As the state’s business community tries to rebound from the global pandemic, Chris DiPentima, President and CEO of the Connecticut Business and Industry Association, warned that the state is among the costliest for business and disincentivizes growth.
DiPentima, whose organization represents 5,000 businesses in the state, pointed to a recent CNBC survey showing the state was 43rd in the country in terms of the cost of doing business.
DiPentima told CT Examiner the state also has a lot to offer the business community but that it needs to move fast.
“We just need to do it,” DiPentima said, “We need to do it a little faster and we really need to prioritize reducing the cost of doing business in Connecticut. We just need to put some more meat on that bone.”
He pointed out that the state demands occupational licenses for 350 different occupations, and six different licenses for an electrician to work in Connecticut. Neighboring states, he said, require just one.
“Research has shown that Connecticut requires more occupational licenses than any other state,” DiPentima said.
Many jobs require licenses not needed anywhere else, he said.
“We are the only state in the country that requires a license for a home entertainment installer,” he said.
And those licensing fees are a huge issue for many who want to open up shop in the state, DiPentima told CT Examiner.
“When we talk to individuals about why they are not getting into a certain field, they will say they do not want to pay these absorbent license fees every year,” he said. “The licenses are not cheap.”
DiPentima said licenses can cost in the $1,000 range and more each year.
But after the industry group fell short of passing several bills in the last session, he said he was optimistic for the 2024 short session.
DiPentima said there had been a whole host of measures and proposals – most having the support of Gov. Ned Lamont – that failed to win the approval of both chambers.
These include the elimination of the temporary corporate surcharge for larger corporations; restoring the pass-through entity tax credit; reducing licensing costs and the number of licenses businesses need in Connecticut; and instituting association health plans so that small businesses can offer their workers affordable health plans.
DiPentima said his organization, which has seven lobbyists working out of the Legislative Office Building in Hartford, is in the process of conducting its annual survey of businesses to get a measure of what’s working in the state and what needs more work.
But mostly importantly, DiPentima said, is to make Connecticut a more affordable place for companies – small, medium and large – to do business.
Eliminating the temporary corporate surcharge is one of CBIAs top priorities in 2024, according to DiPentima.
“There has been a temporary corporate surcharge for two decades now and the governor mentioned in the fall, during the campaign season, that this was something he wanted to get rid of because it just doesn’t send a good message when you have a temporary surcharge for that long,” DiPentima said. “It looks very permanent to people from both the recruitment and retention of business.”
DiPentima said that revenue from the charge was “a very, very small part of the overall budget, so it’s definitely affordable, especially given the fiscal surpluses we’ve had.”
And he said his group is optimistic that the pass-through entity tax credit was be reinstated in 2024, a change that would affect about 120,000 mainly small and mid-sized businesses in the state.
“It allows businesses to get a tax credit for the sum of their state and local taxes,” or SALT. It’s a measure also supported by Lamont.
DiPentima also said he will push, again, for a bill to allow businesses and nonprofit associations to offer their own health plans. CBIA has pushed for the measure in the past few sessions, but has always come up short. In 2023, officials from the state’s health insurance exchange were successful in its lobbying efforts to kill the bill.
The next session could be different, DiPentima said, “A lot of legislative supporters are optimistic it will get done.”
He also said he’d like to see a “robust pension advisory board” and claimed that the state “is doing a really poor job investing the [pension] money. We do not have good practices around our investments.”
Speaker of the House Matt Ritter, a Democrat, told CT Examiner Wednesday he’d weigh each issue and CBIA policy objective as they came up.
“Some of the stuff relates to revenue issues,” Ritter said. “They were debated last [session] and we were not able to sunset some of the things we talked about. So, as always, we will look at our budget, revenue and expenditures. We will work with the Finance Committee and figure out what the overall budget picture is.”
Ritter said he enjoys working with DiPentima, calling it “a pleasure. There are things we agree on and things we don’t agree on. That’s probably true of a lot of interest groups.”
But looking back, DiPentima counted a number of successes in 2023, including securing funding from the legislature for a Manufacturing Innovation Fund to the tune of $30 million over two years.
DiPentima said the fund’s goal is to “analyze opportunities to help small and medium-sized manufacturers grow and have their business grow jobs.” The fund could support marketing endeavors and help businesses acquire equipment.
DiPentima, who told CT Examiner that he believes Gov. Lamont is friendly to the business community, said it’s also what didn’t pass in 2023 that the organization is proud of.
DiPentima said CBIA, and others, were able to stave off some labor-related bills that, he said, would have hurt the business community.
They include, he said, several workplace mandates that never passed, including a paid sick leave expansion, unemployment benefits for striking workers and increased workers’ compensation costs.