2026 Legislative Session: One Step Forward, Three Steps Back
The 2026 General Assembly session, billed by policymakers as an “affordability session,” ended with limited progress and key decisions that will drive costs even higher.
“At the start of the session, policymakers across the board cited affordability as a key issue,” CBIA president and CEO Chris DiPentima said.
“Unfortunately, our state lawmakers did not do nearly enough to address the rising costs challenging so many Connecticut families and employers.
“There were some positive policy wins, but there were too many decisions that will make Connecticut more expensive to live, work, and do business—jeopardizing the state’s long-term economic competitiveness.
“Time and again this session, it was a case of one step forward, three steps back.”
DiPentima said that while budget adjustments offered relief to cities and towns, they rely heavily on weakening the state’s fiscal guardrails, one-time revenue measures, and off-budget transfers.
“Rather than building on the stability created by the fiscal guardrails over the past eight years, policymakers leaned heavily on budget gimmicks and diversions,” he said.
Pro‑Growth Policies
CBIA vice president of public policy Chris Davis highlighted several meaningful pro-growth policies approved by lawmakers.
The budget bill expanded the state’s R&D tax credit to pass-through entities, giving smaller and mid-sized firms access to a tool that was only available to large companies.
“This is a critical measure to help Connecticut’s small businesses, innovators and entrepreneurs remain competitive,” said Davis.
“This is exactly the kind of pro-growth solution we need more of from our policymakers.”
“While we welcome these policy wins, they are outweighed by decisions that increase costs.”
CBIA’s Chris Davis
The legislature also advanced important new permitting reforms that will shorten review times and make it easier to move projects forward.
A newly created small business concierge program will also help employers navigate the state’s complex regulatory system.
“Businesses have been clear that delays and uncertainty in permitting are barriers to investment,” said Davis.
“These reforms move the state in the right direction on efficiency and predictability.
“While we welcome these policy wins, they are outweighed by decisions that increase costs and make it harder to operate in Connecticut.”
Undermining Economic Momentum
Davis warned of the negative consequences that will result from the way policymakers circumvented the fiscal guardrails—key to the state’s new-found fiscal stability and economic growth.
“Those changes really set us up for potential fiscal instability in the out years,” he said,
“Essentially, lawmakers weakened our future long-term fiscal stability so they could spend more now.”
He added that the budget adjustments also decouple Connecticut from federal policy that allows businesses to immediately write off manufacturing investments.
“Connecticut was in a position to establish itself as the best state in the region for expanding manufacturing,” he said.
“Instead, this is another case of lawmakers failing to capitalize on an opportunity to gain a competitive edge over neighboring states.”
Healthcare Failure
DiPentima said that despite healthcare and energy costs being front-of-mind for families and employers, the General Assembly failed to deliver meaningful, broad-based relief.
No significant progress was made on reducing the cost of energy, either in the short or long term.
Action on healthcare affordability fell far short of what is needed, as costs continue to soar—particularly for small businesses and their employees.
“Unfortunately, our state lawmakers did not meet the moment,” DiPentima said.
Policymakers approved a new small business health coverage credit of up to $1,000 per covered employee for employers using Individual Coverage Health Reimbursement Arrangements.
While the credit will help the smallest of employers, hundreds of thousands of other small business employees were left in the cold.
“Association Health Plans represent a concrete, proven solution to one of the biggest factors driving Connecticut’s affordability crisis,” DiPentima said.
“But instead of embracing a meaningful solution, some legislators chose politics driven by ideology and misinformation, leaving small employers and their workers to struggle with skyrocketing healthcare costs.”
Workforce, Childcare: Mixed Results
DiPentima said new investments in childcare and workforce support reflect an important recognition of real challenges but also raise concerns about long-term sustainability.
“Investing in childcare and our future workforce is an important goal,” he said.
“But doing so without fully addressing the long-term fiscal impacts is short-sighted and leaves the state vulnerable to future deficits.”
“Connecticut cannot grow if we do not have the workers employers need.”
CBIA’s Chris DiPentima
DiPentima emphasized that workforce remains Connecticut’s greatest competitive asset—one that is increasingly at risk.
“Connecticut cannot grow if we do not have the workers employers need,” he said. “This session did not do enough to strengthen that pipeline.
“Some good ideas advanced, but many more stalled, were watered down, or were overshadowed by policies that increase the cost of employing people here.”
Economic Self-Sabotage
DiPentima said several major legislative decisions this session amount to self‑inflicted policy failures, weakening Connecticut’s competitiveness and job growth.
“The approval of the ‘emergency’ Warehouse Workers Protection Act sends exactly the wrong signal to one of Connecticut’s fastest-growing industries,” DiPentima said.
“At a time when we should be supporting and expanding that growth, this bill does the opposite, creating a chilling effect on investment, hiring, and growth.”
Davis added that the way many bills advanced through the legislature compounded those concerns.
“This year, the legislative process increasingly prioritized politics over policy,” Davis said.
“Too many bills became large, complex packages filled with provisions that couldn’t stand on their own—forcing up-or-down votes on issues with long-term economic consequences.”
Davis pointed to HB 5003—a sweeping, multifaceted package laden with new mandates —as a prime example.
“HB 5003 is the clearest example this session of one step forward, three steps back,” he said.
“It bundles a few positive workforce development initiatives with a series of costly new compliance, liability, and administrative burdens.
“That combination makes it harder and more expensive to do business in Connecticut.”
Workforce Challenges
DiPentima warned that these policy choices come as Connecticut faces stagnant job growth, rising unemployment, and a shrinking labor force.
The state’s labor force has declined by almost 21,000 people over the past year, underscoring ongoing concerns about long-term workforce growth.
“Connecticut’s greatest asset has always been our world-class workforce,” DiPentima said.
“This session shows that policymakers haven’t fully learned the hard-earned lessons of the past.”
DiPentima
“If our workforce continues to shrink, it will become increasingly difficult for businesses to invest, grow, and stay in Connecticut.”
DiPentima said many of the state’s long-term challenges stem from decisions made over decades.
“This session shows that policymakers haven’t fully learned the hard-earned lessons of the past,” he said.
“By prioritizing politics and short-term policies over long-term solutions, lawmakers ignored an opportunity to lay the foundation for sustained economic growth.”
No Long-Term Vision
DiPentima said the session ultimately reflected a lack of clear long-term vision for Connecticut’s economic future.
“This was not simply a session of missed opportunities,” he said. “When policymakers ignore proven solutions and double down on costly mandates, that’s economic self‑sabotage.
“In the coming months, legislators must own the economic consequences of their decisions.
“Our legislative scorecard will give employers and residents a clear picture of who is working to grow Connecticut’s economy—and who is not.”
DiPentima said CBIA remains committed to working with policymakers to advance solutions.
“Connecticut has enormous potential—we have world-class employers, a skilled workforce, and key strategic advantages,” he said.
“More than ever, Connecticut needs small business champions and a clear vision that prioritizes long-term growth, affordability, and opportunity over short-term politics.
“Until that happens, sessions like this will continue to fall short of what Connecticut families and employers deserve.”
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CBIA IS FIGHTING TO MAKE CONNECTICUT A TOP STATE FOR BUSINESS, JOBS, AND ECONOMIC GROWTH. A BETTER BUSINESS CLIMATE MEANS A BRIGHTER FUTURE FOR EVERYONE.