Supporting Connecticut’s Employers

October 4, 2011

On October 26th, the General Assembly will convene for a long-overdue special session dedicated to addressing issues of unemployment and the state’s weakened economy.

For nearly a year now, Governor Malloy has been touting that Connecticut is open for business, but it is clear the door is not wide open. Furthermore, rather than utilizing the General Assembly’s 2011 general session to implement legislation that supports a business friendly environment, it was centered on a budget that brought in additional state spending, more bureaucratic red tape for Connecticut’s employers and laws such as paid sick days.

The recently passed biennial state budget includes new and increased taxes on each of our state’s businesses and families at a time when Connecticut’s unemployment remains at over 9 percent, and when many have just started to recover from the recession. Take a look at some statistics compiled by the non-partisan National Conference of State Legislatures (NCSL) for 2011. The NCLS study quickly highlights the reasons Connecticut stands as a less competitive place to do business when compared to other states. Among the most egregious and damaging taxes:

  • This year states collectively cut taxes (averaging $2.5 billion) more than they increased them for the first time in ten years, but Connecticut increased taxes by nearly $2 billion.
  • Nine states cut taxes greater than 1% (including our neighbor, New York) while nine states, including Connecticut, enacted net increases of more than 1%.
  • Twenty-one states cut Personal Income Taxes, while only six states, including Connecticut, raised them.
  • Twenty states cut corporate taxes while only eight states, including Connecticut, raised them.
  • Twelve states decreased general sales taxes while seven states, including Connecticut, raised them.
  • Just two states, Connecticut being one, raised taxes on motor fuel.

To better understand the impact of the many new taxes, tax rates and regulations, I have taken time over the past months to listen in to the concerns of Connecticut businesses. The message of both employers and employees is simple and clear – it is time for state government to step out of the way and shrink itself to an affordable level. Until the state reduces burdensome tax liabilities and counterproductive regulations, companies have limited resources to compete for jobs, business or the revenue that keeps their doors open.

Keeping these concerns in mind, I have joined my legislative colleagues in producing prospective legislation for the upcoming jobs session that will benefit current employers as well as attract more business. The first, and most critical, step towards achieving economic gain will be to reduce the financial constraints state government places on businesses and taxpayers. By reducing government spending and lowering state taxes, we can create jobs and establish a pro-growth business climate. In order to lower the increased taxes – which act as an impediment to any long-term goals – we need to cut state spending by further consolidating state agencies; eliminating government waste and inefficiency; and engaging private companies to perform public duties at a lower cost.

The legislature must also implement strategies to actively reduce the tax burden on Connecticut businesses while encouraging job creation. The strategies that I have joined my legislative colleagues in offering include:

  • Expanding tax credits for small businesses that create jobs;
  • Eliminating the Business Entity Tax;
  • Providing tax relief for companies that reinvest profits in inventory, capital improvements, or company expansion;
  • Expanding Angel Investor Tax Credits to spur investments in small businesses and entrepreneurs; and
  • Creating economic development zones around Connecticut’s airports – large and small – including Stratford and Bridgeport.

The second step is to realize and address the fact that state government is excessively involved in regulation and under involved in supporting economic expansion. Getting government out of the way of the private sector calls for review of regulations and the elimination of those that don’t produce meaningful or affordable results. Economic growth can be achieved by simply expediting the state’s permitting process through policies that:

  • Utilize technology to streamline the permitting process and reduce error;
  • Establish a strict 90-day period for state review and action on permit applications; and
  • Prohibit state agencies from deducting administrative expenses from state and federal grants, ensuring all awarded money is used for economic development.

My hope is that we emerge from this October special session with new policies that benefit Connecticut’s economy, create badly needed jobs and restore a sense of confidence again in the state.