Blog: Jobs & the Economy

Jobs & the Economy, Regulation, Legislation, Elections

Wrapping Up the Legislative Session

  • May 10, 2012
  • by CT Policy Institute

The General Assembly’s legislative session ended this week with a flurry of activity.  With the Democratic Party in control of both chambers of the legislature and the governor’s office, the democrats pushed through a number of priorities on largely party-line votes.  However, splits within the Democratic Party on certain issues such as minimum wage increases left a few major bills on the table as the session ended.

The measures that passed included:
• Legalizing Medical Marijuana
• Supporting Unionization of Healthcare Workers
• Allowing Same-Day Voter Registration
• New Performance Standards for Utilities

The proposals that did not pass, for now, included:
• Minimum Wage Increase
• New Jobs Bill

Jobs & the Economy, Taxes & Government Spending

Budget Passes

  • May 10, 2012
Budget Passes

The General Assembly as agreed on a new $20.5B budget for the upcoming fiscal year.   The budget occurs against the backdrop of the previous fiscal year ending with a $200M deficit, in spite of the largest tax increase in the state’s history. 

The budget deals with this deficit by borrowing against Connecticut’s long-term debt obligations, which exceed $60B.  The budget also includes $143M of net additional spending for the upcoming fiscal year.  Many commentators have expressed concern that this will lead to further deficits going forward.

Meanwhile, the state's actual deficit based on Generally Accepted Accounting Principles (GAAP) is roughly $1.7B, and the budget delays a promised transition to transparent GAAP accounting.

Jobs & the Economy, Regulation, Legislation

Making Sense of the Online Gambling Debate

  • Feb 04, 2012
Making Sense of the Online Gambling Debate

After a U.S. Department of Justice ruling in December opened the way for states to legalize online gambling, Governor Malloy had declared it "inevitable" that online gambling would come to the state.  But this week, both Malloy and Rep. Steve Dargan, co-chair of the Ct. legislature's public safety and security committee, declared that it was unlikely they would introduce a bill this upcoming legislative session.  State Sen. John McKinney, the minority leader, has said he opposes online gambling in the state altogether.

Introducing online gambling in Connecticut is likely to take away current business from the state's two large casinos, Foxwoods and Mohegan Sun.  But some or all of those losses could be offset by new economic activity online.  Foxwoods and Mohegan Sun have explored entering the online gaming market themselves, and their owners support legislation legalizing online gambling in Connecticut, as long as they remain the only authorized providers.

Many experts think online gambling should be regulated at the federal rather than state level, since it is difficult to limit most internet activity to a particular state.  They therefore believe the DOJ's ruling, which delegated decision-making to the states, has caused more confusion than clarification.  This may explain some of the uncertainty and inconsistency in Connecticut leaders' response to the decision. 

Jobs & the Economy, Taxes & Government Spending, Government Administration

State to Review Tax Incentives Policy

  • Jan 13, 2012
State to Review Tax Incentives Policy

On Thursday, Governor Malloy signed an executive order creating a nine-person panel to review the effectiveness of tax credits in creating jobs. Interestingly, Governor Malloy's own $900 million jobs bill passed last year was focused largely on these very sort of tax incentives.

The taskforce, called the Governor's Business Tax Policy Review Taskforce, comes at the urging of state Comptroller Kevin Lembo.  Several Connecticut politicians have been calling for such a review for some time.

In the CPI's recent policy paper on Connecticut Job creation, the Institute lays out a three-part test for assessing whether job-creation tax incentives are good policy.  The CPI is skeptical of most targeted job creation tax incentives, instead prefering a holistic set of state policies conducive to economic activity and organic job growth.   

Reports differ on how Connecticut's total business tax burden compares to other states.  The Council on State Taxation ranks Connecticut has having among the lowest total effective tax rates for businesses.  But the Tax Foundation ranks Connecticut as having among the worst state business tax climates.  The differences can be accounted for in different metrics used to measure tax burdens.

What are your opinions on Connecticut's current business tax policy? Is heavy reform in order?  And if so, what should reform entail?