Hartford Business Journal

16 HARTFORDBUSINESS.COM | JULY 28, 2025 SE RIES | CT'S ECONOMIC COMPE TITIVENES S but says disparities between the ease of permitting in other states and Connecticut remain. "When we talk to employers who have operations in multiple states, there are certain permits, environ- mental permits, that are more diffi- cult in Connecticut, but also in terms of the clarity around permits," said Dustin Nord, director of the CBIA Foundation for Economic Growth and Opportunity, the business group's nonprofit think tank. "To the credit of the state, I think that this has been a point of focus for DEEP in terms of making certain permit timelines more clear and trying to speed up permit- ting overall. But it's still a challenge for a lot of businesses." Some argue that regulatory reforms within DEEP need to go beyond just speeding up permitting processes. Carol Platt Liebau, president of the Yankee Institute for Public Policy, a conservative think tank, said lawmakers and regulators must do a better job of performing a cost-benefit analysis of regulations they are imposing on residents and businesses. She said lawmakers must also have greater oversight over how agencies are implementing public policy. "Without the proper accountability, PURA and DEEP have been able to implement flawed policies, mostly expensive and stringent green energy mandates, which have driven up energy costs for ratepayers," Liebau said, noting that Connecticut has among the highest electricity prices in the country. "… Regulators justify their existence by regulating," she added. "When all you have is a hammer, everything looks like a nail." State lawmakers did consider a bill this past legislative session that would have mandated closer scrutiny on existing regulations. Rep. Lucy Dathan (D-New Canaan) proposed a bill that required all state regulations to be reviewed every seven years to make sure busi- nesses were not facing any outdated laws that no longer make sense, or are unnecessarily burdensome. The bill passed the state House of Representatives, but was not voted on by the Senate. The CBIA said it will lobby for the legislation again in 2026. More to be done While Connecticut is working to improve its environmental permitting processes, the reality is, the state's broader regulatory apparatus affects a much wider range of industries, and impacts businesses and the economy in many ways. The state, for example, has been known to have one of highest number of health benefit mandates that insurance companies are required to cover, which increases the costs of individual and employer-sponsored health insurance — a major issue for small and midsize companies. A 2014 study by UConn Health's Center for Public Health and Health Policy noted Connecticut had 46 health benefit mandates at the time, among the most in the nation. A more recent analysis by the state's nonpar- tisan Office of Legislative Research outlined more than 70 health benefit mandates that were in effect as of Jan. 1, 2024. The report noted recently adopted coverage mandates for infertility diagnosis and treatment, and in-home hospice services. There is also an annual fight in the legislature over new labor mandates. In recent years, Connecticut has adopted a Paid Family and Medical Leave program and expanded its paid sick leave law. Lawmakers have also expanded prevailing wage requirements and fought for things like eliminating the tipped minimum wage and extending unemployment benefits to striking workers. CBIA has identified areas in which Connecticut can improve the regulatory strain on businesses, particularly in the manufacturing and construction industries. "Manufacturers, especially, face a heavy burden on regulations, whether it be environmental regulations or labor mandates, things that really make it difficult for them to compete, both nationally and, quite frankly, for a lot of these manufacturers, interna- tionally," Davis said. The CATO Institute, a conserva- tive think tank, consistently ranks Connecticut among the worst states in the country for land-use regulations. Because zoning requirements can vary widely from one town to another, existing Connecticut businesses face obstacles even when expanding within the state, Davis said. However, efforts by the General Assembly to ease land-use regula- tions in local communities often face political backlash. In June, Lamont vetoed House Bill 5002, a major piece of legislation that aimed to address the state's ongoing housing shortage. The bill would have required towns to plan and zone for a set number of affordable housing units, using a "fair share" formula to distribute housing needs across municipalities. Lamont, a Democrat, broke with his own party in quashing the legislation, citing opposition centered around fears that the bill would undermine local zoning control. Fred Carstensen, a professor of economics at UConn, said the state needs to look at its regulatory environment, such as restrictions on building new housing, that have led to a housing crisis. "I think sort of a comprehensive attempt to look at regulatory structure would be immensely beneficial, and it could help make us much more competitive," Carstensen said. "… And you've got to do this at the granular level. You got to do it, look at each of these things closely, and you have to do it all the time." HBJ Staff Writer Michael Juliano contributed to this story. Overregulation Continued from page 27 Lucy Dathan Carol Platt Liebau Fred Carstensen JUMP FOR JOY! NOMINATIONS ARE NOW OPEN! NOMINATE TODAY DEADLINE 10/3 | SCAN HERE Note: The rankings are from CNBC's 2025 'America's Top States for Business' index. According to CNBC, business friendliness is measured by each state's lawsuit and liability climates, regulatory regimes covering areas such as trade and labor, as well as overall bureaucracy. BUSINESS-FRIENDLINESS RANK America's Top Business-Friendly States 2025 1 2 3 4 7 35 5 10 6 8 8 1 NORTH DAKOTA 2 SOUTH DAKOTA 3 TENNESSEE 4 NORTH CAROLINA 5 INDIANA 6 NEW HAMPSHIRE 7 VIRGINIA 8 NEBRASKA 8 KANSAS 10 UTAH 35 CONNECTICUT

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