Improving Connecticut’s Business Climate More Urgent As Other States Move Forward
Making Connecticut one of the most competitive states in the nation is vital to creating more jobs and strengthening our state’s economy—and the focus of a new statewide campaign that CBIA and the state’s business community are launching.
Called CT20x17, the campaign is specifically aimed at making Connecticut a top state for business in order to secure a brighter future for everyone. The goal is to place Connecticut within the top 20 in all of the national competitiveness rankings by the year 2017.
Achieving that goal is even more imperative, because competitor states aren’t standing still, recognizing that by improving their business climates they’ll get the job creation and investments they need to drive and sustain long-term growth.
Two examples this week came from our neighboring states, New York and Massachusetts.
The New York State budget signed into law this week contains numerous tax reductions and underscores how important it is for Connecticut to move aggressively to continue efforts to improve our economic competitiveness.
Specifically, New York State:
- Eliminated the 5.9% business income tax on qualified manufacturers
- Reduced the business tax rate for all other businesses from 7.1% to 6.5% (Connecticut’s corporate tax rate is 9%, composed of a 7.5% base rate and 1.5% surcharge.)
- Created a 20% real estate property tax credit for manufacturers that own or lease property
- Accelerated the phase out of a surcharge on electricity bills
Meanwhile, Massachusetts lawmakers this week moved forward with a plan to reduce the unemployment compensation tax burden on employers in the Bay State.
As the 2014 session of the General Assembly moves into its final weeks, lawmakers have several opportunities to begin making progress on improving Connecticut’s business climate and competitiveness.
Among other things, the legislature can:
- Accelerate the phaseout of the corporate tax surcharge to make Connecticut more competitive with our neighbors
- Reduce the unemployment compensation tax burden on businesses by applying some of the projected state surplus to a portion of the interest owed on federal dollars borrowed to keep our system afloat
- Extend the R&D and apprenticeship tax credits to pass-through entities—which include thousands of small businesses and manufacturers in the state
- Reject new mandates and additional restrictions on Connecticut employers that only makes it harder for businesses to succeed here and respond to changing economic conditions
Lawmakers should also adopt and accelerate the completion of a proposed comprehensive study of the state’s tax structure. They should make sure that the study is focused on making Connecticut more economically competitive and attractive for business investments and job creation.
The news from our neighboring states this week underscores the urgency of that study and of the other legislative actions needed.
What our state lawmakers do in the next few weeks will send a message not only to Connecticut businesses, but also to businesses and governments in other states about our commitment to being as competitive as possible.
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