Investment Plan: Bill Lets Manufacturers Put Savings Back Into Firms

8/7/2010

By Angela Carter, Register Staff
Saturday, August 7, 2010

MILFORD - Hugh F. McCann Jr. and a team of area manufacturers are hoping to start a national movement.

McCann is president of Identification Products Corp. of Bridgeport and the impetus behind a federal bill that would allow manufacturers to save up to $250,000 a year in what would be called a manufacturing reinvestment account at community banks.

Under the Manufacturing Reinvestment Act of 2010, companies would be able to invest that savings into capital purchases, infrastructure or job training and work force development-related activities.

For example, if a business owner stashed away the maximum amount annually for five years in an account bearing 5 percent interest, the after-tax balance would be about $1.2 million.

"If we're patient and focused and disciplined over 15 to 20 years, it's going to make a lot of sense. This is a gentle rain, it's not a downpour," McCann said during a tour of Orange Research Inc. in Milford.

McCann and Jamison Scott, marketing manager for Air Handling Systems in Woodbridge, negotiated the content of the bill with the office of U.S. Rep. Rosa L. DeLauro, D-3, who sponsored the legislation and also attended the tour.

"Our company is the typical company that can benefit from this," said Paul Hoffman, chief executive officer of Orange Research and president of the New Haven Manufacturers Association.

James MacDonald, senior vice president and region manager for People's United Bank, said the legislation is a new tool to help businesses grow.

"If businesses don't grow, workers don't prosper and banks don't prosper," he said. "It's like dropping a dime in the water and having a ripple effect."

DeLauro recommended the business leaders start talking directly with members of the House Committee on Ways and Means, the panel now reviewing the bill.

"I am so excited about this. It's been an unbelievable, collaborative effort," DeLauro said. "I'm committed to carrying this piece of legislation. I need your help."

McCann, Hoffman and Jerry Clupper, executive director of the manufacturers association, said they would network with other business owners and industry groups to get the word out about the proposal.

They will need to overcome potential revenue loss, as owners of certain types of companies – such as S corporations and limited liability corporations – will be able to deposit the funds before they are deducted from federal income taxes.

McCann said there is a multiplier effect when manufacturing companies add jobs. "A good job is the best social policy," he said.


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