Lighten Our Unemployment Tax Burden’ Say Businesses
HB 5314 will use surplus dollars for economy-expanding activity
Dozens of Connecticut businesses this week urged lawmakers to lift a heavy unemployment compensation tax load just a bit to free-up dollars for research and development, hiring, increased wages, and other economy-expanding activities.
Business owners, executives, and associations representing thousands of Connecticut companies testified before the Labor Committee in support of a bill that would use some of the expected state budget surplus in an innovative way.
HB 5314 applies an estimated $60 million of the projected state budget surplus to pay a portion of the interest owed on federal dollars borrowed to keep the state’s unemployment compensation system afloat after the Great Recession.
In addition to their normal unemployment compensation payments, Connecticut businesses have been straining under the additional burden of yearly increases to their federal unemployment taxes and special assessments to pay back, with interest, the federal debt.
Up at night
“Enough is enough,” said Steve Wilson, chairman and owner of Crescent Manufacturing in Burlington. In written testimony, Wilson said the “unfunded mandate” dollars “being taken out of Crescent Manufacturing [have] “severely restricted our hiring and growth plans.”
One of the biggest “what keeps you up at night” issues facing business owners, said Diane Nadeau, president and CEO of The Chamber of Commerce, Inc., Windham Region, “is high unemployment compensation taxes and how that affects their competitiveness both inside and outside our state.
“If there is a way to minimize these costs by reducing the interest owed to the federal government,” Nadeau added, “it frees up that revenue to … grow these companies and hire additional employees.”
Michael Gamache, president of The Carlyle Johnson Machine Company in Bolton, said the recession and reduction in the national defense budget “have stressed our capacity to devote proper resources for optimizing our research and development efforts.
He added, “Passing HB 5314 would allow Carlyle to redirect the monies it now pays toward the biennial assessments to endeavors that directly translate to strengthening our company for long-term success.”
What lawmakers have to realize, said business leaders, is that many homegrown companies are competing in the global economy, which puts extra cost pressures on them.
According to Dianne Veley, global human resources manager at The Siemon Company in Watertown, the family-owned business employs more than 290 people in Connecticut–and an additional 550 people globally.
High taxes in Connecticut, she said, are impacting Siemon’s “ability to compete in a global environment and to continue to employ Connecticut residents.
She urged the Labor Committee to support HB 5314 and “take steps right now to turn the tides and become a favorable state in which companies like ours can prosper and grow.”
While the recession may be over in many people’s minds, Connecticut businesses continue to pay the hefty price tag of the safety net used to help unemployed workers. CBIA continues to encourage the Labor Committee to approve this innovative and economy-boosting measure to help businesses drive our economic recovery.
For more information, contact CBIA’s Eric Gjede at 860.244.1931 | email@example.com | @egjede
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