Hartford Business Journal

6 Hartford Business Journal • November 2, 2015 www.HartfordBusiness.com WEEK IN REVIEW TOP STORY Malloy proposes biz tax cuts, state employee layoffs With few specifics on dollar savings, Gov. Dannel P. Malloy outlined to his commissioners last week a revised budget plan that includes restoring cuts to Connecticut's research and development tax credits and reducing the state's workforce by 500 employees. Malloy has proposed restoring the 70 percent usage of research and de- velopment tax credits, which the Democratic governor said is used by many of Connecticut's large employers including hospitals. What hasn't changed is the $64 million cut in Medicaid that state hospitals have been protesting. Malloy spokesman Devon Puglia said previous rescissions to the budget were not discussed at the cabinet meeting. Meantime, Malloy continues to be opposed to early-retirment incentives for state employees. He said the state needs to control future benefit costs through collective bargaining, particularly by avoiding retirement incentives. The governor is also proposing changes to the net operating loss tax and unitiary coproate tax that would provide some relief to Connecticut-based businesses. Malloy also said core services, including education, would be protected. No cutbacks will be made in engineers at the Department of Transportation or social workers at the Department of Children and Families, Malloy said. ECONOMY & LABOR Report: Half of CT biz owners will reach retirement age by 2027 By 2027, 47 percent of all Connecticut business owners are expected to be 55 or older, according to a new report, signaling a dramatic increase in ex- ecutives and entrepreneurs who will reach retirement age over the next 10-15 years. West Hartford accounting and consulting firm BlumShapiro and the University of Connecticut have released the first installment of a report called, "The Baby Boomer Effect." It examines the state's business landscape and the impact an aging generation is having on Connecticut. Among the reports other key findings: The rate of younger business "buyers" to older business "sellers," which 15 years ago was 2-1 in favor of buyers, has now dropped to a ratio of nearly 1-1, the report said. CT unemployment lags New England, mirrors nation Connecticut's unemployment rate of 5.2 percent is close to the national job- less rate of 5.1 percent. However, it lags behind all but one of the six New Eng- land states, according to figures from the Bureau of Labor Statistics. The only state with a higher unemployment rate is Rhode Island at 5.4 per- cent. However, that state has seen the largest drop in unemployment on a per- centage basis year over year. Overall, New England's unemployment rate was unchanged at 4.6 percent in September, the U.S. Bureau of Labor Statistics reported. Over the past year, all six New England states had statistically significant unemployment rate decreases. ENVIRONMENT Much of CT experiencing moderate drought Eighty-three percent of Connecticut is under "moderate drought" conditions, according to the federal government's U.S. Drought Monitor. Ranked just above "abnormally dry," moderate drought includes some crop damage, water shortages and low streams and reservoirs, and the request for voluntary water-use restrictions, according to Drought Watch, which is produced by the National Oceanic and Atmospheric Administration, the U.S. Department of Agriculture, and the University of Nebraska-Lincoln. As a result, Bridgeport public water supply company Aquarion, which has 625,000 Connecticut customers, requested last week that customers shut down their sprinklers and irrigation systems for the season. Aquarion said water demand is more than 12 percent higher than it was at the same time last year. ENERGY & UTILITIES Connecticut Water Co. has highest rates among residential providers A review of water rates by the Office of Consumer Counsel shows that five of the top 10 highest bills go to customers of Clinton-based Connecticut Water. Customers in Connecticut Water's Mansfield division, which covers Pilgrim Hills, Pinewood and Redwood Farms, have an average annual bill of $809.57. Connecticut Water's South Coventry division was second at $791.26. Its Mansfield division covering the rest of the town was third at $790.23. Custom- ers of Aquarion Water Co.'s Topstone area were fourth at $778.24. The Jewett City Water Co. rounded out the top five with an average charge of $771.91. The lowest water rates in the state