A host of new laws that could impact Connecticut businesses’ bottom lines go into effect this month.
The laws were largely passed during the recent legislative session that ended in June, which received mixed reviews from business advocates who praised certain economic development initiatives but were disappointed with how lawmakers handled the two-year state budget plan.
More Taxes
Although lawmakers say they did not raise new taxes during the legislative session, they did extend for two years certain taxes that were due to sunset.
That includes the 20 percent corporate income tax surcharge and the cap on insurance premium tax credits. The temporary tax on electric generation facilities has also been extended for three months.
Meanwhile, the controversial 4 cent gas tax increase has already gone into effect. The tax hike actually stems from legislation passed in 2005, although Republican lawmakers made a failed attempt to repeal the hike in the recent legislative session.
The increase will give Connecticut a 49-cent per gallon tax on gasoline — 26 cents higher than Massachusetts and 16 cents higher than Rhode Island.
Minimum Wage
The increase in the state’s minimum wage officially goes into effect July 1, but employers won’t have to adjust their employee’s pay until Jan. 1, 2014.
The new law increases the hourly minimum wage from $8.25 to $8.70 on Jan. 1, 2014. Employers will have to boost minimum wage pay again on Jan. 1, 2015 to $9.
The law, however, does shield some hotels and restaurants from the higher costs by increasing the so-called “tip credit” in each of those years. That will keep the employer’s share of hotel and wait staff’s hourly wages at its current $5.69 and bartenders’ hourly wages at $7.34.
Next Gen
On the economic development front, the state’s nearly $2 billion investment in UConn’s science, technology, engineering, and math (STEM) programs officially goes into effect this month. The law authorizes $1.55 billion in new bonds for “Next Generation Connecticut,” which will lead to the construction of new STEM-related facilities at UConn’s Storrs campus; the hiring of additional faculty; and the expansion of student enrollment.
Next Generation Connecticut got strong support from the business community, particularly biotech and manufacturing firms looking to nurture their future workforce.
Economic Development
Meanwhile, Connecticut Innovations will be given more leeway to make deals without getting approval from its 17-member board of directors. State legislator’s passed a law allowing CI to approve deals of $150,000 or less to start-up companies, without board oversight.
The extra leeway gives CI the ability to turnaround smaller deals in a quicker fashion, although the quasi-public agency will still need to follow its standard underwriting and oversight guidelines.
There is also a new measure going into effect that will provide unemployed residents greater ability to become entrepreneurs. Specifically, it allows individuals who are currently eligible to receive unemployment insurance to develop a new business without risk of losing benefits.
