Planned, Proven, Powerful

Thank you, Connecticut state policymakers.

Some of your best decisions over the last few decades have helped to attract, keep, and grow some of the nation’s biggest and most important industries here in Connecticut.

The strategies you’ve approved have helped anchor our state’s economy with highly innovative, productive, and admired job creators.

Recognizing how valuable our aerospace, defense,  pharmaceutical, research and development industries, manufacturers, and others are–to everyone in Connecticut–you created ways to help make sure they stay here.

Billions of dollars invested, tens of thousands of jobs, scores of high-tech facilities, and world-class products and services have resulted.

Untold thousands of other businesses and services also have grown here to support those industries, their employees, families, and communities.

And the ultimate impact has been billions in state revenues and an excellent quality of life for people all across the state.

What strategies?

Planned, proven, and purposeful state tax policy.

For Connecticut only

Over the years, the legislature has approved certain advantages created for Connecticut companies only, and for Connecticut investments only.

Advantages such as tax credits that can be earned only by companies making an investment in Connecticut jobs or facilities, and only as specified by the General Assembly–and only after making the required investment. 

Advantages that have recognized that these innovators need long-term, dependable commitments from the state–such as the net operating loss carryforward, that enables them to successfully navigate long-term product cycles.

Yet the Governor’s proposed two-year state budget would significantly reduce the value of these investment incentives for research and development, capital purchases, and other key economic drivers, and seriously reduce the net operating loss carry-forward mechanism so critical to long-term investment, in effect pulling the rug out from underneath many of these job creators and reducing future investment in Connecticut.

Long-term

Right now, state lawmakers are starting work on the new, two-year state budget. But also right now, as the chart shows, most of our pharmaceutical, aerospace and defense companies are working on product and development plans that go out 10, 15, 20, 30 years and more.

If it takes 30 years to design, engineer and manufacture products for the U.S. government, or to provide a new and vital medication for commercial market, then shouldn’t state tax policy follow it all the way?

For years, Connecticut has cultivated the R&D industry because of its economic power—not just in the excellent jobs and wages those companies offer, but also in the multiplier effect the industry has on other businesses that are located here to support them.

Positive tax policy

Obviously the state is in a fiscal predicament, facing a multibillion-dollar deficit for the next two years.

But the best way to grow state tax revenues is by growing our economy–and by sticking with strategic tax policy that has been:

• Planned and approved by the General Assembly and signed by governors.
• Proven to grow our economy and buoy our state budget.  
• Purposely used to anchor healthy businesses and industries in Connecticut.

The results are no mistakes. And if they have worked and are so beneficial to the people of Connecticut in so many powerful ways, we shouldn’t do anything to weaken them.

Without the strategic use of tax policy, many of the businesses and industries we’re depend­ing on to grow us out of the recovery would have left the state years ago.

Tax policy with a vision understands the reality that businesses are now competing not just with those in our neighboring states, but in a vast new global marketplace.

CBIA urges state lawmakers that this is not the time to put the brakes on jobs or economic growth. The legislature should further scrutinize the proposed budget to find additional cost savings and reject harmful measures that would weaken proven state tax policy.

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