Cooperation Prevails as General Assembly Passes Jobs Bill

Last week, the State Comptroller’s office announced that Connecticut is on track to finish the current fiscal year, which ends on June 30th, with a budget surplus of approximately $105 million. It is the first time in nearly 20 months that anyone in the state has even uttered the word surplus. But what is more significant about the news is that it reflects a change that may indicate the state’s economy is beginning to turn the corner. While this is indeed a good sign, it is certainly no time for the legislature to rest on its laurels of last month’s passage of a bipartisan budget mitigation bill. After all, just about one out of every 10 people in Connecticut is currently out of a job.

When the General Assembly convened in February, the number one priority of the legislature was to find ways to stimulate the state’s economy and create jobs. Three months later the goal remains the same. That is why on May 1st, the Senate convened in a rare Saturday session to take up what is now referred to as the 2010 “Jobs Bill.” The measure incorporates a number of ideas from both Republicans and Democrats intended to fuel job creation

HB 5435, An Act Concerning the Recommendations of the Majority Leaders’ Job Growth Roundtable (which overwhelmingly passed both the House of Representatives and the Senate) will do a number of things, but most important it will increase capital to new and expanding small businesses. We hear it all the time, “small businesses are the engines that drive the economy.” As Ranking Senator of the legislature’s General Law Committee, I have heard testimony from a number of contractors and electricians looking to expand their businesses. But one of the problems these businesses have experienced during the recession is that banks have curtailed their lending practices, thus making it harder for businesses who may want to expand to secure a line of credit.

In an effort to solve that problem, the bill provides up to $500,000 in loans and lines of credit for small businesses and nonprofits so they can acquire the necessary funding allowing them to grow their businesses. These businesses may also be eligible for tax credits and a cap on their insurance premiums for the new jobs they create. The goal here is to give an added incentive for any company that may be contemplating putting more people on their payroll.

Many businesses spend a lot of time and money refurbishing and repairing old equipment. Under this new law, the state is establishing a sales tax exemption for machinery, supplies and fuel used in renewable energy industries. This will allow these companies to purchase new energy efficient products that will help reduce future energy and maintenance costs.

Other highlights of the bill include personal income tax credits for up to $100,000 in angel investments in bioscience, photonics, information technology and green technology businesses. It creates loan reimbursement and training grants for education and careers in green technology, life sciences and health information technology. The bill also establishes a Community-Technical College advisory board to assess training needs of unemployed residents and authorizes up to $150,000 in financing and technical services to businesses developing innovative concepts.

If the economic recovery is underway and can be sustained as many indicators are beginning to show, this bill will provide an even bigger benefit to state businesses and more importantly, the thousands of state residents who are currently out of work.