Hartford Business Journal

8 Hartford Business Journal • March 20, 2017 www.HartfordBusiness.com FOCUS GOVERNMENT having to do with running a busi- ness or starting a business," Republican State Sen. L. Scott Frantz, sponsor of S.B. 128 and co-chair of the Commerce Com- mittee, said of various Con- necticut rankings by magazines, think tanks and others. Those rankings, including ones put out by Forbes, CNBC and Chief Executive Magazine, often focus on taxes, fees and regulations, which some call onerous in Connecticut. Frantz said his proposal doesn't aim to exempt businesses from regulations that protect the life or safety of workers, or labor rules, but to figure out how more technically oriented rules could be handled to give new business- es time to transition into compli- ance over a couple years. While the bill doesn't pro- pose specific regulations to freeze or alter, Frantz said he'd like businesses and state agen- cies to offer suggestions for lawmakers to take up. The bill's supporters include the National Federation of Independent Business (NFIB), Yankee Institute for Public Policy and Home Builders & Remodelers Association of Connecticut Inc., the latter offering qualified support. Opponents include the state Department of Labor commissioner, state Insurance Department, Commis- sion on Human Rights and Opportunities and Connecti- cut Fund for the Environment. Democratic Commerce Committee co-Chair Joan Hartley could not be reached for comment. Scott Jackson, commissioner of the Department of Labor, testified that there are too many regulations protect- ing the state's workers that cannot be circumvented, includ- ing paying appropriate wages and following safety rules. "There are too many others to list, but we cannot support a bill that would put our workers' livelihoods in jeopardy," he told the committee. The Connecticut Fund for the Environment, in writ- ten testimony by staff attorney John Looney, said the bill could have enormous impacts on citizens and the environment and natural resources of Connecticut. "In an attempt to create a 'business friendly' atmo- sphere in Connecticut, the proposed bill does so to the detriment of the public health and safety," Looney wrote. Andy Markowski, National Federation of Indepen- dent Business state director, offered a different take. "This is exactly the type of legislation that NFIB and small business owners are encouraged to see the Gen- eral Assembly considering," Markowski said. "Far too often we are dealing with bills that send the wrong mes- sage, that create a first in the nation kind of mandate." The top complaints of NFIB's Connecticut members, the majority being businesses with 15 or fewer employ- ees, typically center around taxes and fees, Markowski said. Rolling back taxes and fees on new businesses, when they're most vulnerable to failure, is attractive, as is curtailing regulation. "Small business owners will tell you that their most valuable asset often is their time," of which they spend an inordinate amount trying to navigate often vague, confusing regulations, he said. According to a 2016 Connecticut Business and Indus- try Association (CBIA) small business survey, more than a third of the 331 respondents said state regula- tions are hampering their businesses and 60 percent characterized those rules as complex and vague. Meantime, the cost associated with complying with state regulations was the No. 1 challenge for 79 percent of businesses surveyed, CBIA said. Which regulations are most onerous depends on the industry, Markowski said. But among those he cited are the $250 business enti- ty tax assessed every other year "just for the privilege of being in business in Connecticut — and you pay that fee whether you are profitable or not," he said. He also hears complaints about unemployment assessments and regulations, particularly among new and small busi- nesses whose unemployment insurance costs increase, for example, as a result of an employee who may have to be fired for cause but ends up receiving unemployment benefits. Penalty relief The CBIA is supporting Senate Bill 818, which sus- pends civil penalties against businesses for a first viola- tion of state regulations if the business acts to remedy the violation within 30 days. It would not apply to "will- ful or grossly negligent" violations, violations injuring people, or violations of federal rules. In testimony on the bill, Eric Brown, a CBIA lobby- ist, said the proposal "would send a loud and important message to the marketplace that Connecticut is seri- ous about helping small businesses not only survive but thrive in our state by giving them a chance to correct first-time, minor regulatory violations such as paper- work and record-keeping requirements, without incur- ring a financial penalty." The bill would also free state resources to focus on significant or repetitive violators, he added. CBIA is backing a number of bills in different Q&A Businesses see some good, bad in legislative session Q&A