Finance Committee Holds First Public Hearing

The legislature’s Finance Committee held public hearings Monday and Friday this week on an assortment of business-related proposals. Friday’s hearing was too late for a report in this edition, but here is a look at bills discussed on Monday.

SB 356 expands the Neighborhood Assistance Act tax credit to more small businesses—S Corps, limited liability partnerships and limited partnerships– which is likely to encourage more corporate giving and community investment among all businesses.

HB 5424 allows certain municipalities to delay their property revaluation.  Postponing revaluation may yield short-term gains—cities and towns can avoid the immediate cost—but could lead to dramatic increases in property values down the road. More frequent revaluations allow municipalities to better keep pace with fluctuations in the value of the property.

Unfortunately, some Connecticut towns are actually planning for a delay in revaluation instead of planning for the revaluation to take place.

Delays ignore the prudent planning and importance of the staggered, statewide calendar for municipal revaluations and reduce the accuracy and fairness of the revaluations themselves.

HB 5426 changes the current review and reporting requirements for state business tax credit and abatement programs. 

The Finance Committee added the requirement that the Department of Community and Economic Development compare the tax credit programs offered in Connecticut to those offered in other states, and how they impact the competitiveness of businesses.

Such comparisons are key factors weighed by business-site locators when they determine the best location for their clients.

One recommended improvement to the bill, however, concerns Enterprise Zones. If a decision is made to eliminate an enterprise zone, any business or entrepreneur who invested in the zone and was given a tax credit should be able to continue receiving the credit.

This is extremely important because consistency and predictability are good tax policy and business confidence-boosters. Those who relied on a classification, committed to invest in a community, and were granted an enterprise zone tax credit, should be able to depend on it staying with them for full term of the credit.

CBIA will have an update on the remainder of the Finance Committee bills in next week’s Government Affairs Report.

For more information, contact CBIA’s Bonnie Stewart at 860.244.1925 or bonnie.stewart@cbia.com.