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September 2008 — Vol. 86, No. 7
Fall legislative races:
Higher stakes, new rules for business
New campaign finance law, other challenges have
changed the playing field for business
By Diane Friend Edwards
Think back over the past year or so: How much did your business pay in sales tax? Property tax? Connecticut income tax? How much did it cost you for workers’ compensation? Unemployment insurance? Employee health benefits? Energy?
Now, look ahead: Do you expect those costs to decrease—or increase?
The reality will depend in good measure on the people state voters elect in November to serve in the General Assembly for the next two years. While decisions in Washington by the new president and Congress will certainly come into play, state legislators’ actions will arguably have the biggest impact on your day-to-day business operations. Every one of the costs just mentioned and many other aspects of running your business are affected by some state law or regulation.
The legislators who enact those laws and approve state regulations—all 187 members of the General Assembly—are up for election this year.
With soaring business costs, projected state deficits, a growing shortage of skilled workers and fierce foreign competition, the stakes in the state elections have never been higher. Neither have the hurdles the business community faces in helping pro-growth candidates get elected.
“This will be the first General Assembly election held under Connecticut’s new campaign finance law, which has changed the playing field for the business community,” notes John Rathgeber, CBIA president and CEO. The law bans or limits some of the ways the business community has supported candidates in the past. It also means “a real change in the candidate selection process,” Rathgeber says.
That law, however, is only one of several new challenges. Others include an increasingly less business-friendly General Assembly and the fact that it’s becoming harder to find unbiased information about legislative candidates in the news media, especially in a presidential election year.
Yet the next General Assembly will deal with many issues affecting the state’s economy.
“Clearly, the state is facing fiscal problems,” says Rathgeber. “Large shortfalls are predicted for the next two years. The elections will determine how the state will deal with its budget—by becoming more efficient and cutting expenses, or by increasing taxes.
“The state’s fiscal problems are not something the federal government will fix for us, given its own budget issues,” he adds.
Contractor, lobbyist contributions banned
The new campaign finance law, enacted in 2006 and amended last year, bans registered lobbyists and state contractors from donating or urging other people to donate money to candidates’ campaigns. The law applies to contractors with a contract of at least $50,000 or multiple contracts totaling $100,000 or more a year.
“Although these restrictions also apply to unions and special-interest groups if they’re registered lobbyists,” says Rathgeber, “the new rules won’t have the same effect on them [as on the business community], because their elections activity often consists mainly of volunteerism: staffing phone banks and conducting get-out-the-vote campaigns.”
Joe Brennan, CBIA senior vice president for public policy, adds, “In the past, businesses generally engaged in the election process by contributing to PACs (political action committees), such as CBIA’s EPIC (which we no longer have), or by placing ads in candidates’ ad books. Those activities are no longer allowed.
“Through EPIC, CBIA used to contribute money to the campaigns of candidates we endorsed,” Brennan explains. “Now, we can’t do that. We can make endorsements and let members know about them, and we can put press releases about our endorsements on our Web site.”
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