Job 1 for the Legislature in 2010: JOBS!

Gov. M. Jodi Rell kicked off the 2010 session of the General Assembly with her final state of the state address as Governor of Connecticut. In her speech, she laid out a number of proposals for the legislature to consider that deal with the state’s budget situation, which is estimated to be over $500 million in the red for the current fiscal year. She, along with others in Hartford, have stressed that everything needs to be on the table when coming up with ways to balance the budget.

There is little doubt that Connecticut has taken a huge hit from the downturn in the national economy, which has led to the loss of thousands of jobs here in our state. In her speech, Gov. Rell stated that Connecticut has lost an estimated 94,000 jobs since the recession began in March of 2008. Think about that: In less than two years the state has lost nearly 100,000 jobs, which means the state is not receiving income tax from those individuals, nor are those people spending as much which results in lower sales tax revenue for the state.

Connecticut’s latest unemployment figures show that job losses are continuing in nearly all sectors and regions of the state. According the Connecticut Economic Digest, the state’s unemployment rate, currently at 8.9%, is up 2.3% from last year at the same time. This means more people are in need of unemployment assistance and other state services, which ultimately puts a greater strain on state finances.

That is why I disagree when people say that our current budget deficit is a revenue problem. The state has lost a considerable amount of money, not because people are under taxed but because too many jobs have been lost. By focusing on revenue we lose sight of the fact that Connecticut has a major JOBS problem. Jobs are the answer to this budget situation and the legislature must do everything in its power this year to help create an environment that gives businesses, especially small businesses, the opportunity to grow.

Our first priority must be to get people back to work. There’s a saying that small businesses are the engine that drives job creation. That is why I believe the governor is right in calling for the expansion of the job creation tax credit that would apply to all small businesses with 25 or fewer employees. Under this plan, any limited liability corporation or S corps would be eligible for a $2,500 tax credit against their personal income tax liability for each new job they create for up to three years.

The governor estimates that nearly 4,000 new jobs could be created this year alone under the incentive plan. What’s more, it would be implemented with money that is already budgeted. Is it the answer to all our problems? No. But it is a great first step in giving small businesses (especially those thinking about expanding) the incentive to hire at a time when people are in need of good quality, high paying jobs.

We must do everything in our power as a state legislature to make job creation our number one priority this year. If you have any questions about Gov. Rell’s proposal or about job creation please feel free to contact me at 1-800-842-1421.