Economy taking toll on state budget

(April 28, 2008) State leaders are negotiating revisions to the fiscal year 2009 budget amid new estimates that this year’s projected state surplus has all but disappeared. However, lawmakers continue to consider several proposals that could increase the cost of state government or increase business costs in Connecticut.

Clearly, it’s time for fiscal caution. Initial state budget surplus estimates of $150 million to $250 million are now at $15.7 million. And the economy continues to show signs of weakness.

Connecticut already has some of the highest business costs in the United States and our business-tax climate is ranked 12th worst in the nation.

During the session, many lawmakers talked about the dual needs to be cautious on state spending and to “do no harm” to Connecticut’s economy. With less than two weeks left in the session, both approaches are critically important.

Lawmakers approved a two-year state budget last year. It is not necessary to look for ways to adjust it, especially as the state’s fiscal cushion disappears.

Proposals to impose a paid sick leave mandate and roll back workers’ compensation system reforms would substantially increase business costs. A health care purchasing pool for small businesses and municipalities, as well as a proposals creating a state retirement plan for small businesses, are two proposals that would duplicate services already provided in the private sector and add state costs.

Instead, it really is time to do no harm and avoid any measures that would increase state costs and make it harder for businesses to compete, succeed and create jobs.

For more information, contact CBIA’s Bonnie Stewart at 860-244-1925 or bonnie.stewart@cbia.com.