Protecting Connecticut’s Economic Future

As the Connecticut General Assembly begins its 2008 legislative session, America is facing an economic slowdown. While things in Connecticut are better than in many states, we must act now to restructure our government policies in a way that encourages economic growth through job creation.

Connecticut residents, families and businesses — already saddled with some of the highest taxes in the country, transportation challenges and burdensome regulations — are now also coping with the rising costs of energy and health care. As a result, business growth is slowing, unemployment rates are increasing, inflation is outpacing wages, and the average Connecticut worker at every income level earned less in 2006 than in 2002.

While national and global factors have contributed to Connecticut’s economic stagnation, it is also the result of excessive government spending and of a tax and regulatory environment which stifles entrepreneurship. This is not the time to embark on ambitious new government spending programs. Instead, the legislature must put its fiscal house in order, help mitigate the effects of a potential recession, maintain state services, and ensure our state’s long-term economic health.

In 2007, the General Assembly took a step in that direction when it provided tax credits to Connecticut corporations that create ten or more new jobs in a year. Under the new law, some corporations receive a tax credit equal to 60% of each new worker’s state withholding tax. In this legislative session, we will work to extend this benefit to small businesses and provide the credit for every new job created. This will encourage Connecticut businesses to expand, creating new jobs and a larger tax base. A small investment of $10 million in the first year of this program will return an estimated $20 million– $30 million in state revenue in its second year.

We can also mitigate the effects of a potential recession and stimulate the economy through targeted relief in the form of tax credits for home heating assistance and out-of-pocket medical expenses.

In addition to expanding the Jobs Growth Tax Credit, Senate Republicans have proposed eliminating counterproductive regulations; repealing the business entity tax; and by using the “Hollywood East” tax incentive as model to attract “next generation” industries to Connecticut. By retaining small businesses and recruiting emerging industries like nanotechnology, environmental remediation, life science devices, and alternative energy, we will provide job security and employment options to thousands of middle class families for years to come.

A thriving economy is also dependent on how state government addresses our transportation, energy, housing and health care challenges.

I was encouraged Wednesday by Governor Rell’s proposal to break up the Department of Transportation (DOT) into two distinct agencies. These smaller, more focused departments will be better equipped to provide innovative solutions to the vast economic, environmental and public safety problems created by transportation gridlock in Connecticut.

Traffic congestion, particularly in southwestern Connecticut, negatively impacts our quality of life and is a barrier to economic growth in our state. I believe the Governor’s proposal will result in a more efficient approach to our transportation challenges and a renewed commitment to alternate modes of moving people and goods by air, sea and rail.

Finally, in order for state government to achieve any of its goals, it is vital we restore trust and public confidence in our elected officials. Ethics reform must be a top priority for the 2008 General Assembly, and I will work with Senate President Pro Tempore Williams to create a Bipartisan Standing Committee on Ethics, give judges the power to revoke or reduce the pensions of corrupt public officials and state employees, establish new restrictions for state officials who lobby legislators, require ethics training for state elected officials, establish a criminal penalty for elected officials who fail to report a bribe, and prohibit legislators from holding a second paid elected office.

Connecticut is a wonderful place to live and work, but our success depends on our ability to hold the line against excessive government spending, and to institute long-term structural changes to our tax code that will strengthen our economy by attracting and retaining businesses and creating new jobs.