🔒Business groups pan 2024 legislative session

The head of Connecticut’s largest trade organization said the legislative session was disappointing for the business community, as lawmakers did little to make the state more affordable for residents and companies, or encourage population and workforce growth.

“Instead, we got too many bad bills that got defeated, and unfortunately some that got passed,” said Chris DiPentima, president and CEO of the Connecticut Business & Industry Association.

DiPentima said the 2024 short session, which ran from Feb. 7 to May 8, lacked the cohesive “bipartisan collaboration and coordination” that existed last year, when there was unanimous support for fiscal guardrails and a bipartisan budget adoption.

“This session just did not have that,” he said.

Among the biggest disappointments, DiPentima said, was the expansion of the state’s paid sick leave law, which the CBIA, National Federation of Independent Business (NFIB) and other trade groups lobbied against.

The General Assembly voted to expand the state’s paid sick leave law to include nearly all private-sector workers, meaning even small businesses will be required to give their employees 40 hours of leave annually.

Currently, paid sick leave requirements only apply to companies with more than 50 workers. The new law will phase in gradually, impacting employers with at least 25 employees in 2025; at least 11 employees in 2026; and then all companies in 2027.

Employees must work 120 calendar days before being eligible for time off.

The legislation, which received fervent support from Democratic Gov. Ned Lamont, also creates a working group to study tax credits for small businesses impacted by the expansion.

“Whenever there’s a new mandate, whenever there’s some level of new compliance, that comes at a cost to small business owners, particularly in terms of administrative costs but also actual costs,” said Andrew Markowski, Connecticut director of the NFIB, which represents small companies.

DiPentima said the paid sick leave expansion will also create confusion for larger companies because the legislation has language that conflicts with existing law. For example, current law requires employees to provide advanced notice of a leave, and a doctor’s note if they are going to miss a certain length of time.

The newly passed bill eliminates those requirements, DiPentima said.

“This is going to be a nightmare for businesses,” he said. “I know our HR (human resources) hotline is going to be ringing off the hook.”

Another disappointment was a last-minute push by Democrats to offer financial aid to striking workers, which was a hot-button issue this year.

Democrats in both chambers passed a bill in the waning days of the session that would have created a $3 million state fund to assist strikers without explicitly saying so.

However, Lamont called the proposal “vague” and said he would veto it.

“I’m not going to support it,” Lamont said. “If you want to do this, have a real vote next year so people know what they’re voting on.”

Democratic lawmakers earlier in the session pushed forward a separate proposal that would have allowed striking workers to qualify for unemployment benefits, but Lamont objected to it and it didn’t pass.

“The governor opposed the original version of the bill publicly, and then a workaround was created that never went through committee, never received the public hearing, and ended up being the last bill to pass for the session,” DiPentima said. “It was not only a bad bill, but the process of how it passed was just absolutely terrible.”

CBIA also took issue with the state’s $370 million budget stabilization plan, which earmarks expiring federal pandemic grants for higher education, social services, mental health, child care and town aid next fiscal year. The concern, the CBIA said, is that the one-time funds won’t be available in the future, creating longer-term budget uncertainty.

“By using one-time federal funding to fill budget gaps, legislators opened the door for future tax hikes and difficult spending cuts,” said Chris Davis, CBIA’s chief lobbyist.

There were some bright spots this session, DiPentima said.

Steps were made to increase private and public funding for the state’s childcare industry, which has faced significant headwinds coming out of the pandemic — an issue for employers looking to hire and retain employees amid a broader workforce shortage.

There were also a few approved bills that benefit the state’s bioscience industry, including promoting the expansion of whole-genome sequencing.

DiPentima said he believes the CBIA still has a good relationship with Lamont and the General Assembly as a whole. But he was disappointed that businesses played defense most of the session, and lawmakers did little to strengthen Connecticut’s economic competitiveness during a time of fiscal stability.

Looking ahead

With the 2024 session now in the rearview mirror, business groups are already looking ahead to next year.

DiPentima said a major CBIA priority in 2025 will be continuing to push for so-called association health plans, which would allow qualifying chambers of commerce and trade groups to act as one large employer and offer their small business members self-funded health insurance benefits.

Bills permitting association health plans have failed in each of the last two years, despite having some bipartisan support. Such plans are needed, DiPentima said, as employers continue to face rising healthcare costs that exceed the rate of inflation, and insurers increasingly leave the small group market.

Regulatory and tax reforms will also be focus areas, DiPentima said. That includes supporting measures that speed up permitting processes within state agencies, eliminate the temporary corporate tax surcharge and expand the R&D tax credit to pass-through entities.

Markowski emphasized the importance of lawmakers preserving the state’s fiscal guardrails heading into another two-year budget cycle.

“As a whole, NFIB’s perspective is that the fiscal guardrails have worked well, and they should continue to be maintained,” Markowski said.