State Senate Minority Leader Len Fasano (R-North Haven) and State Senator Dan Debicella (R-Shelton), ranking senator on the Appropriations Committee, today testified on behalf of the Senate Republican caucus before the Finance Revenue and Bonding Committee on SB 1, An Act Concerning the Preservation and Creation of Jobs in Connecticut. The bill would create a new revolving loan fund to make credit available to small businesses and exempt small businesses from paying the annual $250 business entity tax. Both initiatives, introduced this year by Senate Democrats, are supported by Senate Republicans.
While there is disagreement about how to pay for the bill, the two Senate Republican legislators urged Democrat leaders to pass the job creation measures now and then come to a bipartisan agreement on responsible spending reductions to cover the bill’s $20 million cost.
“We are close to reaching consensus on a bipartisan bill that will help stem the loss of jobs and businesses in Connecticut,” said Senator Fasano. “Senate Republicans have been working to pass a comprehensive jobs growth initiative for the past three years and we are pleased that the majority is finally showing signs of support for those efforts. Now we need to finish the job. If both sides are willing, I believe Democrat and Republican leaders can iron out the minimal differences we have about SB-1 and have a jobs bill ready for passage as early as next week.”
"I am eager to work towards passing a jobs bill, but am concerned with the idea of raising taxes to pay for it," said Sen. Debicella, who has been instrumental in authoring Senate Republican Jobs Proposals aimed at repealing the business entity tax; eliminating outdated, redundant and counterproductive state business regulations; and providing tax incentives to emerging and next generation industries including alternative fuel, environmental remediation and nanotechnology. “I would ask that my legislative colleagues be fiscally responsible and pay for this bill through spending cuts, similar to those I have proposed in the budget I co-authored.”
Chief among the initiatives garnering bipartisan support is the proposal to eliminate the business entity on companies reporting less than $50,000 in income. While Senate Republicans support repealing the tax, and have proposed the measure for the past three years, they are advocating for a broader and more permanent measure that will affect businesses reporting $50,000 in profit rather than income. Senate Republicans also support the creation of a revolving loan fund for small businesses though do not support authorizing new bonds to fund the project. Instead, they prefer a solution closer to the Governor’s recommendation to use $100 million dollars in canceled bond authorizations.
The proposal to implement an additional tax on TARP bonuses has remained an area of contention between Democrat and Republican legislators. The proposal will add an additional tax on Connecticut’s highest earners and threatens to have a negative ripple effect on the state’s insurance and financial industries.
“Irrespective of how we all feel about the taxpayer funded bonuses, this portion of the bill ultimately provides an incentive for large corporations to relocate,” said Sen. Fasano. “If passed, this proposal will create a tax in Connecticut that surrounding states do not have and will hurt specific industries in their efforts to attract and retain highly qualified employees. The bottom line is, if we prevent large Connecticut corporations from using bonuses to retain top management, we run the risk of encouraging them to relocate to any one of the 49 other states that do have this tax.
Sen. Debicella furthered that point by stating, “The additional tax on TARP bonuses is constitutionally questionable and is an attack on both the financial industry and Fairfield County residents, who currently make up nearly 50% of the state’s income tax. Raising taxes on financial services professionals will cause them to move out of state, ultimately harming Connecticut’s tax base and leaving middle class families to make up for lost revenue.”
“Ultimately, while we don’t agree on every portion of this bill, there is not time to waste on legislative procrastination in dealing with the budget crisis and diminishing job climate. I am hopeful the majority will take our view into consideration as we work to create a truly bipartisan jobs growth plan.” added Sen. Fasano.