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CT’s proposed budget has material business implications

On Behalf of | Jun 3, 2019 | Business Formation & Planning |

“We’re going to get a budget that’s balanced without raising taxes on anybody.”

That utterance from Connecticut Gov. Ned Lamont late last week was like salve for sore ears for one distinct state demographic.

For another group, though, it was simply painful to hear.

The state’s chief executive and lawmakers have been steadily – frenetically might actually be the better descriptor here – engaged in crafting a budget that makes enough legislators sufficiently happy to enact a two-year agreement into law.

They seem to have achieved the goal over the past week, with Lamont stepping up to a podium last Thursday to voice his hope that a heavily negotiated budget plan would soon be signed.

Many commentators on the legislation point especially at two provisions they see as key.

The first is decidedly business-friendly. The proposed budget resists calls for the imposition of a capital gains tax on wealthy state taxpayers. Many of those filers own small businesses. Lamont consistently criticized the would-be exaction in recent months, stressing that it would have spurred a business exodus from the state, ultimately harming rather than helping Connecticut’s economy.

The second has piqued rather than pleased small business interests. It calls for an 11% reduction in a tax credit for so-called “pass through” commercial entities. The effect on state business owners would reportedly be a collective skimming from them of about $53 million. The credit was introduced by state lawmakers last year to help offset federal tax duties imposed on business owners.

“The ink is barely dry on that legislation and they’re already looking to take more revenue from businesses,” complained one industry advocate last week.

The bottom line concerning the proposed budget mirrors the outcome typically ensuing with bills that pass across the country on all manner of subjects. Some people are elated, while others can’t find much to cheer about.