Regulatory reform, repealing Keno, and what — if anything — to do with a projected $500 million budget surplus are a handful of issues on the Connecticut General Assembly’s legislative agenda starting Feb. 5.
Gov. Dannel P. Malloy spent a good chunk of his first three years in office talking about making Connecticut a more business-friendly state, and the core of that mission this year will be to eliminate or update regulations that are overly burdensome, duplicative, or ineffective.
“I would love to get rid of thousands of pages of regulations in Connecticut,” Malloy said in a recent interview.
Malloy requested the public’s help in October to determine which regulations need updating, but the response was rather lackluster, the Democratic governor said. Still, several industry groups responded with robust recommendations, and that, coupled with the work state commissioners have done within their own agencies, will give Malloy enough information to submit a regulatory reform bill sometime this legislative session, he said.
“Anything that the legislature can do to move forward with regulatory reform would be something favored by businesses,” said Andrew Markowski, Connecticut state director for the National Federation of Independent Business.
Sen. Minority Leader John McKinney (R-Fairfield) said he wants to repeal the Keno law that was written into the two-year state budget in 2013 to plug a $31 million revenue shortfall.
The Connecticut Lottery Corp. had planned on as many as 1,000 Keno locations around the state starting Jan. 1, but the bingo-like game has not yet begun, impeded by, among other things, tricky negotiations with the state’s two casinos, which have exclusive gambling rights in the state.
Now that the state budget has a projected $500 million surplus for the current fiscal year, McKinney said Keno revenue isn’t needed and the game should be repealed. He also opposes online gambling and wants to prevent the state from allowing slot machines at off-track-betting locations, which is being considered in several towns including Windsor Locks.
“Gambling is not a good economic development tool,” McKinney said.
The state’s $500 million budget surplus might come into play as well. The extra cash gives the legislature the option to lower taxes, spend more on state programs, or set aside money in a rainy day fund to deal with future deficits, including a $1.1 billion budget shortfall projected in 2015.
Markowski of NFIB said the legislature should consider rolling back tax increases passed in 2011, which included higher income tax rates and a 20 percent corporate tax surcharge.
“Maybe the dire fiscal situation no longer exists, and we can look at bringing down some of those taxes,” Markowski said. “What does the governor and the legislature do with that money?”
With the surplus, House Republicans have proposed $247 million in cuts to the sales tax and the business unemployment tax, including restoring the exemptions to the sales tax for clothing and non-prescription drugs.
NFIB’s mantra to lawmakers this legislative session is to “First do no harm, and then look at improvements,” Markowski said.
Previous years’ agendas included items like minimum wage increases and paid sick leave that added to Connecticut’s anti-business perception, Markowski said. The legislature needs to avoid items like that this year, including a proposal that would allow employees of private firms to participate in a public retirement plan. It’s an idea that has been kicked around by policymakers, Markowski said.
The legislature should also keep previously adopted business programs in place so that companies have certainty, said Bonnie Stewart, director of government affairs for the Connecticut Business & Industry Association.
That includes streamlining environmental permitting; continuing the push for energy industry innovation; pushing the 2012 education reforms; and by no means making it more expensive to do business in Connecticut through changes in labor and employment laws, Stewart said.
On the transportation front, the legislature should restore the full amount to the Special Transportation Fund and not siphon off any more money for the general fund budget, Stewart said. The STF is needed to upgrade the state’s aging transportation infrastructure.
“As the federal dollars for transportation fall away, the state dollars become all the more important,” Stewart said.
Malloy said he agrees Connecticut’s infrastructure funding has been an area of weakness for the state, and Connecticut needs to return to making the appropriate amount of investments.
“I am trying to shake Connecticut’s bad habits off of it,” Malloy said.
House Speaker Brendan Sharkey (D-Hamden) said recent investments in economic development programs, like the Small Business Express Program, and other strides taken by the legislature and the Malloy administration are slowly changing the complaint that Connecticut is not a business-friendly state.
“It is something we in the legislature have been trying to fight as long as I have been there,” Sharkey said. “It is a slow process. It is like turning an aircraft carrier around.”
