Q & A: Policy aimed at improving manufacturing biz climate [HBJ]

The Hartford Business Journal Q&A sits down with Senate Minority Leader Len Fasano (R-North Haven) to discuss the impact of the 2015 legislative session on manufacturing.

Q: What are the main impacts from the legislative session on Connecticut manufacturers?

A: Minor changes were made to the Subsidized Training and Employment Program (STEP) and Unemployed Armed Forces Member (UAFM) STEP programs.

These programs provide grants to qualifying businesses and manufacturers to help offset training and compensation of new employees and previously unemployed veterans during their first 180 days on the job. These changes revised the “new apprentice” grant, renamed “preapprentices,” by expanding eligibility to individuals age 18 or younger and employed under a written agreement with an apprenticeship program sponsor for a training and employment period of up to 2,000 hours or 24 months.

The STEP program is eligible to businesses and manufacturers with less than 100 employees, while the UAFM STEP program is eligible to businesses of any size.

Q: The legislature has passed several initiatives over the years to help boost manufacturing, like the Manufacturing Reinvestment Accounts (MRAs) that allow for companies to get tax breaks for money they save for improvement projects. Which of these initiatives have met or exceeded expectations, and which ones need to go back to the legislature for retooling?

A: The MRA is similar to an IRA for manufacturers. The MRA program allows up to 100 manufacturers to save money (up to $100,000 annually) for up to a five-year period and then reinvest that money in the business tax free. Fifteen companies participated in the program last year.

Since the program allows the money to be saved for five years, it is difficult to measure the effectiveness in only a year, but I’d like to see those numbers increase. The legislature should require comprehensive reporting by the state on how the money saved is being used so we can assess the program’s effectiveness in the future.

Q: Looking ahead to the 2016 session, what needs to be done for manufacturing in Connecticut?

A: We must keep in place all previously-enacted legislation that helps make Connecticut manufacturers competitive with our border states, including the phase-out of personal property tax on manufacturing machinery and equipment. Connecticut should also reexamine and make a focused effort to eliminate costly mandates on small businesses, avoid adding any new mandates, and require that any future mandates only be added with a two-thirds vote of the Connecticut General Assembly. In addition to relying on the Manufacturing Alliance of Connecticut for guidance on future policies, the state can help manufacturers by:

1) Providing a stable tax and regulatory system so manufacturers can plan for their future and know that savings they create by being efficient can be used to invest and grow their business. This requires getting the state’s fiscal house in order so manufacturers are not burdened by new tax increases every two years. It also requires agencies like the Department of Energy & Environmental Protection to make it easier to convert existing brownfields into useful properties by working with manufacturers willing to expand.
2) Promoting the benefits of a career in manufacturing to middle school and high school students. Manufacturing jobs offer good pay and benefits but require a special skill set that can be obtained in Connecticut’s vocational-technical schools.
3) Making our energy prices more competitive with national prices; expanding on programs that encourage the use of natural gas will give Connecticut manufacturers the ability to produce their products at lower prices.