The state’s largest business lobby Thursday morning criticized lawmakers for failing to further pay down the state’s COVID-related unemployment insurance debt and ignoring businesses’ needs, calling the 2022 legislative session – which ended Wednesday – “a disappointment for employers, particularly small businesses.”
CBIA president and CEO Chris DiPentima applauded the General Assembly’s efforts to provide tax relief to residents, but was “puzzled” about lawmakers’ “seeming indifference to small businesses,” which are recovering from two years of disruptions due to the pandemic.
DiPentima said the legislature leveraged its historic budget surplus to allocate $3.5 billion to state employee retirement funds – “an important step toward securing Connecticut’s long-term fiscal health.”
“That was a smart use of budget surplus dollars and a reminder of the crucial role the 2017 bipartisan fiscal reforms played in getting us to this point,” DiPentima said.
But he said he was disappointed that only $40 million was allocated toward the state’s federal unemployment loan debt—just 8% of the $495 million balance.
“That’s essentially now a $400 million-plus tax hike on employers,” DiPentima said.
The $24.2 billion budget includes $600 million in individual tax relief, which DiPentima called “a small step in the right direction for addressing the state’s high cost of living.” However, he questioned the long-term impact, as only $300 million is recurring.
With the worker shortage a top concern, he said employers support the budget’s $80 million for affordable childcare, along with $50 million to support affordable housing. The budget also expands the manufacturing apprenticeship tax credit to small businesses and repeals taxes on ambulatory surgical centers and movie theaters.
But DiPentima criticized the legislature’s failure to restore the pass-through entity tax credit to its original level, even though the tax generated an additional $700 million in revenue during the year.
DiPentima said the legislature missed an opportunity to adopt long-term initiatives to “streamline and modernize” state government operations by implementing reforms outlined in the Lamont administration’s CREATES Report, which identified $600 million to $900 million in annual savings.
“Policymakers had a real opportunity to support small businesses and make smart investments to help resolve the labor shortage and drive our economic recovery,” DiPentima said.
Eric Gjede, CBIA’s vice president of public policy, said the bill prohibiting employers from holding mandatory employee meetings addressing unionization, is “a flagrant preemption of federal law and if not vetoed by the governor, will be settled by the courts.”
He said that CBIA and other employer groups “spent too much of the session on defense trying to address legislation that fails to address the labor shortage and undermines our recovery.”
