News From the Capitol / Sen. Toni Boucher
The best social program is a job
Published 1:04 am, Thursday, April 29, 2010
It has been said that the best social program is a job. With Connecticut's unemployment rate increasing to 9.2 percent, reestablishing a fertile environment for job creation is essential to restoring prosperity to our state. Furthermore, it is people, not government, who create new jobs.
However, the General Assembly's Finance Committee spent its last day of work for this legislative session passing several bills that sent a hostile message to Connecticut's business community. Among other things, these proposals call for:
"¢ Raising the estate tax rate to between 14.8 percent and 20 percent, thus increasing taxes by $9 million this fiscal year and by $165 million next year.
"¢ Creating a 5.5 percent Hospital Provider Tax that would impose a $207 million annual tax increase on Connecticut hospitals.
"¢ Extending a soon-to-expire tax on electric bills for an additional 10 years, which would result in a $1.8 billion tax increase on electricity to pay off $1.3 billion in borrowing.
"¢ Requiring Connecticut-based corporations with out-of-state subsidiaries to pay taxes on its entire net income, instead of paying taxes only on what it makes from its holdings in this state.
"¢ Taxing the bonuses earned by those who work for companies that received TARP funding from the federal government -- but have paid the federal money back with interest. We would be the only state in the nation to do this.
I spoke and voted against these bills in committee -- and will do so again if they make it to the Senate floor. However, the mere fact that a powerful committee endorsed them will have a chilling effect on business owners considering expanding,
Case in point: A woman-owned bread company that started in a Wilton kitchen moved to a small commercial space and is now looking for much larger space and plans to employ up to 35 people. They may consider creating those jobs outside of Connecticut because of our unfriendly business climate. The legislature should be removing burdens from these employers, not adding to them.
Now for some good news. A competitively bid contract was recently awarded to upgrade and refurbish the rest stops along the Merritt Parkway (with guidance from the Merritt Parkway Conservancy) and I-95 over the next several years. There is no question that it would be impossible for the state to finance debt to make these necessary upgrades during these economic times. This contract is good news for Connecticut taxpayers as the new vendor has agreed to assume the considerable expense of renovating and making improvements to these rest stops -- an investment in our state that will create jobs during these difficult economic times without taxing residents further.
Another positive development -- With less than two months left in this fiscal year, an agreement was reached to reduce the current deficit. However, we still face an $800 million deficit beginning July 1, and a nearly $4 billion deficit for the following year.
Republican legislators presented several proposals to resolve the state budget issues we are facing:
"¢ $58 million in line item cuts lowering spending to 2009 levels;
"¢ $64 million in early retirement for state workers;
"¢ $10 million in state agency consolidations;
"¢ $6.4 million to shed state office leases;
"¢ $20 million in privatization of state functions;
"¢ $150 million in state worker concessions, including wage freezes, furloughs and health care adjustments;
"¢ $3.8 million in legislative pay cuts and the elimination of franked mail and travel.
This budget proposal also makes significant investments in job creation and retirement security:
"¢ Appropriates $200 million in previously cancelled contributions to state employee pensions;
"¢ Elimination of the Business Entity Tax to save companies $32 million;
"¢ Creation of the Small Business Revolving Loan Fund of $25 million;
"¢ Tax credits of up to $17.5 million will be available to companies that hire off unemployment rolls.
As we conclude this year's short session legislators must keep working to close this gap without more new taxes that will further erode job creation.
As always, I encourage you to share your thoughts and concerns with me. I can be reached at my legislative office in Hartford at 1-800-842-1421 or via e-mail to Toni.Boucher@cga.ct.gov.
State Sen. Toni Boucher covers the 26th district which includes New Canaan.