Business leaders in Connecticut say the tax increases proposed by Senate democrats would lead to significant job losses.
The changes that passed the legislature’s finance committee Thursday include raising the corporate tax rate by 30% for three years, lowering the corporate tax credit by 5%, and removing some sales tax exemptions. Committee Chair Eileen Daily says lawmakers did think carefully about the impact on firms in the state.
"What we did not do was make cuts that would harm business, cuts in their, or increases in their sales tax or their products for manufacturing. We attempted this in a serious way to keep businesses whole and to be in a good position when we come out of the recession."
But the feedback isn’t positive. The Connecticut Business and Industry Association says jobs are at risk, especially in sectors like manufacturing, bioscience, IT and corporate headquarters. The CBIA’s Joe Brennan says the legislature needs to take a harder look at the spending side of the ledger.
"A lot of the changes that are being proposed we feel will put up barriers to making investments in Connecticut that will help grow us out of this recession and keep more jobs in the state. Specifically we’re putting limitations on the ability of companies to use very important tax credits, such as research and development tax credits, and investment tax credits. We’re also eliminating some key sales tax exemptions that help growth industries like fuel cells and bioscience companies grow in Connecticut."
The proposals now go to the full House and Senate. Legislators say they want a budget finalized before June 3rd.