The state’s largest industry association unveiled its policy priorities for the 2024 General Assembly session Thursday, and one item was a non-negotiable.
Business leaders say they won’t budge on a set of spending constraints, put in place in 2017 and renewed last year, known as Connecticut’s “fiscal guardrails.”
The guardrails cap spending and borrowing and force legislators to save a portion of revenues each year. CBIA has credited the policies with helping the state “keep its fiscal house in order.”
“One of our top priorities is to keep that positive momentum going, to unlock that economic potential that Connecticut has by keeping those fiscal guardrails in place that have set us up in such a positive position over the last five to six years,” Chris Davis, CBIA’s vice president for public policy, said.
The constraints have helped to wipe out billions of dollars of the pension debt, flood the state’s rainy day fund and make possible several tax cuts including last year’s widely popular income tax reduction for middle-class households.
The legislature voted last session to extend the guardrails, providing what Davis called “the opportunity for businesses to make investments in Connecticut, knowing that we have that stable and predictable financial situation here.”
But whether the legislature will keep the status quo this session remains to be seen. Some lawmakers have suggested the budget controls should be revised in order to restore needed funding for public programs like education, health care and social services.
“If those guardrails were to be changed, to allow additional spending or additional taxation,” Davis said, “it causes pause within the business community — you know, is Connecticut really the place investment should be steered toward, or should we be looking elsewhere?”
Still, CBIA is in favor of expanding some social services as part of its efforts to increase workforce participation and draw new residents to fill the state’s open jobs. Tax incentives to increase home ownership, investments in child care and support for affordable health insurance options are among the proposals on the group’s agenda.
Davis said CBIA wants lawmakers to revisit a proposal that nearly passed last year, which would have allowed trade associations to offer group health insurance plans. He added that the association wasn’t opposed to including elements of a separate health care proposal legislators have raised, which offers tax breaks for small businesses purchasing policies through the state’s health insurance exchange.
“We recognize that there are still small business employees out there that may not have access to … what we’re proposing,” Davis said.
Also on the small business front, CBIA once again raised a proposal to pare back what’s known as the pass-through entity tax, which could result in savings of tens of millions of dollars collectively.
CBIA recommended reforming the state government’s overtime pay system — which the association estimates could save upwards of $70 million — and seeking greater returns on state pension investments. Freeing up those sources of funding could help cover necessary investments in child care, housing and workforce development, Davis said.
“We’re really trying to make Connecticut the most competitive state for employers to be able to create and retain jobs.”
