OKs manufacture tax reform:
Commerce Committee scores for economy, business climate
(March 17, 2006) Taking two big steps toward improving Connecticut’s business climate, the legislature’s Commerce Committee this week approved a major business tax reform and rejected a significant anti-business measure.
The committee gave its OK to SB-1, a substantial bill that, among other things, exempts manufacturing machinery and equipment from local property taxes — one of the top priorities of policy makers and the business community alike this year.
The property tax exemption was previously contained in SB-348, which was folded into SB-1.
The committee also rejected HB-5032, which effectively was a gag order on employers, requiring companies receiving state assistance to sign a neutrality agreement in union organizing campaigns that would deny employees the benefit of a full and open debate prior to a union election.
Boost for manufacturers
Removing the state’s property tax on machinery and equipment will help Connecticut manufacturers compete. Most manufacturers, particularly small and midsize ones, say they can’t adequately compete unless they are able to invest in the best, most current technology to make them more productive than their competitors.
What’s more, Massachusetts, Rhode Island, New York, New Jersey and Pennsylvania don’t impose the tax.
Connecticut’s tax discourages companies here from purchasing new equipment that can help them increase productivity – and jobs.
While the legislature approved a property tax exemption for machinery and equipment in 1990, it applies only to the first five years after acquisition of the property. Competitive pressures on manufacturers have greatly increased since 1990, and more must be done to safeguard manufacturing in the state.
SB-1 also contains other proposals to boost the state’s economy, including the reworking of state economic outreach programs to increase their effectiveness. The bill creates an Office of Commerce in the governor’s office, to be headed by a secretary of commerce; establishes a blue-ribbon commission to assess Connecticut’s economic competitiveness and develop plans to improve the state’s efforts, and restructures the Department of Economic and Community Development.
CBIA applauds the committee for correctly viewing what will help the state regain economic strength — promoting economy-building proposals and turning back a measure that would have hurt Connecticut’s employers.
Promoting fairness
HB-5032 was a Labor Committee proposal that would have allowed promoters and supporters of organized labor to express their views while barring employers from expressing any views about unionization and how it might affect their company. In addition, the bill would have denied employees their right to vote in a secret ballot election supervised by the National Labor Relations Board.
Despite the Labor Committee’s approval, the bill was pre-empted by federal law, and federal courts in California, Wisconsin and New York have struck down similar measures.
More to do
Connecticut needs more legislation that will encourage investment and job growth in the state. The Commerce Committee has shown how; now it is up to the rest of the legislature to follow suit.
For more information, contact CBIA’s Bonnie Stewart at 860-244-1900 or stewartb@cbia.com.
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