New Laws Affecting Businesses Balanced With Job Growth Initiatives In 2011

By John Voket

Looking back on 2011, Connecticut businesses saw — or will see January 1 — a host of new laws that were drafted during the year taking effect. According to the state’s largest business organization, the Connecticut Business and Industry Association, the business community also faced many challenges in 2011— and the beginnings of new opportunities.

Lawmakers approved a new two-year state budget that includes numerous tax increases, along with several new laws dealing with energy, the environment, and the workplace. Later, in a special session on jobs, the legislature adopted many measures designed to promote job creation and economic development, including new resources for small businesses.

A bipartisan jobs bill was hailed as a good first step toward improving Connecticut’s climate for job creation and economic growth. The far-ranging scope of the package (HB 6801) and the fact that it gained overwhelming support from both sides of the aisle are especially encouraging, said CBIA President and CEO John Rathgeber.

 “We’re hopeful it represents a new beginning for the state,” said Mr Rathgeber, “and a long-awaited change of attitude.”

Aware that jobs and Connecticut’s economic future depend on the confidence of private-sector employers to compete, invest, and grow here, policymakers packed scores of measures into the package.

The bill’s many components should help create jobs, attract new investment, strengthen the state’s economic base and its skilled workforce, and make Connecticut a more competitive place to do business. Many of the initiatives are echoed by the CBIA’s pro-jobs agenda.

Factors that businesses have identified as blocking their ability to create jobs in Connecticut — including a lack of support for small businesses and a regulatory environment that hinders economic development — also were addressed

The package has measures to promote innovation, develop short- and long-term workforce development strategies, and enhance the state’s economic development tools.

Among the initiatives was a two-year, $100 million Small Business Express Funding Program aims to keep many Connecticut companies on the road to success. The Small Business Express is actually several loans, forgivable loans, and matching grants to state Department of Economic and Community Development (DECD)-approved small business applicants that create or retain jobs or otherwise stimulate the state’s economy.

Expediting The Process

As with the other programs offered through the new Jobs Bill, the DECD is expediting the paperwork process to get needed resources into the hands of small businesses more quickly. In most cases, businesses approved in these programs are required to get DECD’s financial help within 30 days of completed applications.

To qualify, businesses must have 50 or fewer employees and be based in Connecticut. DECD will give priority to companies that are creating jobs and otherwise contributing to the state’s economy, such as by exporting their products and services or promoting innovation.

Qualified employers may access loans from $10,000 to $50,000 at a four percent interest rate for up to five years for the purchase of new machinery and equipment, construction or improvements, and working capital. DECD has $20 million in this fiscal year (2012) and another $20 million for fiscal year 2013.

The second component offers loans from $10,000 to $250,000 to qualified businesses that increase and maintain jobs for at least 12 consecutive months. Loans can be used for training, marketing, working capital, or other expenses that directly support job creation.

The DECD will give priority to “economic-base industries,” which include precision manufacturing, business services, green and sustainable technology, bioscience, and IT. If a participating business attains its job-creation goals, DECD may forgive all or part of the loan.

These $10,000 to $100,000 grants from DECD must be matched equally by each participating business and may be used to provide training, acquire machinery and equipment, build or improve facilities, or help a company relocate within the state. Again, DECD will give priority to Connecticut economic-base industries as well as the agency’s assessment of the company’s ability to maintain its job-growth goals.

Streamlining, Revitalizing

One of the year’s most talked about measures, PA 11-80, creates a state agency that will consolidate the management and oversight of energy and environmental policies into the Department of Energy and Environmental Protection (DEEP), although how that will be done remains to be seen. In another measure, CBIA’s Environmental Policies Council played a major role in developing portions of legislation designed to stimulate private sector investment in the revitalization of brownfields.

In addition, passed was a chemical ban affecting a wide variety of businesses that issue cash register receipts, and a new burden on DEEP to adopt regulations concerning quarrying operations.

Unfortunately, bills that would have fostered expedited environmental permitting and streamlined DEEP’s regulatory burdens in a variety of programs — including storm water, stream channel encroachment, vehicle emission standards, and stream flow — all failed in the legislative process.

In a year in which reopening Connecticut for business was raised as a priority, state legislators took some incremental steps to advance economic development. Lawmakers approved the creation of a one-stop business portal, the establishment of a manufacturers’ reinvestment account option at financial institutions, UConn Health Center expansion projects, and a job-creation incentive program.

The business-portal proposal contained in PA 11-48 took a necessary, but only preliminary, step in the right direction by making it easier for companies to navigate the state bureaucracy. Similarly, the manufacturers’ investment account was limited to a pilot program instead of a statewide rollout as originally proposed

Minimal Education Advances

Reforming Connecticut’s education system continued to be a concern of businesses, policymakers, and educators. The Achievement Gap bill (PA 11-85) and the Early Childhood Consolidation bill (PA 11-81) were seen as positive steps for advancing important education reforms.

The lack of meaningful teacher evaluation legislation this year, however, and the failure to adopt common charts of accounting for school expenditures are indicative of the level of work that remains to be done.

The Higher Education and Employment Advancement Committee also made some important changes in the effort to heighten degree requirements for early childhood educators. The committee also took steps to better align the state’s institutions of higher learning with the needs of the job market.

In one measure, a more realistic timetable for early childhood educators’ attainment of degrees was implemented; existing funds were also directed to subsidize the efforts of individual staff members in working towards those degrees (PA 11-54). The committee also asked that the Office for Workforce Development analyze and report, biennially, to the Board of Governors of Higher Education regarding the state’s workforce requirements (PA 11-133).

Read the entire CBIA report on 2011 business-related legislation at http://cbia.com/govaff/pdf/2011/final2011.pd