Governor Dannel P. Malloy’s budget proposal to trim state expenses and cut personnel costs provides a good foundation for the General Assembly to build upon.
But, it’s absolutely critical that the administration achieves its proposed $1 billion per year reduction in state employee compensation costs. It’s also imperative that the administration works with the state legislature to identify additional spending cuts to reduce the size and scope of the proposed $1.5 billion tax increase on residents and businesses in our state.
“Solving our state’s fiscal crisis is essential to our economic recovery and restoring business confidence in Connecticut,” said John R. Rathgeber, CBIA’s president and CEO (seen above talking with the AP's Steve Singer after the governor's budget address). “But, it must be done in a way that that makes our state more attractive to private-sector investments and job creation.”
CBIA urges the legislature to seriously consider recommendations being made in our neighboring states to reduce their budgets and limit tax increases. In addition, The Connecticut Regional Institute for the 21st Century identified cost-cutting options impacting state employee pension expenses, long-term care and prisons.
“With Connecticut employers already facing more than a $70 million hike in unemployment compensation taxes, it’s essential that the administration and the legislature minimize the need for higher taxes,” said Rathgeber.
In addition to extending the corporate income tax surcharge, the proposed $1.5 billion tax proposal impacts business through increases in the personal income tax (paid by small businesses and S corporations), the sales tax, a “throw-back” rule that hits in-state manufacturers, the premium tax on insurers, and a new tax on electricity generation.
“Nothing has undermined business confidence in Connecticut more than our budget crisis and the state’s massive unfunded liabilities,” said Rathgeber. “The Governor’s commitment to becoming a better partner to the business community is very encouraging, but we urge his administration to continue to work with the legislature to make state government leaner and more affordable.”