Anti-sourcing bill returns; Expansion of job-creation tax credit proposed

(Feb. 15, 2008) Two legislative committees this week took opposing paths to economic development in Connecticut – the Labor Committee taking a step back and the Commerce Committee offering a way forward.

Anti-sourcing bill
Introduced in the Labor Committee this week was a bill to create a state task force that would monitor services performed under state contracts for their use of Connecticut and U.S. businesses.

HB-5112 would discourage companies in the state from participating in the global economy and sourcing some of their work to locations where it will help them be more competitive and effective.

Under the proposal, businesses seeking a state contract would have to disclose whether services under the contract and any subcontract would be performed outside the state or outside the country. Preference would be given to work performed solely in Connecticut.

Similar to a bill in last year’s session, HB-5112 is not an outright ban on outsourcing under state contracts, but ignores the fact that businesses are operating in a global economy.

Instead of competing just with businesses in the next town or state, companies now must be competitive throughout the world. Companies often source work where they can operate most efficiently and effectively — an integral part of doing business today.

Trying to keep Connecticut companies from doing this would cut off their ability to compete and succeed in global markets. In a sense, bills such as HB-5112 fence Connecticut in, making it a less desirable place to do business; hurting employers, employees and communities alike.

CBIA is asking lawmakers to reject anti-sourcing legislation and instead work to promote Connecticut’s position in a global economy.

Job creation tax credit
A bill that would do much to improve Connecticut’s business climate, SB-97, was introduced in the Commerce Committee. It would expand the state’s job-creation tax credit to small businesses, including limited liability companies, limited liability partnerships, limited partnerships and S corporations.

The credit also would extend to businesses that create at least one new net job, remove the annual $10 million cap, and make it easier for businesses to claim the tax credit.

CBIA supports this expansion of the job creation tax credit as a way to foster job and business growth in Connecticut.

For more information, contact CBIA’s Jesmin Basanti at 860-244-1929 or jesmin.basanti@cbia.com.