their close relationship with plastics technology and manufacturing.
Arthur M. Diedrick, Connecticut Development Commission chairman, outlined the proposal to make plastics a demonstration of the cluster concept. Gov. John Rowland ``wants to work within high-tech and apprenticeship programs. We want to focus on businesses we have already in the state,'' Diedrick said.
The other five industry clusters, not directly identified, could be in the aerospace or manufacturing sectors, he said.
The event drew 300 people, mostly processors. Also attending were 18 state legislators, Rowland, Lt. Gov. Jodi Rell, and Society of the Plastics Industry Inc. President Larry Thomas.
Murray A. Gerber, chairman of the Connecticut Plastics Council, said a 2 cent-per-kilowatt-hour reduction in rates to firms in the plastics cluster could amount to a 20 percent rate reduction for them. It also would cut the difference between rates in Connecticut and low-cost states by 50 percent. Gerber declined to name low-cost states, but said none are in the Northeast.
According to Gerber, power rates in Connecticut range ashigh as 9.75 cents per kilowatt hour, about 85 percent higher than the average rate of 5.2 cents for 92 U.S. electric utility companies in a Dow Theory Forecasts survey.
Plastics industry profit margins are so tight that even a reduction of 1 cent per kilowatt hour would improve profitability for most plastics-related industries by 50 percent, he said.
Gerber said the council would also like the state's 350 plastics manufacturers, molders, compounders, raw materials makers and captive plastics processors to be exempted from the state's 2 percent gross receipts tax.
Gerber and Thomas emphasized the high return the state stands to gain by providing tax breaks. Both claimed the state's plastics industries sell $2 billion in goods a year and employ at least 19,000.
``With a little boost,'' said Gerber, ``we could see the creation of 10,000 jobs in five years'' in the state.
Processors snared one victory for the plastics industry in 1995 with the passage of legislation that provided them as much as $4,800 off their corporate tax bills for hiring apprentices from a state-backed program.
Charles W. Bentley, president of Colt's Plastics Co. Inc. in Dayville, said the plastics industry ``depends on [the proposed tax break's] passage for our future competitiveness.''
Bentley, a member of the council and an SPI board member, said he hoped lawmakers remembered plastics' contribution to the state.
Bentley said his firm was a division of the Colt Firearms Co. before branching off in 1957.
Tax break legislation has no formal sponsor in either the Republican House or the Democratic Senate. Measures could be dropped in the legislative hopper anytime after the Legislature goes into session Feb. 7.
Gerber, president of Prototype & Plastics Mold Co. Inc., of Middletown, Conn., noted he has witnessed no opposition to the tax break idea.
One legislator present for the three-hour event, State Rep. Sonia Googins, R-Glastonbury, said ``the evidence is there'' to show that a 2-cent reduction in utility rates ``is an investment.''
Plastics, she said, could serve as a demonstration for other industries grouped into clusters for tax relief.
``You can find sillier things we've put money into in the past,'' she said.
Googins serves on both the House Commerce and Appropriations committees, both points where tax break legislation is likely to hear debate.
Northeast Utilities, a Berlin, Conn.-based consortium of five power companies that provide 85 percent of Connecticut's electric power ``has demonstrated their willingness to make a price that is right. What I haven't heard yet is what [Northeast Utilities has] to say as to why they can't'' provide a legislatively mandated rate cut, Googins said.
Once a region critical to the defense industry, Connecticut has been hit by layoffs at the Pentagon contractors' operations and at major large employers, such as the insurance industry.
``We're reaching out to the graduates of downsizing,'' said Rowland, Employees caught in the swirl of layoffs ``are the people who should be working for you.''