talks to Andrew Markowksi, Connecticut state director of the National Federation of Independent Business (NFIB), about the state budget and legislative proposals that will impact business. Q: We are almost at the midway point of the legislative session. What have been some pro-busi- ness policies that have been pro- posed so far? What's the likeli- hood of their passage? A: Some of the most promising policy dis- cussions this session so far have come from Gov. Dannel P Mal- loy directly. During his state of the state address, he encour- aged lawmakers to focus on predictability for the business com- munity and to find a way to maintain exist- ing services while reducing the costs to taxpayers, while also referencing our his- tory of shortsighted state government and bloated spending. Additionally, his admission that a reluctance to improve the business tax cli- mate has resulted in neighbor- ing states having the upper hand with interstate competition rep- resented a significant shift in his perspective that has given our members reason to believe that the time for substantive change is upon us. We are optimistic that he and the legislature can work together to achieve success and that a reduction in the size and scope of Connecticut's govern- ment is a very real possibility. From the legislative side, mem- bers of all four legislative caucus- es have put forth good ideas and proposed positive bills that NFIB/ CT supports. We've seen bills to provide relief from the personal property tax for small businesses, bills addressing the estate tax, as well as various regulatory reform measures. The Commerce Com- mittee has been discussing sev- eral very positive measures for the small business community, including a proposal that would allow state agencies to waive pen- alties on businesses for first time regulatory violations. Unfortunately, with the good comes the bad, and even the mere discussion of some of the anti- business bills can have an adverse impact on the business community. Q: What have been some of the most anti-business pro- posals so far? A: The Labor and Public Employees Committee has been ground zero for bad-for-business ideas yet again this session. We've seen them debate various one-size- fits-all mandates, put forth a pro- posal that drastically alters state Family and Medical Leave Act laws and creates a payroll "tax" to fund a state- run paid-leave pro- gram, when what they should really be put- ting their energy into is developing a pen- sion system that has a chance of remaining solvent in the future. The minimum- wage debate, which has grown in popular- ity nationally, found a home on the Labor Committee where they debated the merits of drastically increasing the wage to $15 when the ink was barely dry on the last minimum- wage increase. Hopefully lawmak- ers on both sides of the aisle and Malloy will come to realize that both of these ideas are the wrong conversation to be having. But to even have these debates shows a complete lack of understanding of what the small business commu- nity is facing or desires. Q: The state budget contin- ues to be the 800-pound gorilla in the state Capitol. How have businesses reacted to Gov. Malloy's budget proposal? A: Malloy's budget proposal this year represented a stark contrast to some of his proposals in the past. He called for unions to par- ticipate in pension reform, consoli- dating state government and radi- cally reforming municipal funding. Our members were relieved to hear that he is now focused on improv- ing our economic conditions for the future and solidifying the busi- ness sector. Our hope is that the legisla- ture will support him with actual reforms and resist the temptation to once again put off making the hard decisions until sometime in the distant future. While everyone is concerned about the impact of property taxes, the business com- munity also realizes that we need to have a real discussion about the affordability and role of state government vs. local government. Regardless, local ANDREW MARKOWKSI Connecticut state director, National Federation of Independent Business (NFIB) Businesses seek relief from page 1 State Regulatory Burdens In a 2016 small business survey conducted by the Connecticut Business and Industry Association, 331 companies said these were the biggest fac- tors that hampered their firm's ability to grow in the state. Business costs from government regulations and mandates (other than taxes) 79% Taxes 74% Uncertainty and unpredictability of legislative decision-making 71% Cost of living for yourself and your employee 69% Lack of skilled job applicants 47% Transportation infrastructure 20% Credit availability 7% Broadband accessibility and capacity 5% S O U R C E : 2 0 1 6 C B I A A N D B L U M S H A P I R O ' S S U R V E Y O F C O N N E C T I C U T B U S I N E S S E S Continued Eric Brown, a CBIA lobbyist Republican State Sen. Scott Frantz speaks at a state Capitol news conference. Continued P H O T O | C O N T R I B U T E D

• Cover