Q&A talks to Andrew Markowksi, Connecticut state director of the National Federation of Independent Business (NFIB), about the state budget and legislative proposals that will impact business.
Q: We are almost at the midway point of the legislative session. What have been some pro-business policies that have been proposed so far? What's the likelihood of their passage?
A: Some of the most promising policy discussions this session so far have come from Gov. Dannel P Malloy directly. During his state of the state address, he encouraged lawmakers to focus on predictability for the business community and to find a way to maintain existing services while reducing the costs to taxpayers, while also referencing our history of shortsighted state government and bloated spending.
Additionally, his admission that a reluctance to improve the business tax climate has resulted in neighboring states having the upper hand with interstate competition represented a significant shift in his perspective that has given our members reason to believe that the time for substantive change is upon us. We are optimistic that he and the legislature can work together to achieve success and that a reduction in the size and scope of Connecticut's government is a very real possibility.
From the legislative side, members of all four legislative caucuses have put forth good ideas and proposed positive bills that NFIB/CT supports. We've seen bills to provide relief from the personal property tax for small businesses, bills addressing the estate tax, as well as various regulatory reform measures. The Commerce Committee has been discussing several very positive measures for the small business community, including a proposal that would allow state agencies to waive penalties on businesses for first time regulatory violations.
Unfortunately, with the good comes the bad, and even the mere discussion of some of the anti-business bills can have an adverse impact on the business community.
Q: What have been some of the most anti-business proposals so far?
A: The Labor and Public Employees Committee has been ground zero for bad-for-business ideas yet again this session. We've seen them debate various one-size-fits-all mandates, put forth a proposal that drastically alters state Family and Medical Leave Act laws and creates a payroll "tax" to fund a state-run paid-leave program, when what they should really be putting their energy into is developing a pension system that has a chance of remaining solvent in the future.
The minimum-wage debate, which has grown in popularity nationally, found a home on the Labor Committee where they debated the merits of drastically increasing the wage to $15 when the ink was barely dry on the last minimum-wage increase. Hopefully lawmakers on both sides of the aisle and Malloy will come to realize that both of these ideas are the wrong conversation to be having. But to even have these debates shows a complete lack of understanding of what the small business community is facing or desires.
Q: The state budget continues to be the 800-pound gorilla in the state Capitol. How have businesses reacted to Gov. Malloy's budget proposal?
A: Malloy's budget proposal this year represented a stark contrast to some of his proposals in the past. He called for unions to participate in pension reform, consolidating state government and radically reforming municipal funding. Our members were relieved to hear that he is now focused on improving our economic conditions for the future and solidifying the business sector.
Our hope is that the legislature will support him with actual reforms and resist the temptation to once again put off making the hard decisions until sometime in the distant future. While everyone is concerned about the impact of property taxes, the business community also realizes that we need to have a real discussion about the affordability and role of state government vs. local government.
Regardless, local governments have been calling for mandate relief for years, and NFIB/CT supports several of those mandate-relief measures such as prevailing-wage reform.
Q: When the final budget gets approved, what should the business community expect? Will lawmakers stick to Malloy's plan to not raise business taxes?
A: Lawmakers never cease to amaze the small business community by attempting to use them as a means to generate additional revenue. With several large and small companies leaving Connecticut for more economically friendly states, the hope is that legislators will view the development of our state budget as a tool that can help entice more businesses instead of scaring existing ones away. Connecticut's spending problem is something that requires intervention before we lose the businesses still attempting to operate here.
Q: What is the mood of your members in terms of the "state" of the state of Connecticut?
A: Compared to this time last year, and since the election in particular, it has improved marginally, due to a variety of factors.
Our members understand that it will take a great deal of effort and time to right the ship here in Connecticut, but unless the legislature passes a solid, on-time budget and doesn't put forth any new mandates on small businesses, their patience and mild optimism will quickly wane.