CBIA: Session Brings Welcome Relief for Taxpayers, Missed Opportunities for Small Business
The 2023 General Assembly brought welcome relief for taxpayers and residents, while missing significant opportunities to help struggling small employers, the state’s largest business organization said today.
CBIA president and CEO Chris DiPentima welcomed the income tax cuts—the first since the income tax was implemented in 1991—that were a feature of a state budget that drew wide bipartisan support.
“Lowering Connecticut’s high cost of living was a featured priority of CBIA’s Transform Connecticut policy solutions and we applaud lawmakers for those tax cuts,” DiPentima said today.
“We have 104,000 job openings and a shrinking labor force—down 46,500 people in just the last 12 months—that cannot meet the needs of employers and our economy.
“Affordability is a key factor driving the labor shortage and those tax cuts, along with initiatives addressing the housing crisis, will help lower the cost of living to keep current residents and attract new ones.”
DiPentima welcomed funding for housing initiatives and continued investments in education, workforce development, childcare, and community nonprofit groups as well as increased funding for the popular Manufacturing Innovation Fund that supports many programs.
“Connecticut’s workforce has long been one of our competitive strengths and it’s critical that we focus on building and developing that next generation,” he said.
“Strengthening our childcare system will help a significant percentage of the labor force return to work, especially with women, where the labor participation rate is 5% less than the state average, and needs continued focus.
“And boosting funding for nonprofit groups, who deliver high quality services in a cost-effective manner, helps address long term state government spending trends.”
He also applauded lawmakers for extending the 2017 fiscal guardrails, a key priority for the business community “given how those reforms significantly transformed the state’s fiscal outlook.”
“Those hard-won bipartisan reforms provided long-needed stability and a platform to cut taxes and invest in childcare, education, and workforce development,” he said.
Small Business: ‘Missed Opportunities’
However, DiPentima said the session was marked by numerous missed opportunities to lower small businesses costs and help smaller firms compete amid growing challenges.
“The failure to restore the pass-through entity tax credit was particularly frustrating, as that was featured in three different budget proposals during the session—why was such a critical measure considered expendable?” he asked.
“That’s $60 million that could be returned to 123,000 small businesses, many of them struggling to navigate the labor shortage, inflation, rising healthcare costs, and ongoing supply chain issues.
“It’s real money small employers could be using to invest in workforce development and growing their businesses, both of which would generate more revenue for Connecticut.”
DiPentima added that the latest extension of the temporary corporate tax surcharge “does little to improve perceptions about Connecticut’s business climate and the state’s economic priorities.”
Measures repealing the sales tax on workforce training, extending the net loss carry forward credit, expanding the research and development tax credit to small businesses, and reforming occupational licensing regulations also failed to win legislative approval.
A landmark bill providing small business employees access to affordable, quality healthcare did not pass this session, despite broad bipartisan support in both chambers and the backing of more than three dozen employer groups, nonprofit organizations, and the state’s Healthcare Advocate labeling it “a good thing.”
“Healthcare costs are a major challenge for small businesses and we had a broadly negotiated solution that is a game changer for small employers,” DiPentima said.
“Despite the negotiated agreement among all stakeholders, this bill was unfortunately compromised by a deliberate campaign of misinformation and falsehoods.”
DiPentima thanked the Democratic and Republican lawmakers who led and supported small business tax relief initiatives and the healthcare coverage measure.
“Those legislators went above and beyond in their support for small businesses and we are very appreciative of their efforts,” he said.
“However, it’s clear that we need more small business champions in the legislature. It’s not enough to say you support small businesses—words need to be followed up with action and policy must go above politics.
“Small businesses are the heart and soul of our economy and deserve better treatment so they can survive, compete, and grow.”
CBIA vice president of public policy Eric Gjede commended lawmakers for rejecting a series of costly workplace mandates, including paid sick leave expansion, unemployment benefits for striking workers, a ban on noncompete agreements, and increased workers’ compensation costs.
“Connecticut is among the costliest places in the country to run a business and this session again featured numerous bills that would make that situation worse,” Gjede said.
“We’re grateful that lawmakers from both parties were willing to reject these mandates, which do nothing to address the labor shortage crisis or help small businesses compete.”
Gjede said the 2023 legislative session featured a growing spirit of bipartisanship and a willingness among many lawmakers to collaborate and engage with employer groups which resulted in better solutions.
“We saw that bipartisanship very early in the session with the extension of the fiscal guardrails and that openness to reach across the aisle is much more pervasive,” he said.
“CBIA came into this session with a package of policy solutions developed with input from a variety of stakeholders and we appreciate how receptive Democratic and Republican lawmakers and administration officials were to those ideas.”
CBIA is Connecticut’s largest business organization, with thousands of member companies, small and large, representing a diverse range of industries from every part of the state. For more information, please contact Scott Beaulieu (860.244.1929).
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