An omnibus economic development bill being debated in the state legislature’s Commerce Committee could have a wide ranging impact on employers by broadening the eligibility for new loan and incentive programs, boosting state tourism efforts and placing new restrictions on hiring practices.
Senate Bill 1, which has strong support among legislators, proposes to make more Connecticut businesses eligible to participate in the Small Business Express and Step-Up programs passed during the special jobs session in October by increasing the threshold for what constitutes a small business.
Currently, small businesses with 50 or fewer employees may qualify for the programs, but S.B. 1 would redefine small businesses as companies with 100 or fewer employees.
Sen. Gary LeBeau, the East Hartford Democrat who co-chairs the Commerce Committee, said the change would make an additional 3,600 Connecticut companies eligible for the economic development programs.
The Small Business Express program is providing $100 million in loans, forgivable loans or matching grants to employers to grow jobs or purchase equipment, while the Step-Up program has set aside $20 million to subsidize training and employment for the unemployed, veterans and the disabled.
“This is absolutely critical,” LeBeau said. “It can make a difference.”
LeBeau said lawmakers were probably too conservative in there definition of what qualifies as a small business last year, which has limited the number of companies that qualify for the programs.
The proposed law would also change the loan terms of the Small Business Express program, extending the repayment period from five to 10 years. Lenders involved in the program have raised concerns that the five-year payback period was too short for many small businesses.
Even so, about 350 companies have already applied to the program, and the state has awarded a half-dozen loans ranging from $11,500 to as much as $250,000.
“We feel there is plenty of room under the program to help more businesses,” LeBeau said.
In terms of other changes to the Step-Up program, the bill proposes to add new incentives for the hiring of veterans who have served overseas in Iraq and Afghanistan and also expands eligibility of the program to small retailers.
The measure aims to curb a growing problem of joblessness among state veterans.
“We are deeply troubled by the unemployment problem that plagues many of our veterans, both in Connecticut and nationally,” said Sen. Donald Williams, the Democratic president pro tempore of the Senate, in written testimony to the Commerce Committee.
According to Williams, the state Department of Labor says the unemployment rate in Connecticut for veterans between the ages of 18 and 34 is close to 16 percent, or double the state’s 8.2 percent unemployment rate.
And the problem could get worse. As the U.S. continues troop withdrawals from the Middle East over the next six months, it is estimated that more than 6,000 combat veterans will be returning to Connecticut.
Under S.B. 1, a new $10 million “Step-Up for Veterans” initiative would provide any Connecticut-based business that hires an unemployed combat veteran who has returned from Iraq or Afghanistan a grant of up to six months of the veteran’s salary and training cost, for a limit of $12,000 per soldier.
Bonnie Stewart, a lobbyist for the Connecticut Business & Industry Association, said the CBIA largely supports the bill, except for one measure that would prohibit companies from not hiring someone simply because he or she is unemployed.
The measure has been included in the bill based on job postings that have surfaced in Connecticut in recent years that advertise that unemployed people shouldn’t apply.
Stewart said the measure has dangerous implications for employers because it could open the floodgates for discrimination claims against employers, which are difficult and costly to defend against.
Other measures in S.B. 1 include the creation of a “Made in Connecticut” label campaign that would promote products manufactured by in-state companies. Another program in the bill would designate locations in the state with cultural, historical, or educational significance as “Connecticut Treasures,” to be promoted by the state.
