CBIA, the Connecticut Manufacturers' Collaborative, and ReadyCT this week called on lawmakers to expand the state's manufacturing apprenticeship tax credit program to include smaller manufacturers.
In a May 6 letter to legislative leaders, the three organizations said the tax credit "is critical to workforce development in the state as we focus resources on this vital sector."
Under current state law, the tax credit is only available to businesses organized as C corporations, typically larger companies.
Extending the credit to pass-through entities—LLCs, partnerships, and S corporations—will help small and midsized manufacturers mitigate training costs and put them on an even par with larger companies.
Skilled Worker Shortage
In the letter, the three organizations said preventing small manufacturers from accessing the credit was contributing to the state's skilled worker shortage.
"By unintentionally limiting the number of apprentice slots in the state, current policy is creating a bottleneck in the workforce pipeline and driving individuals out of state to find apprenticeships elsewhere," the letter read.
"Many large companies can afford to take on new apprentices in part because of the current tax credit structure.
"However, the cost of not only the apprentice, but also the mentor and the lost productivity, is a significant hurdle smaller manufacturers cannot overcome."
The Governor’s Workforce Council’s strategic plan puts the annual demand for manufacturing employees at 6,000 new workers because of the impact of retirements and new defense contracts.
"This policy gives small and mid-sized companies the opportunity to offset the cost of taking on apprentices and meet industry needs," the letter notes.
While expanding the credit will cost the state a projected $1.4 million annually, CBIA, CMC, and ReadyCT said helping small manufacturers create jobs in Connecticut is an investment that will more than make up for any lost tax revenue.
The three organizations are calling for the tax credit expansion to be included in the new state budget, which the legislature must adopt before adjourning in early June.
"Please be our partners as we work to rebuild Connecticut by supporting the future growth of the state’s critical manufacturing sector," the organizations wrote in the letter.