Connecticut’s chief business lobby wants state lawmakers to get Connecticut’s fiscal house in order when they reconvene on Feb. 3, warning that the 88,000 jobs lost during the recession won’t come back without an overhaul of state policies.
In its annual Government Affairs Agenda, the Connecticut Business & Industry Association says that lawmakers must reduce wasteful spending and avoid tax increases during the next legislative session if they want to revive the state’s ailing economy.
“State lawmakers must do all they can to encourage employers to invest and grow here in Connecticut,” said John R. Rathgeber, CBIA president and CEO. “A strong employer base will generate the tax revenue state government needs to deliver important public services and programs as well as keep and create the jobs necessary to sustain our high quality of life and secure Connecticut’s future.”
In its Government Affairs Agenda, the CBIA outlines dozens of actions it believes policymakers should and should not take to create a healthier business climate and promote economic revival.
Key recommendations include:
• Eliminating the 70 percent cap on corporate income tax credits;
• Tightening eligibility standards for unemployment compensation;
• Increasing funding for transportation.
Bonnie Stewart, a lobbyist for the CBIA, said state spending, health care, and labor issues are among top priorities for the business community.
The legislators’ No. 1 goal should be to straighten out the state’s finances, Stewart said.
In 2009, the Democratically-controlled General Assembly passed a two-year $37.6 billion budget.
A continuing decline in state revenues has already put the state’s two-year spending in the red by more than $500 million. Of greater concern for the business community, however, is the state’s dependence on more than $4 billion in borrowing and one-time revenue sources to fill that budget, money that likely won’t be there when the spending plan expires.
Reform Government
The CBIA is urging lawmakers to find ways to be more efficient with state funds and take a lesson from manufacturers by using lean processes to streamline state agency operations, or create incentives to encourage state employees to identify wasteful spending.
CBIA also suggests finding alternatives to incarceration for nonviolent offenders in order to cut the rate of prison recidivism, and for the state to develop a plan to reduce its long-term unfunded liabilities.
In addition, the CBIA wants the state to encourage business investment by not increasing taxes, making tax policy more predictable, and eliminating the 70 percent cap on corporate income tax credits.
“Our current economic situation combined with record budget deficits and long-term obligations make it imperative for lawmakers to begin the hard task of reforming state government by cutting the size of government and changing the way it delivers programs and services,” said Joseph Brennan, CBIA’s senior vice president of public policy.
In terms of health care, the CBIA suggests that lawmakers should focus on improving the state’s employer-based health insurance marketplace, by investing in electronic medical records, creating public-private partnerships for wellness and chronic disease management programs, and requiring all citizens to get insurance coverage.
Stewart said it is also imperative that lawmakers do not approve more health care mandates, which can place a heavy burden on small business budgets.
“We don’t want to make it more expensive to hire people,” Stewart said. “We are hopeful that the state doesn’t do a lot of things they’ve done in past.”
Finally, the CBIA is also urging lawmakers not to impose labor mandates that would increase costs and make it more difficult to create and retain jobs in the state.
For example, they are urging lawmakers not to approve legislation that would make it easier for unions to organize in the state.
Stewart also said the state needs to seek alternatives to raising the unemployment compensation taxes in response to the unemployment insurance fund going broke.
Instead, Stewart said the state should consider tightening standards for who qualifies for those benefits, and also strengthen the system’s audit functions to make sure people receiving the funds are actively seeking meaningful work.
The 2010 General Assembly is scheduled to convene Feb. 3 and run through May 5.
