May 11, 2018

Biz groups give state lawmakers mixed reviews

HBJ file photo
HBJ file photo
CBIA CEO Joe Brennan.

Business groups commended lawmakers for reaching a bipartisan state budget agreement and avoiding new employer mandates, but they cautioned that Connecticut's long-term fiscal problems still remain.

"We thank both Democratic and Republican legislators and the Malloy administration for their hard work this session," said Joe Brennan, president and CEO of the Connecticut Business & Industry Association, the state's chief business lobby.

However, Brennan added that the "lack of progress on the more serious short- and long-term financial problems facing the state means that these issues will continue to impact our ability to attract investment and jobs here.

"While the bipartisan budget agreement passed shortly before the General Assembly's May 9 deadline deals with some of the state's immediate fiscal problems, severe challenges remain," he said.

The legislature on Wednesday overwhelmingly approved a $20.86 billion state budget that does not increase taxes, though it does raise the maximum tax rate cities and towns can levy on motor vehicles. It also would spend rather than save more than $300 million from this April's $1 billion surge in income tax receipts.

It does not include several major changes sought by Republicans to collective bargaining rules regarding state and municipal employees.

And while state finances are projected to face multi-billion-dollar deficits after the next election tied in part to legacy debt costs amassed over eight decades, the new budget would leave Connecticut with $1.1 billion in its emergency reserves.

The budget boosts General Fund spending about 1.6 percent over the adopted budget for the current fiscal year, and is 1.1 percent higher than the preliminary 2018-19 budget lawmakers adopted last October.

The budget also calls for further study on some of the recommendations made by the CEO-led Commission on Fiscal Stability and Economic Growth. Legislators ordered the creation of several new panels to study spending reductions, teachers retirement system reform, and tax rebalancing -- with all three reports due next year.

Meantime, Andrew Markowski, state director of the National Federation of Independent Business, commended lawmakers for rejecting efforts to add new employer mandates, including a higher minimum wage and paid family medical leave.

There were serious efforts during the session to raise Connecticut's $10.10 minimum wage to $15 over a period of years.

"Small-business owners told us they were very worried they would be forced to scale back and cut employee hours or jobs if faced with costly mandates of expanded leave and higher base wages," Markowski said. "NFIB's state director in Connecticut. "Many of our members wrote their lawmakers about the potential consequences of those bills, including the negative impact on their workers, and the state economy. Thankfully, their voices were heard."

CT Mirror staff reports were included in this story.

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