were charged by the Heritage Village Water Co. Its customers were charged an average annual bill of $314.44, 15 percent below the next lowest price. MDC customers had an average annual bill of $405.29. The South Central Regional Water Authority charges its customers, on average, $569.32. EDUCATION UConn trustees told to expect possible cuts, tuition hike The UConn Board of Trustees financial affairs committee reviewed a presen- tation last week that calls for possible faculty cuts, tuition hikes and other re- ductions to help close a projected $40.2 million deficit in fiscal 2017. The tuition hike could be addressed by the full board before the semester ends. Scott Jordan, UConn's executive vice president for administration and chief financial officer, painted a grim picture for the trustees committee. He said the current $40.2 million projected deficit is expected to grow in light of the ongoing state budget woes. The university expects further cuts in the 2016 fiscal year. Jordan told the finance committee since the 2013 fiscal year, state funding has been $32.4 million less than mandatory salary and fringe benefit increases. In the 2016 fiscal year alone, the gap is $6.2 million. BANKING & FINANCE CT small business loans reach $238 million in 2015 U.S. Small Business Administration lending in Connecticut increased 19 per- cent in the federal government's 2015 fiscal year ending Sept. 30. There were 695 total SBA-backed loans in fiscal 2015 valued at $238 milion, compared 587 loans totaling $221 million in 2014. Fee savings in Connecticut for small businesses were just under $350,000 on loans made under $150,000. Lending to underserved communities increased by 17 percent over 2014 with 196 loans issued to minority businesses. The increase in the dollar and volume of loans indicates positive activity with- in Connecticut's financial industry as banks begin to take on more loans and small businesses are finding it easier to approach lenders, SBA officials said. MANUFACTURING Non-manufacturing employees see higher pay raises Non-manufacturing employers were more generous with raises in 2014- 2015 than their manufacturing counterparts, according to a study released last week. However, the tables are projected to turn in 2016. That's according to numbers from the 2015-2016 Salary & Budget Survey released by The Employers Association of the NorthEast. It said it polled close to 100 companies from Massachusetts, Connecticut and Rhode Island. Overall, manufacturing employers participating in the survey indicated em- ployees received an average raise of 2.7 percent for 2014-2015, while non- manufacturing participants averaged a 3 percent raise. The group's manufacturing participants project an overall 2.8 percent pay increase for 2016, while its non-manufacturing group forecasts a 2.6 percent pay increase. Companies reporting there would be no raises are factored into the overall numbers. Manufacturing executives saw the lowest pay increases among all segments of workers at 2.4 percent. Their counterparts in the non-manufacturing sector also received the lowest pay increases at 2.7 percent. BY THE NUMBERS 500 The number of state employee positions Gov. Dannel P. Malloy wants to cut to close the state's budget deficit. $809.57 The average annual bill paid by customers of Connecticut Water's Mansfield division, which is the highest in the state. $40.2M UConn's budget gap in the coming fiscal year, which could prompt a tuition increase and other measures. $238M The amount of U.S. Small Business Administration loans in Connecticut in fiscal year 2015, up 9 percent from a year earlier. TOP 5 MOST READ on HartfordBusiness.com ■ CT ranked second worst state for retirees ■ NB brass millworks being converted to apts. ■ Hartford's Capitol Center apartment conversion gets state backing ■ Hartford brewery launches new Naughty Nurse ■ UConn prof discovers gel that boosts solar panels, lowers cost STAY CONNECTED For breaking and daily Greater Hartford business news go to www.HartfordBusiness.com. HBJ on Twitter: @HartfordBiz HBJ on Facebook: www.facebook.com/HartfordBiz HBJ on LinkedIn: www.linkedin.com/company/ the-Hartford-Business-Journal Daily e-newsletters: HBJ Today, CT Morning Blend www.HartfordBusiness.com/subscribe Weekly e-newsletters: CT Green Guide Weekly www.HartfordBusiness.com/subscribe P H O T O | H B J F I L E Gov. Dannel P. Malloy is looking for bipartisan support to tackle the state budget deficit.

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