The 2019 General Assembly session began this month as Connecticut's economy is showing signs of life.

At the same time, our recent economic progress faces risks from fiscal instability and the probability that state lawmakers will make a strong push this year to adopt costly workplace mandates that could slow business investment and job creation.

To coincide with the session's kickoff, CBIA has released its 2019 Policy Priorities, offering lawmakers clear recommendations for minimizing those risks and creating a business climate that will help the private sector drive growth and put the state on a sustainable fiscal path.

Encouraging Economic Trends

Connecticut saw 1.1% GDP growth in the first quarter of 2018 and 3.1% in the second quarter after contracting 1.1% overall in 2017.

Job growth has also been strong recently, with the private sector adding 23,100 jobs in 2018—the best year in two decades.

Led by the private sector, the upswing has been bolstered by collaboration among leading Connecticut companies and state officials to bring investment in new ventures and workforce development to cities throughout the state.

Trying to tax our way out of our fiscal problems would be business as usual, and that's not an option.
— CBIA's Joe Brennan
CBIA president and CEO Joe Brennan is cautiously optimistic that these encouraging trends can continue, particularly if the business-friendly signals sent by the new governor during the election and transition turn into to business-friendly public policy.

"When you have a new administration willing to look at things differently, a governor with a business background who's bringing private-sector thinking to government, we have a good opportunity to continue the economic progress that's been made in Connecticut," says Brennan.

Business as Usual Not an Option

"We certainly cannot afford do anything to slow down that progress," he adds, "because, despite the positive trends we've seen recently, Connecticut is still behind many of its competitor states in economic and job growth, and the state is facing serious threats that could easily derail our recovery."

Although the budget for the fiscal year that ends this June 30 is projected to show a surplus of $446 million, the most worrisome threat to the state's economic momentum are the enormous deficits forecast for the next budget cycle—just under $1.5 billion in fiscal 2020 and around $2 billion in 2021—and the possibility that state officials will rely on raising or adding taxes to close the gaps.

"Spurring economic growth and building our tax base through policies that encourage business investment and job creation is the only way to generate the sustained revenue needed to stabilize the state's finances over the long term," says Brennan.

"Trying to tax our way out of our fiscal problems would be business as usual in Connecticut, but that's not an option; it will only make our fiscal problems worse by slowing our economy and driving businesses and jobs out of the state."

Doing Things Differently

Another threat to the state's economic and job growth in 2019 is the strong likelihood of legislation imposing new, costly workplace mandates on employers.

These include a $15 hourly minimum wage and paid family and medical leave, both of which surfaced and failed in previous legislative sessions but are now designated as two of five priorities by the 46-member Progressive Caucus in the state House of Representatives.

Their top priority, the minimum wage hike, would likely be phased in, reaching $15 per hour in 2023.

Nevertheless, the nearly 50% increase will harm Connecticut businesses' ability to compete nationally and globally and will result in fewer entry-level or low-skill employment opportunities.

With a new administration and many first-term lawmakers, we have an opportunity to do things differently.
— CBIA's Eric Gjede
That is unless enough lawmakers consider recommendations from the business community and adopt a more innovative approach to the issue.

"This year, with a new administration and many first-term lawmakers, we have an opportunity to do things differently," says CBIA vice president for government affairs Eric Gjede.

"So while we've always seen legislation to increase the minimum wage, this is perhaps a really good opportunity to adopt a training wage that will allow businesses to take a risk on young or unskilled employees.

"A training wage will also keep the state and our municipalities from incurring additional costs to employ teens in many capacities, including staffing summer camps and lifeguarding at town pools. It would also slow the trend in some industries to replace entry-level or low-skill workers with automation."

Make an Impact

A key to continuing the state's economic momentum in 2019, says Brennan, is private sector involvement in the policymaking process.

"If the main goal is to grow our economy, as Gov. Lamont has said, then policymakers need more public-private partnerships and more direct input from the business community," he said.

"If the administration and lawmakers are receptive to forging a closer working relationship with Connecticut's job creators, CBIA and our members are ready to do our part."

Here are just a few ways CBIA makes it easy for you and your employees to have an impact on business-critical policymaking in Hartford:

  • Reach out to lawmakers and develop a relationship. CBIA's Action Center allows you to identify your state lawmakers and contact them about critical legislation affecting your business. Invite them to visit your facility, meet your employees, and tell them what issues are most important to your business.
  • Testify at the state Capitol and speak to the media. No one can tell your story and express your concerns better than you. We'll work with you to make your voice heard and guide you every step of the way. Contact CBIA's Shannon King if you'd like to speak out!
  • Attend a CBIA legislative event. Whether at the Capitol or in your backyard, CBIA coordinates and hosts opportunities for business leaders to meet and engage with legislators.
  • Join a CBIA council. No matter your company's size or industry, there's an exclusive council made up of business leaders like you who want to discuss the most critical issues facing your industry and help guide CBIA's advocacy agenda.