Despite widespread initial support in Hartford, a proposal to repeal a $250 tax on business entities died in the closing days of the Connecticut General Assembly”™s two-year session.
Both Gov. M. Jodi Rell and Democratic leaders had supported eliminating the tax, enacted six years ago during a budget shortfall, agreeing that it placed an unfair burden on the smallest businesses.
With the state”™s tax revenues lagging in the current downturn, however, the $30 million-plus the tax generates was deemed too critical to the state”™s budget.
In early May, Rell asked the Legislature not to pass bills that could have an adverse impact on the state budget, and in the past few weeks has issued multiple edicts mandating spending controls by state agencies.
“It”™s not surprising that you get (legislative) casualties in down times,” said Peter Gioia, vice president and economist for the Connecticut Business and Industry Association (CBIA). “When things go south, new initiatives go south also.”
Besides the business entity tax repeal, a number of other bills died in the Connecticut General Assembly that might have played a role in spurring business. With the overnight success of a tax credit to lure film productions, legislators had proposed tax credits for “angel” investors who provide early funding to startups; and for the creation of “green” buildings that cut energy use.
Speaker of the House James Amann, a Milford Democrat who crafted the film tax credit, announced in April he would not seek re-election. In January, Amann became the first Democrat to announce a committee to explore running for governor in 2010, but has yet formally to announce his candidacy.
Pundits predict Democrats will elect their majority leader Christopher Donovan next winter as speaker. The Meriden resident is a staff organizer for the Congress of Connecticut Community Colleges, a member of the AFL-CIO.
Donovan”™s union involvement has some wary that the upcoming session could feature a wave of legislation deemed unfriendly to businesses and entrepreneurs.
Several such bills died in the recently concluded session, including one that would have required companies with at least 50 employees to provide hourly workers up to a week off for illness per year.
The Connecticut General Assembly also failed to pass proposals for new taxes on delivery services and on profits from electricity generators; and a proposal to expand benefits under the state”™s worker”™s compensation system.
Donovan introduced two major bills that cleared the Connecticut General Assembly, which could have a significant impact on the bottom line for a broad swath of businesses. The Legislature passed a bill to allow small businesses to join health insurance plans offered to state employees, with the goal of reducing premiums companies must pay.
The Assembly also passed a bill to increase the state”™s minimum wage 8 percent, from its current level of $7.65 an hour to $8.00 next year and $8.25 in 2010.
Other bills that were sent to Rell for her signature included:
Ӣ a requirement for businesses to adopt privacy policies if they collect social security numbers;
Ӣ a requirement that property sellers certify a parcel is not located near land that could be polluted;
Ӣ new licensing requirements on security-guard vendors; and
Ӣ a mandated 10-hour safety course for workers on publicly funded projects.
