BUDGET DEAL LEAVES SMALL BUSINESS COMMUNITY LOOKING TO THE FUTURE FOR LONG TERM ECONOMIC SOLUTION
BUDGET DEAL LEAVES SMALL BUSINESS COMMUNITY LOOKING TO THE FUTURE FOR LONG TERM ECONOMIC SOLUTION
HARTFORD (May 13, 2016): Following yesterday’s Senate vote to adopt this year’s budget, debate began in Connecticut’s House of Representatives this afternoon. According to the National Federation of Independent Business (NFIB), after many in the small business community were lead to believe this year’s negotiations would include genuine structural reform, in reality, lawmakers are simply serving up more of the same.
“Only in Connecticut will legislators take a victory lap over a budget passing that includes $200 million worth of “unspecified” cuts to spending. Lawmakers have become master fiscal manipulators instead of tackling the structural changes that are imperative to our economic survival,” according to NFIB Connecticut state director, Andrew Markowski. “We certainly applaud this year’s spending reduction but without a dramatic reduction in the size and scope of state government, we will be repeating this cycle over and over for years to come. It appears that 2016 will be the band aid but what we really need are policy makers that have the fortitude to stop the bleeding.”
The legislature convened a special session this week when they failed to come to a budget agreement to close the $1 billion deficit during regular session. While this year’s budget does not contain any new state tax increases, it not only falls well short of addressing next year’s projected deficit but additionally, fails to provide any safeguards against future tax increases by state lawmakers.
Continued Markowski, “Lawmakers have essentially left the door wide open for new and higher taxes next year. There is no better way to discourage economic growth than to leave employers uncertain about what costs will look like in the future. Unlike state government, our members budget responsibly and do not spend revenue based on hopeful, and often incorrect, projections. Thanks to this year’s budget, small business owners cannot know for certain what their costs will be next year and beyond, and they will be extremely hesitant to make additional hires or expand their business.”
Governor Malloy, who has often cited a “new economic reality” for Connecticut this year, is expected to sign the budget. During this year’s state of the state, Malloy pleasantly surprised the small business community when he cautioned lawmakers that difficult decisions were on the horizon in order to keep the state from fiscal collapse and encouraged the budget to include a constitutional spending cap. NFIB welcomed his remarks and immediately praised his leadership and willingness to tackle such difficult reforms.
“Although we did not see the spending cap implemented this year, ultimately the small business community is relieved to see that the conversation to reduce state spending has begun, thanks in part to Governor Malloy along with some in the legislature. Our hope for the future is that lawmakers will have the same insight that he did this year and not only dramatically reduce spending but provide an incentive for small business owners to expand by reducing taxes,” continued Markowski. “Alleviating the tax burden on employers is, in the end, the best way to ensure a strong employment sector and demonstrate to small businesses that the days of fiscal gimmicks are behind us. We already know that tax hikes and business as usual in Hartford fails everyone in the state, so trying something different next year couldn’t possibly make things worse than they have been.”
