Hartford Business Journal

8 Hartford Business Journal • January 12, 2015 www.HartfordBusiness.com Q&A Taxes, regulation, energy costs top concerns for CT biz Q&A talks about what small busi- nesses want from the state leg- islature this session with Andy Markowski, state director of the National Federation of Indepen- dent Business in Connecticut. Q: With the General Assembly back in ses- sion what are some of the major issues the National Federation of Inde- pendent Business is going to make a priority? A: The No. 1 issue on small business owners' minds is the overall state fiscal situ- ation, specifically, the state budget and taxes. Economic uncertainty is one of the leading concerns of our mem- bers because without a solid basis to form a budget for the future, small business owners cannot make sweep- ing changes for staff- ing or benefits if they don't know how much they're going to pay in taxes from one year to the next. It is imperative to owners that spending at the state level stabi- lize first so the General Assembly can then turn their focus in the long term to reforming taxes and making Connecticut an environ- ment conducive to growth for the small-business sector. But before we get to the long term, we all have to focus on the short term. And for small businesses in Connecticut, that means a new state budget that is balanced, fis- cally responsible without undue borrowing, and most impor- tantly, does not contain new or increased taxes. Q: The jobs numbers for Connecticut have been improv- ing lately, but what do you think the state legislature needs to do to get employment numbers back to pre-recession levels? A: If the legislature would like to see our employment numbers mirror pre-recession levels, the best way to achieve that, and quickly, is to stop enacting new mandates on employers so that they can properly plan for the future and make well-informed hiring deci- sions. Furthermore, anything the legislature can do to free up more money for consumer and business-to-business spending (i.e. lowering costs of health care, energy, etc.) would be very welcome. Q: Speaking of unemploy- ment, what should be done to improve unemployment insurance costs in Connecti- cut? They're the highest in the nation as of Jan. 1. What could fix that from your perspective? A: Overall economic conditions help drive unemployment insur- ance costs, but Connecticut needs to look at reforming and restruc- turing benefit payouts as well. While the state Department of Labor has made some headway in rooting out fraud and overpay- ments, it's incumbent upon the legislature to pass loftier reform. Simple changes like mandating those col- lecting unemployment to indicate where they are applying for jobs will help cut down fraud and costs, which will result in small businesses feeling some relief. And while it is fiscally responsi- ble for the state to pay down the unemploy- ment fund debt, this cannot come on the backs of small employers through additional surcharges and higher taxes. Q: How does the state go about fixing its transporta- tion infrastructure without burdensome gas tax increases and other new levies? A: Thankfully, the price of gas has decreased, which has been a help to small business owners across the state. In order to improve our infrastructure, the state must start by budgeting responsibly. If funds are dedicated for transpor- tation, the opportunity should not exist to divert them away from improving our roads and bridges. In the past, we have heard from our members that they are against reinstating tolls and we anticipate that if a toll hike is attempted in the near future, sup- port will be mixed, at best. Q: There's a perception, rightly or wrongly, that Con- necticut is a difficult environ- ment for business because of its regulatory climate. How can the state become more business friendly? Are there changes NFIB will push for? A: It would truly be a change if the legislature could, at the very least, leave things the way they are. We hear over and over from small Andy MArkowski state director of the national Federation of independent Business in Connecticut Continued Businesses wary of highway tolls By Brad kane bkane@HartfordBusiness.com W ith or without a lock box, Connecticut business- es don't have a lot of faith in state government. Gov. Dannel P. Malloy and the legislature have seized on the idea of using state highway tolls to help pay for underfunded transportation infrastruc- ture. If all sides hash out the details of a proposal they already agree on in principle, tolls in Connecticut could be a reality by the end of the legislative session, which started Wednesday. The business community, however, is extremely wary of what government ultimately will do with this new revenue, said Eric Gjede, a lobbyist for the Connecticut Business & Industry Association. While the money is supposed to be earmarked for transportation infrastructure