Hartford Business Journal

10 HARTFORDBUSINESS.COM | JUNE 26, 2023 On The Record | Q&A Connecticut Business & Industry Association President and CEO Chris DiPentima speaks at a CBIA event. PHOTO | CONTRIBUTED DiPentima: Despite lack of tax cuts, legislative session offers 'positives' for businesses By Greg Bordonaro gbordonaro@hartfordbusiness.com A year ago, despite a historic tax cut approved by the legis- lature and signed into law by Gov. Ned Lamont, the state's largest business lobby called the 2022 legis- lative session a disappointment due to a lack of tax relief for employers. Businesses during the 2023 legis- lative session also missed out on a significant tax cut, despite the state enjoying a more than billion-dollar projected surplus and $3.3 billion rainy day fund. Connecticut Business & Industry Association President and CEO Chris DiPentima said the lack of business tax cuts in the recently passed two-year, $51.1 billion budget is "baffling and frustrating," especially given the state's strong fiscal posi- tion, and bipartisan agreement on the need to grow the economy. Overall, however, he's got a more upbeat view on the 2023 legislative session, which included a significant income tax cut for residents, in addi- tion to key investments in housing, skills training and child care — all aimed at helping address the state's structural workforce shortages. "There were a lot of positives that came out of the session," DiPentima said in a recent interview. The biggest victory for businesses this year, DiPentima said, was lawmakers' decision to extend for five years state budget fiscal guardrails, which were adopted in 2017 to better control spending. The guardrails include spending and bonding caps that have been credited with turning around the state's fiscal condition, which was plagued last decade by deficits that led to numerous funding cuts and tax hikes. "They've given us fiscal stability and predictability, which is what busi- nesses want," DiPentima said of the fiscal guardrails. "And while it may tie some hands during the session, by limiting some of the spending, the business community doesn't feel that's a bad thing. We often survey businesses and one of the top things they recommend to the legislature is to continue to hold down spending, because when spending gets out of control, it ends up with tax increases on residents and businesses. And that's something that no one wants to see." The income tax cuts — which lower the 5% marginal income tax rate to 4.5%, and the 3% rate to 2% for income year 2024 — will also help reduce Connecticut's cost of living, which DiPentima said is crucial to growing the population and work- force, as the state looks to fill 104,000 job openings. Still, DiPentima said lawmakers' missed numerous opportunities to lower small business costs. The CBIA lobbied for several tax cut proposals, including restoring the pass-through entity tax credit, which would provide $60 million in relief shared by 123,000 small businesses, he said. CBIA also unsuccessfully lobbied for repeals of the 10% corporate tax surcharge and sales tax on workforce training; extending the net loss carry forward credit; and expanding the research and development tax credit to small businesses. DiPentima recently chatted with the Hartford Business Journal to reflect on the 2023 legislative session, which ended June 7. Here's what else he had to say. The Q&A was edited for length and clarity. Q. Why do you think businesses missed out on tax cuts two years in a row, despite some bipartisan support for them? A. I think sometimes our policy- makers think about the people who get them elected, and that's often residents. But our small businesses and large businesses are made up of residents as well, and lawmakers don't always equate the two together. For this session specifically, I was told that groups that were looking for increased investments were priori- tized over small business tax relief. If tax relief and stimulating the economy in Connecticut by lowering the cost of doing business is not a priority for policymakers, that is a CHRIS DIPENTIMA CEO Connecticut Business & Industry Association Education: Bachelor's degree, Boston College; law degree, Quinnipiac University School of Law Age: 51

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