Hartford Business Journal

11 HARTFORDBUSINESS.COM | May 23, 2022 The 2022 legislative session ended May 4. Lawmakers will reconvene in January after an important election season this fall. HBJ FILE PHOTO Tax-relief measures included in recently adopted $24.2 billion state budget • Restores property tax credit eligibility for individuals 65-plus to current income limits of $109,500 for single filers and $130,500 for joint filers; budget also increases the credit from $200 to $300. • Accelerates the phased exemption of pensions and annuities from the income tax from 2025 to 2022. Single filers with adjusted gross incomes below $75,000 and joint filers with less than $100,000 qualify. • Lowers the cap on motor vehicle property taxes to 32.46 mills and reimburses local governments $100 million for the projected loss in revenue. • Expands the 50% tax credit for employers that pay up to $5,250 toward an employee's Connecticut Higher Education Supplemental Loan Authority student loans. • Extends the suspension of the 25-cents-per-gallon state gas tax until November 30. • Provides a $250-per-child tax credit, capped at three children per household. The credit is reduced by a certain percentage based on the filer's income. • Allows pass-through entities to take advantage of the manufacturing apprenticeship tax credit. • Provides $40 million of relief for federal unemployment debt. Source: Connecticut Business & Industry Association We can do something on the gift tax, that's a barrier for entry in terms of businesses thinking about succession planning, or maybe people who are at the end of their careers thinking about where they want to live when they retire. If you have an inheritance, the gift tax can be a barrier to entry. We have to make the state more affordable to all classes of wealth in Connecticut. We don't need to be the lowest-cost state in the country, but we at least need to be more middle of the road when it comes to the income estate and property taxes. Q. Where does CBIA stand on efforts to build more affordable housing in the state? A. This is an issue we are going to be increasingly involved in. We had conversations with some of the coalitions this year and last year. The challenge is a one-size-fits-all reform. It doesn't necessarily work because our towns are so unique and somewhat siloed. But we need to make housing more affordable. We need more worker housing. We need affordable housing for more lower-income folks who can come into the state and work and be productive. We also need more transit-oriented housing around bus and train stations because, especially for the younger generations, they don't necessarily want to come to this state, buy a car and pay property taxes on it, when they can use other state's public transportation systems to get to work. So, we are going to be more aggressive on worker and transit housing priorities come next budget session. Q. So, what is one solution to affordable housing? A. There has been a lot of discussion around transit-oriented housing. The problem with some of the proposals is they allow the state to impose eminent domain around the surrounding business communities. The last thing we want is someone telling a gas station right next to the bus station, 'hey you have to get up and leave because we are going to put housing right there.' We want it in a way that is fair, that is not going to disrupt the current business ecosystem that is in place. We are interested in focusing more on driving our cities and towns to have incentives for transit-oriented housing. Q. During the session the legislature agreed to set aside $3.5 billion to pay down the state's long-term pension liabilities. Was this a good move? A. I think the pension payment was the biggest win of the session. The pension liabilities are still huge, but it's a good number to pay down. However, I do think we could have used a little bit of that money for business tax relief. Q. Why did the captive audience bill get so much attention? A. It was the top priority of organized labor, we heard that coming into the session. It got a lot of attention from the CBIA because we've been fighting it for a decade. We know that it is clearly unconstitutional and it's concerning that lawmakers, many of whom are lawyers, would pass a bill that is literally unconstitutional. It has a lot of national attention too. The U.S. Chamber of Commerce, National Association of Manufacturers and Business Roundtable have all reached out to us saying they are watching this because it sets a national precedent. Other states have tried this and it got overturned in court. (Oregon is currently the only U.S. state with captive audience legislation in place and it has faced legal challenges. Wisconsin previously passed a captive audience law, but later rescinded it.) That's not the kind of attention we want our state attracting as we try to recover the economy. Q. Will the CBIA be a party to a lawsuit over the captive audience bill? A. We have done a lot of due diligence around potential litigation. It looks like we have standing ourselves to bring litigation. We have a lot of national support with some law firms reaching out to us about this. It is something we will seriously consider. Q. Did the legislature in your mind make any headway in helping tackle the labor shortage? A. There were some good policies that passed, including increased funding for training and workforce development. We were focused on legislation that aimed to help ex- offenders get jobs out of prison. There was some good legislation passed there, including a program that will get [incarcerated individuals] training and a commercial driver's license while they are still in prison so they have the ability to get a job when they get out. There was also additional funding for child care to help single parents and dual-income households get back into the workforce. Pass- through entities are also now eligible for the manufacturing apprenticeship tax credit. Q. Coming out of the session, how would you characterize CBIA's relationship with the legislature? A. We had to push hard this legislative session. We are always going to have open debates with those who don't necessarily see our position, and at the end of that we are going to agree to disagree, shake hands and work with them the next time around. So, while we are disappointed and some folks were maybe too focused on the election and not necessarily on the current workforce crisis we have in the state, we are going to go back and work with them during the summer and next session. We still have a good relationship with the governor's office. Q. Where do you think the economy is headed for the rest of 2022? A. This is the concern. The economy is everything we advocate for in the legislative session. I'm hopeful that I'm wrong and the economy will do better than it has been doing, but when you look at GDP growth, we were 36th in the country in 2021, not even middle of the pack. Personal income growth continues to lag. We know about the workforce crisis, we have 109,000 job openings. Our workforce has shrunk by 73,000 people, which represents 41% of the U.S. workforce shrinkage. That is staggering to think about when Connecticut represents just 1% of the population. GDP did grow 12th best in the fourth quarter of 2021, so maybe that is a springboard that will help propel us this year, but I'm concerned that we have some real headwinds, including inflation and supply chain issues. I'm hopeful the economy grows, but I have my doubts. On The Record

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