improvements, the state has a history of real- locating money to shore up defi- cits and fund other projects. The gross receipts tax, for example — one of the two taxes levied on the sale of gasoline — was set up in 1991 to provide insurance against fuel spills at gas stations. But, the state raided that fund so many times to cover deficiencies elsewhere in the budget that the insurance program was discontinued in 2012, leaving gas stations to pay for cleanups out-of-pocket. The gross receipts tax, however, is still in place. "If you are going to impose something new like tolls on the people and businesses of Connecticut, they need to have confidence that it is going to be used for transportation proj- ects and not diverted for other expenses," Gjede said. Malloy has said he would only support tolls if the legislature passed a law saying transportation revenue would not be diverted for other purposes, a so-called lock-box provision. However, of the 23 other states with similar lock boxes, 17 still have found ways around the law, through practices as simple as diverting transpor- tation funds not covered under the lock box to other non-transportation programs. Connecticut businesses have mixed feelings on tolls anyway, Gjede said. They will hurt delivery and logis- tics companies, but the state's crumbling transportation infrastructure and highway congestion are CBIA mem- bers' top concerns. "We need dollars in our transportation fund to allevi- ate that," Gjede said. "Transportation infrastructure is critical to everybody in this state." House Speaker Brendan Sharkey (D-Hamden) said tolls will be given serious consideration this session. Because motorists are using fuel more efficiently, collections of the state and federal gas taxes have declined, eroding the main source of funding for transportation projects. "Our transportation infrastructure is holding back our economic development," Sharkey said. If tolls are adopted, Connecticut should be able to afford reducing its taxes on gasoline, which are the third highest in the nation, Sharkey said. "The creation of tolls has to come with a correspond- ing reduction in the gas tax, and a commitment to use the money for transportation infrastructure improve- ments," Sharkey said. "We can't use these revenues to balance the budget." Connecticut had tolls on its highways until 1983 when a tractor-trailer rammed four cars at the Stratford toll plaza on I-95, causing an explosion and killing seven people. Any new tolls would use tech- nology so motorists wouldn't have to stop on the highway, said House Majority Leader Joe Aresimowicz (D-Berlin). Toll states like Florida and New Jer- sey have readers where motor- ists don't have to slow down. Other plate-recognition technol- ogy could be used, where motorists don't pay a toll but are sent a bill in the mail. "Gov. Malloy signaled he wants to leave a legacy of transportation improvements," Aresimowicz said. "This is a way we can effectively pay for the transportation infrastructure we need in this state." Although tolls will be a hot topic during the session, the No. 1 issue will be the upcoming two-year budget, which has a projected $1.3 billion deficit for its first year. Most of that discussion will start after Malloy gives his budget speech in February. "I'm hoping we can sit down and talk with the leader- ship on both sides of the aisle and figure out the best way to approach this situation," said Senate Minority Leader Len Fasano (R-North Haven). "We tax too much, we bor- row too much, and we are not living within our means." Sharkey said he favors making cuts to local govern- ment spending by regionalizing services like education. The legislature this session also will seriously con- sider a proposal to cap the basic utility connection fee at $10, said Aresimowicz. The issue came up during the last rate case for Berlin electric utility Connecticut Light & Power, where the utility asked for the basic connec- tion fee — which customers are charged to hook up to the grid, regardless of how much power they use — to increase from $16 to $25.50. Regulators eventually awarded an increase to $19.25. "Capping that fee is a logical step we should take this session," Aresimowicz said. Rather than imposing more regulation on the utility, Fasano said the legislature should do more to cut utili- ties' expenses, including reducing the amount of costly renewable energy they are required to purchase. n Eric Gjede, lobbyist, Connecticut Business & industry Association House speaker Brendan sharkey (d-Hamden) (Left) Connecticut department of Transportation adopted a new rapid bridge replacement technique to minimize road closures and keep projects on schedule and on budget. (right) Congestion remains a major issue for Connecticut businesses, hindering production and economic development. P H O T O s | H B J F i l e Focus StAte Government

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