State’s Fiscal Situation Will Dominate 2017 Session
Budget deficits, taxes, and government spending will dominate the 2017 Connecticut legislative session that starts Jan. 4 as lawmakers grapple with the state’s precarious finances.
CBIA and its members will monitor the budget process and fight proposals—including tax hikes—that hurt Connecticut’s economy.
Connecticut continues to lag behind most of New England in recovering jobs lost in the recession, making job growth a critical priority.
Below is a closer look at just a few of the issues CBIA will follow during the 2017 legislative session.
Spending Reform. During the last legislative session, lawmakers adopted some reform measures.
Those reforms must be expanded, developing long-term, sustainable spending practices that address the state’s fiscal stability.
We expect to see a number of initiatives focusing on long-term support services, one of a number of areas that can realize substantial savings and greater efficiency.
State employee benefits, including pensions and retiree healthcare, will also be at the forefront.
Lawmakers must address benefit reform, including ending the use of overtime in pension calculations.
Taxes. Connecticut’s economy cannot endure additional taxes or tax hikes.
While lawmakers must resolve billion dollar-plus deficits for the 2018 and 2019 fiscal years, tax increases are not the answer.
Since 2011, Connecticut has seen the two biggest tax hikes in its history.
We need long term structural reforms that will bring government spending under control, create stability, and attract much needed investment.
Energy & Environment
Connecticut must promote cost-effective, reliable, in-state energy production and transmission from diverse fuel sources, and regionalize sources of low- and zero-emission electricity.
Lawmakers should reject greenhouse gas-reduction proposals that place greater responsibility on Connecticut than on neighboring states.
We also need to find a means to transport more natural gas to Connecticut and the entire northeast to take advantage of greater availability and cheaper prices for natural gas.
We will call for eliminating regulations that cost businesses and burden regulators without demonstrating any environmental benefit.
We also want to ensure that state environmental regulations mesh with federal rules and do not force Connecticut businesses and industries to go beyond what federal laws require.
Several factors will bring change to the leadership of the state legislature’s Insurance and Real Estate Committee, which deals with rising healthcare costs.
Some healthcare bills appeal to emotion, at times prompting legislators to discount the facts needed to make an informed decision.
CBIA is supporting a new way for lawmakers to adopt health-benefit mandates.
It will include using cost-benefit analyses, which will result in better decisions.
Labor & Employment
Unemployment Compensation Reform. CBIA will urge legislators to adopt several reforms to bring solvency to the state’s unemployment compensation trust fund.
The Connecticut Department of Labor will likely call for increased unemployment taxes on employers.
However, Connecticut businesses pay more unemployment taxes than most neighboring states while paying out some of the most generous benefits in the country.
Adopting the same reforms as other states will ensure we can continue providing benefits for future workers without more job-killing taxes.
Family Medical Leave. Both major presidential candidates urged the adoption of a paid federal Family Medical Leave Act.
Connecticut should avoid implementing its own costly mandate until we see what will be required under federal law.
Minimum Wage. Despite four straight years of minimum wage increases, advocates will be pushing for a $15 hourly wage.
With Connecticut losing 11,400 jobs in just the last six months, legislators should be focused on helping businesses create jobs, not making job creation more expensive.
Workers Compensation. CBIA will closely watch for any proposed changes that will make the system more costly for employers.
Specifically, we will be fighting any proposals that will alter the workers compensation exclusive remedy, as well as any benefit-increase proposals.
In addition, we will focus on new ideas to help streamline the process to make it more efficient for all stakeholders.
CBIA will propose allowing pass-through entities to use the manufacturing-apprenticeship tax credit.
Current law permits these primarily small and midsize employers to earn this credit, but they are not permitted to claim it against their personal income taxes, which is how these entities pay their business income tax.
A bill proposed last session would have allowed these employers to apply the credit directly against their personal income tax.
That bill passed both the state Senate and House, but was later vetoed.
It’s critical Connecticut set aside funds for its many transportation needs.
The first step must involve legislators not using our special transportation fund for general fund expenditures.
We must use transportation dollars exclusively for projects that help relieve highway congestion, keep our roads safe, and support the state’s economy.
Connecticut’s talented workforce still attracts employers. We must continue supporting career pipelines and work with employers and educators to ensure the next generation has the skills they need to succeed.
For example, manufacturing programs at technical high schools are graduating students who, thanks to their training, go straight into the workforce.
We must support these types of programs. Furthermore, we must work with guidance counselors, teachers, and parents to let students know of the many career possibilities.
Timing is key, as these skills-gap issues must be addressed immediately.
We need to identify innovative ways to close the education achievement gap and ensure Connecticut has the skilled workforce it needs.
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