Senate Republicans Introduce Legislative Initiative to Help Small Businesses Create Jobs and Grow Connecticut’s Economy
‘08 Legislative Priorities Include: Expanding the Job Creation Tax Credit; Repealing the Business Entity Tax; Eliminating Counterproductive Regulations; and Attracting Next Generation Industries to Connecticut
HARTFORD – State Senate Minority Leader John McKinney (R-Fairfield), members of the Senate Republican Caucus, and business leaders from across the state today introduced a legislative initiative designed to promote job growth and help to ensure Connecticut’s long-term economic security. The proposal, which builds on the Job Creation Tax Credit introduced by Senate Republicans and passed into law in 2007, aims to grow the state economy by helping small businesses create new jobs, eliminating counterproductive regulations, repealing the business entity tax, and attracting new “next generation” industries to Connecticut.
“The General Assembly must do its part to help mitigate the effects of a potential recession, maintain state services, and ensure the state’s long-term economic security. One way we can do this is by structuring our government policies – particularly those concerning taxes and regulation – in a way that encourages economic growth and job creation.” said Senator McKinney. “As the traditional economy has given way to the entrepreneurial economy, small businesses have become increasingly important to our state’s fiscal well-being. While it is important for the legislature to consider options for short-term economic stimulus, we also need to address the underlying problems that have caused business growth to slow and unemployment rates to increase.”
“By easing regulatory burdens and lowering taxes, we are creating a more business-friendly environment that will encourage Connecticut small businesses to invest in job growth,” said State Senator Dan Debicella (R-Shelton), ranking member on the General Assembly’s Commerce Committee, and co-author of the Senate Republican proposal. “It is my hope that our proposal will be met with bipartisan support.”
Senate Republicans are working to pass the following proposals in 2008:
Expanding the Job Creation Tax Credit to Small Businesses: Under existing law passed in 2007, the credit is available to Connecticut C-corporations that create 10 or more net new jobs in a year. Qualifying businesses approved by the Department of Community and Economic Development (DECD) receive a tax credit equal to 60% of each new worker’s state withholding tax.
Senate Republicans are working to extend the benefit to all businesses, eliminate the need for DECD approval, and apply the credit annually for every net new job created. The proposed law would take effect July 1st making the credit applicable to income years commencing on or after January 1, 2008.
Repealing the Business Entity Tax Effective January 1, 2008: Republicans have been working to abolish the $250 annual “tax on existing” since its inception in 2002, most recently as part of the 2007 No Tax Increase Budget Proposal. A Republican amendment that included the elimination of the business entity tax failed last year on a 12-24 party-line vote in the Senate. A similar amendment failed in the House.
Bringing Business Sense to Regulation: Over the years, a lack of oversight has resulted in a growing number of unnecessary, costly and often redundant business regulations. This has created a bureaucratic maze in which business owners have to seek multiple permit approvals from multiple uncoordinated state agencies, for the same project.
In an effort to make this process more efficient, Senate Republicans are proposing DECD conduct a cost/benefit analysis of all existing regulations every five years. When it is determined that a regulation’s societal cost outweighs its benefits, or that the regulation in question is redundant, it will automatically be repealed unless the legislature’s Regulations Review Committee votes to keep it.
Creating Next Generation Industries in Connecticut: Senate Republicans are proposing to extend the movie industry tax credit that created “Hollywood East” to emerging industries likely to provide employment to middle class working families in Connecticut. Targeted industries could include alternative energy, environmental remediation, optics and photonics, life science devices and nanotechnology. Under the proposal, companies who have not yet made a profit may trade their tax credits to profitable Connecticut companies.
