Hartford Business Journal

HARTFORDBUSINESS.COM | MARCH 9, 2026 9 POLITICS & POLICY legislators that seek to increase taxes on the wealthy, including a bill that proposes increasing the top marginal tax rate by 1 percentage point to 7.99%. "What makes us competitive is that we're slightly less than Massachusetts and New York," he said of the state's current top tax rate at 6.99%. Before raising that rate, he said, legis- lators and the governor should "make sure they have the data and the metrics to support that." Asked about Massachusetts imposing a 4% surtax on millionaires, which it did in 2022 and has raised $2 billion annually since, Boughton said the claims that the wealthy have not abandoned that state were premature. He said the tax was imposed midyear, so any millionaire in Massa- chusetts was "stuck with it." "These new years that it's been in play, they are starting to see an out-mi- gration of taxpayers," he said. More importantly, Boughton said, Connecticut's own data already show movement among high earners. DRS' forthcoming Tax Incidence report will indicate that "top decile people" are leaving the state, even without an increase in Connecticut's top marginal tax rate. "So we've got to be careful about how we do this," Boughton said. Tax collection Though policy discussions with the governor are part of his job, Boughton says tax collection is the biggest role DRS plays. Last year, he noted, DRS prevented $15 million in fraudulent refunds. He said artificial intelligence was able to help the agency determine when indi- viduals filed "10 different forms under 10 different Social Security numbers, and we were able to stop those checks from going out." "That's where something like AI can be a real blessing," he said. His agency is currently working on how to address the "tax gap" — the roughly $2.5 billion in tax payments that have not been made. Despite the agency's best collection efforts, there's still about $800 million uncollected at the end of the fiscal year, he said. To address that, DRS created a "small cash business team" that works with owners of small, mostly cash-payment businesses to help them comply with tax rules. "They've probably recovered $10 million or $11 million so far," Boughton said. DRS also is developing a taxpayer app for small businesses to make it easier to deal with daily tax rules, such as filing sales-and-use tax receipts. There is no target launch date for that, he said. DRS will also soon launch the pathway to compliance amnesty program that will waive the principal and interest for businesses that have not paid taxes, but only for their first offense. "Those are the kinds of things I think government can do to close the tax gap," Boughton said, "because we're going to collect more revenue and make it easier to create more taxpayers." Funding Portfolio These companies have received the largest investments from the Connecticut Bioscience Innovation Fund. COMPANY HQ CI FUNDING VeraDermics Inc. New Haven $8.6M Wellinks–Convexity Scientific Inc. Fairfield $4.3M Enko Chem Inc. Mystic $3.8M Azitra Inc. Branford $3.3M Simcha Therapeutics Inc. New Haven $3.2M Tangen Biosciences Inc. Branford $3.1M Torigen Pharmaceuticals Inc. Farmington $3M Rallybio Corp. New Haven $2.9M Source: Connecticut Innovations With nearly $125M invested, bill proposes $25M boost for CT Bioscience Innovation Fund maintain its pace of investments. "To continue investing in the vital sector of bioscience companies, we would greatly benefit from the legis- lative support of an additional $25 million," she said. Growth Industry Connecticut's bioscience sector is widely viewed by economic development officials as a strategic growth industry. According to the Connecticut Business & Industry Association, the state's life sciences "ecosystem" includes more than 1,500 companies employing over 25,000 people, supported in part by research institutions such as Yale Univer- sity and the University of Connecticut. Of the 106 firms that have received investments from the bioscience fund, 89 are based in Connecticut. The fund has supported companies across seven of the state's eight counties, including 51 in New Haven County and 15 in Hartford County. Thirty-six of the funded firms are located in the city of New Haven. The remaining companies that received Jodie Gillon Lauren Carmody By David Krechevsky davidk@hartfordbusiness.com W ith the Connecticut Biosci- ence Innovation Fund (CBIF) having already deployed well beyond half of its original capital allocation, lawmakers are considering whether to replenish the state's primary life sciences investment vehicle. Senate Bill 31 proposes a $25 million increase in bond authorization for the fund, which has invested nearly $125 million since 2013 and retains roughly $60 million, according to Connecticut Innovations, the state's quasi-public investment authority that administers the program. The fund is designed to help early-stage bioscience companies bring new technologies to market and expand operations in Connecticut. Supporters argue additional funding would help sustain investment activity in a sector viewed as a key driver of Connecticut's innovation economy. Since it was established in July 2013, the $200 million fund has backed 106 bioscience startups and firms that invest in early-stage companies, according to CI. The agency added that $15 million from the fund was also used for grants during its early years, but that halted in 2016. "We don't do grant funding through CBIF anymore," said Lauren Carmody, CI's chief marketing officer. "We do only investments." Carmody said the program has produced a number of successful investments, citing New Haven-based companies VeraDermics Inc. and Halda Therapeutics as examples. VeraDermics, which is developing an oral therapy for hair loss and has received an $8.6 million investment from the CBIF, recently had a successful initial public offering, raising $256 million. Halda Therapeutics, which received a nearly $2.5 million investment from the fund, was acquired last year by Johnson & Johnson for $3 billion. "These investments have demon- strated the significant impact our funding can provide, especially at an early stage," Carmody said, adding that any returns on CBIF investments are placed back in the fund. More funding Senate Bill 31 was introduced in February by Sen. Tony Hwang (R-Fair- field). The measure was raised by the Commerce Committee and later referred to the Finance, Revenue and Bonding Committee, where Hwang serves as a member. Hwang did not respond to several requests for comment about the bill, including why he is serving as its primary sponsor. The bioscience sector does have a measurable presence in his district: Of the 106 firms that have received investments from the fund, 16 are located in Fairfield County. Carmody said additional capital would help Connecticut Innovations investments — including several financial firms that invest in bioscience startups — are based outside Connecticut but agreed to invest in or establish a pres- ence in the state, Carmody said. She added that some of the compa- nies that received investments later failed, which is one of the risks of investing in bioscience startups. As the fund's portfolio grows and lawmakers weigh additional borrowing authority, Connecticut Innovations' oversight practices have drawn scru- tiny. A recent state audit covering fiscal years 2023 and 2024 found CI did not sufficiently monitor whether compa- nies receiving financial assistance were complying with job-retention and Connecticut presence requirements tied to their funding agreements. CI agreed with the findings and said it would expand its use of independent employment verification. 'Major contributor' Jodie Gillon, president and CEO of BioCT, a trade group that represents the state's life sciences industry, says the legislature needs to continue its support for the sector. "The Connecticut bioscience sector is a major contributor to Connecticut's GDP, as well as to its highly skilled workforce," she said. The state can continue to emerge "as a global leader" if the legislature provides "favorable policies and incentives" to mitigate federal funding headwinds and competitive pressures from neighboring states, Gillon said. Proposals like Senate Bill 31, she added "are an important tool in a broader toolkit to ensure that we are making investments in this state to catalyze this sector — a sector that brings innovation to patients around the world."

• Cover