As you may know, manufacturing remains a key factor to Connecticut's economy. While there have been declines over the past 20 years for various reasons, approximately 10% of our workforce is still employed directly in the sector. Most studies show leverage of 1.5 - 5 service sector jobs for each manufacturing employee. Thus, at least 25% of the people working in the state rely on this critical sector. If Connecticut is to strengthen its manufacturing base, there needs to be a concerted effort to overcome cost challenges, regulatory burdens and perception that manufacturing is no longer viable in the Constitution state. Fortunately, there are several measures currently under consideration in various committees that would do just that.
SB 367 eliminates double taxation of certain gifts made through trusts routinely used as tools in succession planning - If we can keep more family owned businesses in the family for the next generation then there is a higher likelihood that those family members would keep that business operating in the state. This bill will help keep large and illiquid assets such as smaller manufacturers in the family.
SB 303 permits pass through employers to take advantage of state research and development tax credits. Most small manufacturers are organized as pass through entities. Under current law R&D tax credits can only be claimed by, typically larger, C corporations. Considering how much innovation occurs within smaller companies and how many jobs are created by these innovative firms, extending this credit makes good economic sense for the state.
SB 420 extends the state's apprenticeship tax credit to pass-through entities. One of the greatest challenges manufacturers face is the need to fill the pipeline with the next generation of skilled workers. This measure would help defray a small percentage of the costs for small companies who invest in formal training programs with portable skills that will strengthen our industry and state.
SB 349 would provide a framework to ensure that future regulations are truly necessary and achieve the goals of regulation in a manner that is least burdensome to manufacturers.
SB 61 would help rein in the rapidly escalating costs of workman's compensation insurance by providing a limit on fees hospitals can charge employers similar to discount networks for healthcare. Without these caps in place, there is great incentive for hospitals to gouge small businesses, making Connecticut companies less competitive with their global competitors.
Please feel free to contact me should you wish to discuss these or other ideas on how to strengthen the manufacturing base in our state.