Hartford Business Journal

6 Hartford Business Journal • May 9, 2016 www.HartfordBusiness.com TOP STORY Businesses likely to avoid new state tax hikes Democratic House and Senate leaders and Gov. Dannel P. Malloy agreed last week on a fiscal 2017 budget that closes a $960 million funding gap largely through spending cuts and no tax increases, but they failed to pass the budget before the end of their May 4 deadline. Lawmakers will hold a special session to vote on the budget. House and Senate Democrats said they delayed the vote to give lawmakers more time to study the budget hatched in the final 36 hours of the session. Malloy warned them not to use it as a tactic to avoid tough choices. Democrats announced late May 3 that they reached a budget agreement with Malloy that includes $830 million in cuts. They also said the plan contains $36 million in transfers from various funds, but no increases to taxes or fees. Democrats also abandoned their proposal for tax-credit deferrals, a plan that would have allowed businesses to voluntarily pay increased taxes next year, with an increased benefit for tax credits two years later. (Journal Inquirer contributed to this report) ENERGY & UTILITIES CT electric rates to drop in July Standard service rates billed to businesses and residents by Connecticut's two electric utilities will drop several cents starting July 1. Eversource rates will fall from 9.56 cents per kilowatt hour to 6.61 cents for the "summer-cycle" period, which runs from July to December. The utility, which has the largest territory in the state, charged 8.23 cents during the 2015 summer cycle. Eversource said in a statement that the newly approved rate is its lowest since 2004, and that it will translate to a decrease of $21 in the average customer's monthly bill. Meanwhile, United Illuminating, which is now owned by Avangrid, will charge 8.02 cents, down from 10.74 cents in the first half of this year and 9.12 cents in the 2015 summer cycle. The approved rates are related to electricity generation — charges that com- prise approximately 40 percent of an average customer's electricity bill, accord- ing to the Public Utilities Regulatory Authority. M&A Newington grocery supply co. to be acquired New Hampshire-based C&S Wholesale Grocers has signed an agreement to acquire Newington's Davidson Specialty Foods. No financial details were re- leased for the sale, which is expected to close in June. Davidson Specialty Foods provides direct-store delivery services for over 6,000 specialty, kosher and ethnic products to independent and chain retailers across New England and the New York metropolitan area. Davidson is the larg- est specialty distributor in New England. Current owner-operators, Bob Rowe and Jim Rowe, will continue to manage the day-to-day operations. C&S Wholesale Grocers, based in Keene, N.H., is the largest wholesale gro- cery supply company in the U.S. It services customers of all sizes, supplying approximately 6,500 independent supermarkets, chain stores, military bases and institutions with over 170,000 different products. ECONOMY & LABOR Report outlines changing face of CT employment A new report issued by the state Department of Labor shows Connecticut has transitioned since the recession from its top job sector being trade, transporta- tion and utilities to education and health services. The education and health-services sector, which was the only industry to add jobs during the recession, now accounts for almost 1 in 5 Connecticut jobs, ac- cording to the April issue of The Connecticut Economic Digest. While the trade, transportation and utilities sector is no longer No. 1, it's the goods-producing sector that saw the largest drop in employment since 2008. Jobs in that sector accounted for 13 percent of the Connecticut labor force in 2015, down from 14.9 percent in 2008. The report also showed Connecticut has regained 76.7 percent of the jobs it lost in the recession. The state is on par with Maine (79.5 percent) and Rhode Is- land (87.9 percent), but still has a way to go to reach the levels of New York (259.1 percent) and Massachusetts (245.6 percent). HARTFORD Hartford issues pink slips Hartford Mayor Luke Bronin's administration issued approximately 40 layoff no- tices last week across multiple city departments, his spokesman confirmed. The pink slips aren't much of a surprise, as Bronin's proposed budget for the fiscal year that begins July 1, which has not yet been approved by the city council, calls for 42 layoffs. Combined with retirements and elimination of vacant positions, the total position cuts reach 96. "Of the difficult decisions that need to be made to deal with our budget crisis, the toughest by far is the decision to eliminate a hardworking employee's job," Bronin said in a statement. Bronin's spokesman Brett Broesder said the cuts would help close a $10 million deficit this fiscal year and a $48.5 million deficit projected for next year. GOVERNMENT, POLITICS & LAW New retirement program squeaks by in Senate Legislation creating a state-run retirement- savings program serv- ing nearly 600,000 pri- vate-sector workers in Connecticut squeaked through the state Sen- ate and is on its way to the governor for action. Lt. Gov. Nancy Wyman needed to break an 18- 18 tie on the measure. The legislation, which aims to serve individu- als who currently lack access to workplace-based retirement savings, had previously passed the House. The bill creates a new quasi-public entity responsible for implementing a retirement-savings program through contracts with private-sector providers. The proposed program would not be mandatory for businesses that currently offer a 401(k) plan or other workplace-based savings option to its employees. Bill tightens oversight on state biz incentives On the last day of session, the state Senate approved stronger oversight of economic-development and job-creation programs. The bill, which previously passed the House, now goes to Gov. Dannel Malloy for action. The legislation shifts the responsibility for preparing the three-year evalu- ation of the state's business recruitment and retention tax credits and abate- ments from the state Department of Economic and Community Development (DECD) to the Program Review and Investigation Committee. The new law would also change the report's scope, and requires the appro- priations and finance committees to hold one or more public hearings on the report. The changeover will happen in 2017. BANKING & FINANCE Bradley bond ratings improve Climbing passenger traffic and expanded domestic and overseas air service at Connecticut's Bradley International Airport has gotten the attention of at least one national credit-rating agency. The Connecticut Airport Authority (CAA) announced that Standard & Poor's Global Ratings boosted its ratings for Bradley's $123 million outstanding issue of general airport revenue refunding bonds series 2011A and 2011B to A from A-. S&P also lifted its underlying ratings on Bradley's $31 million outstanding issue of special obligation parking revenue bonds to BBB- from BB, CAA Chair Mary Ellen Jones said in a statement. The outlook for both remains stable. CAA Executive Director Kevin Dillon told the Hartford Business Journal both upgrades reflect the airport's overall fiscal health as well as positive trends underway at Bradley for growing passenger counts and air routes. The airport's liquidity position, improvements in debt-service coverage, air- line diversity, good origin and destination market area, diverse service area economy, and an increasing number of enplanements and positive trends all contributed to the credit upgrade, S&P said. BY THE NUMBERS $3B The decline in quarterly earnings reported by the state's 50 largest taxpayers this spring, which resulted in a $217 million hit to the state budget. $559.4M The total shortfall in income tax receipts Connecticut has estimated for fiscal year 2016, which is 5.7 percent below the original budget plan. 20% The percentage of jobs in Connecticut's workforce that are in the education and health-services sector. 6.61 cents The per kilowatt hour standard service rate Eversource will charge Connecticut electric customers this summer, down from the current 9.56 cents rate, which will translate to $21 in monthly savings for the average customer. TOP 5 MOST READ on HartfordBusiness.com ■ Closed New Britain organic farm gets second life ■ If it gets it way, Tesla promises major CT distribution center ■ CT electric rates to drop in July ■ Budget woes worsen as session deadline looms ■ $100M gap between governor, legislature 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, CT Health Care Weekly www.HartfordBusiness.com/subscribe WEEK IN REVIEW Members of the state House of Representatives didn't get a chance to pass a budget before their May 4 deadline. P H O T O | C O N T R I B U T E D P H O T O | H B J F I L E

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