Hartford Business Journal

HARTFORDBUSINESS.COM | MAY 18, 2026 5 Politics & Policy House Minority Leader Vincent J. Candelora (left) and House Speaker Matt Ritter talking during the 2026 legislative session. Photo | Mark Pazniokas/CT Mirror Business groups see mixed results during 2026 legislative session Markowski said uncertainty surrounding the state's finances is a significant concern for small businesses. "Budgets keep small business owners up at night," he said. "One of the things they are looking at is what does the state budget picture look like? They want to make sure that we continue to adhere to sound budgeting policies so that we do not see tax increases in the future." Both groups also pointed to what lawmakers did not accomplish, partic- ularly around affordability. A proposal to exempt electricity and natural gas from the state sales tax for small businesses stalled. "That would have provided real savings in their pockets, on a cost driver that's not optional for them," Markowski said. A separate proposal to allow small businesses and nonprofits to pool employees to obtain lower-cost health insurance also failed again this session. The 'good' Despite the concerns, both organiza- tions pointed to several policy wins. Markowski highlighted a new tax credit for small businesses that reimburse employees for purchasing health insurance through Individual Coverage Health Reimbursement Arrangements, or ICHRAs. The credit, included in the budget, allows employers with fewer than 50 workers to receive up to $1,000 per employee annually. Markowski said the NFIB in Connecticut — which represents several thousand small businesses across a range of industries, typi- cally with 15 or fewer employees — supported the tax credit. Davis said a key victory for CBIA was extending the state's research and development tax credit to pass-through entities. Other positives included permitting reforms at the Department of Energy and Environmental Protection that aim to streamline reviews and shorten approval timelines. Lawmakers also approved creation of a small-busi- ness concierge program intended to help employers navigate the state permitting process. Separately, both groups pointed to workforce-related initiatives aimed at expanding career and technical education opportunities. The budget allocates funding for a new technical school in Windham County and $50 million for Vinal Tech- nical High School in Middletown. Still, business groups warned that Connecticut's longer-term workforce challenges remain a concern. CBIA said the state's labor force has declined by nearly 21,000 people over the past year, a trend it argues could make it harder for employers to expand and fill open positions. By David Krechevsky davidk@hartfordbusiness.com O fficials with two of the state's largest business organiza- tions say the 2026 legislative session delivered a mixed bag for Connecticut employers, with a combi- nation of policy wins, missed oppor- tunities and measures they say could hinder economic growth. Chris Davis, vice president of public policy for the Connecticut Business & Industry Association, and Andrew Markowski, state director for the National Federation of Independent Business, both described the session — which ended May 6 — as uneven in its impact on the state's business climate. "It appears that, in every major policy area, the legislature took one step forward, but then sort of three steps back," Davis said, adding that lawmakers "really put us in a situ- ation where electoral politics was chosen over good policy that will drive economic growth." He was referring to the short session taking place in an election year, with lawmakers facing a key vote in November. Markowski offered a similar assessment. "Overall, I would say it's a session that was not terrible, but there were a lot of missed opportunities," he said. The 'ugly' Both groups pointed to an omnibus bill passed early in the session as their biggest concern. The legislation (Senate Bill 298), approved through an emergency certifica- tion process, includes provisions aimed at protecting warehouse workers from quotas — placing new limits on productivity quotas and requiring employers to disclose them to workers. The U.S. Chamber of Commerce has said the measure makes Connecticut "the worst state" for warehouses. "Connecticut was a leader in transportation and distribution logistics," Davis said, calling it the fastest-growing part of the state's economy, according to the Connecticut Department of Labor. But he said the newly passed bill imposes what he described as "heavy- handed, first-in-the-nation restrictions" that CBIA and others believe could discourage future investment in the state. The bill was favored by labor advocates and Democratic lawmakers, who argued the measure was needed to protect workers from unsafe or unrealistic productivity quotas. Davis also criticized the process used to pass the legislation, arguing it lacked sufficient public input. Markowski noted some other proposed labor mandates opposed by business groups — including require- ments for advance work schedules and unemployment benefits for striking workers — did not pass. The 'bad' Davis said House Bill 5003, a work- force bill passed by both chambers, includes provisions that will increase the cost of doing business in the state, including measures that hold general contractors liable for unpaid wages owed by subcontractors and require certain service workers to be retained for 90 days after a contract changes hands. He also raised concerns about a budget provision requiring the Office of Policy and Management to develop a plan for a potential surcharge on businesses that generate gains from technology investments. The so-called "productivity surcharge" is a "terrible signal to the business community that Connecticut is not potentially a place to make those types of investments," Davis said. He also criticized budget provi- sions that decouple Connecticut from certain federal tax policies allowing businesses to immediately expense manufacturing investments, arguing the change could weaken the state's competitiveness for industrial expansion projects. The $28 billion state budget also drew concern, particularly changes to Connecticut's fiscal guardrails and reli- ance on one-time revenue measures. The guardrails are designed to limit spending growth and require excess revenue to be saved or used to pay down debt, but lawmakers approved exceptions to allow for additional spending in the new budget. Those changes "really set us up for potential fiscal instability in the out years," Davis said, arguing lawmakers may have weakened the state's long- term fiscal stability in order to increase spending now. Chris Davis Andrew Markowski

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