When lawmakers returned to the Connecticut Capitol in February to open the 2008 legislative session, it was obvious that the national economy was declining and the potential impact on the state was a concern. The most oft-heard theme from returning lawmakers was that they would strive to “do no harm” to the economy when considering legislative proposals this year.
Even without the national downturn, it was, and is, tough for Connecticut businesses to compete. They face some of the highest business costs in the nation along with other pressures such as global competition and the shortage of skilled workers in the state.
That’s why employers have asked lawmakers to apply a simple test before voting on an issue: “Will it help Connecticut companies grow, or … make it more difficult for them to survive?”
How have state lawmakers responded? It’s still too early for a complete answer, but early indications are mixed. Lawmakers have rejected, thankfully, a number of proposals that would, if enacted, “make it more difficult” for employers. Yet problematic measures remain.
In their most significant task, policymakers will agree on revisions to the two-year state budget, probably in the final days of the session in early May. Leaders on both sides of the aisle have said they are concerned about the state’s economy and want to control state spending and taxes. That’s a good sign.
State legislators, however, are still considering a number of proposals that fail the “help … or make it more difficult” test. These are measures that would increase costs, add administrative burdens and in fact, make it harder to do business in Connecticut. Here is a brief review of some of those proposals:
Taxes: One proposal that doesn’t appear to be a business tax increase really is. Senate Bill 701 would create a “homestead exemption” in 18 large cities and towns in an effort to address municipalities’ property tax burden. But the proposal offers illusory tax relief, merely shifting more of the tax burden onto commercial and industrial property owners in those communities.
Health care: Instead of finding ways to reduce the high costs of health care, discussion has largely shifted to who will pay for it. One proposal (SB-5536) opens the very expensive state employees’ health care plan to municipalities and businesses. It doesn’t reduce the cost of the state’s gold-plated plan, but does satisfy its proponents’ desire for it to be a first step toward a government-run, taxpayer-funded health care system.
Workplace costs: Many of the harmful proposals dealing with the workplace were dismissed early in the session but some linger, such as a proposal mandating paid sick leave for all employers of 25 or more employees. SB-217 would increase costs and weaken the ability of employers to balance their employees’ needs with the ability to stay a productive and competitive business. Other harmful measures would greatly increase employers’ workers’ compensation costs.
Global warming: Many people are concerned about global warming, and state policymakers have made Connecticut a national leader on climate change. Yet HB-5600 would push the state far ahead of the pack, creating more government regulation and bureaucracy, increasing business costs and jeopardizing the state’s manufacturing industry.
Test-passers: On the other hand, several proposals would help Connecticut’s business climate. Some that remain would look at ways to reduce the state regulatory burden on small businesses (SB-399), encourage investments in emerging industries (SB-401) and improve the operations of the Department of Transportation (SB-46 and SB-285).
As the session winds down, we will continue to urge lawmakers to “first do no harm” and consider whether their votes will help Connecticut’s economy or make it more difficult for the state to weather the economic downturn and position itself for further growth. We’re guardedly optimistic that, come adjournment day, lawmakers will have made the right decisions on Connecticut’s economy.
Joseph F. Brennan is a senior vice president of public policy for the Connecticut Business & Industry Association.
