Democrats’ Job Bill Would Cut Taxes for More Than 3,100 Small Businesses in Greater New Haven

Senator Looney joins small-business owners in fight for Senate Bill 1, say surcharge on TARP bonuses should pay for tax relief for ‘mom and pop’ businesses

Senate Majority Leader Martin Looney (D-New Haven) joined Frank Alvarado, Director of the Spanish American Merchants Association (SAMA), and business owners from New Haven at a news conference to highlight how Senate Bill 1 would impact small businesses in Greater New Haven.

Senate Bill 1 exempts certain small ‘mom and pop’ businesses with annual net incomes of $50,000 or less from the $250 business entity tax for two years. The Office of Fiscal Analysis (OFA) estimates that as many 1,033 businesses in New Haven—and more than 3,100 in Greater New Haven—qualify for the tax relief. The town-by-town breakdown includes:

• New Haven: 1,033
• Hamden: 756
• West Haven: 396
• East Haven: 221
• Woodbridge: 249
• North Haven: 505

A map showing the number of small businesses in each Connecticut town that qualify for the tax relief is available at: www.senatedems.ct.gov/GrowJobs.

In addition to suspending the business entity tax, the Democrats’ jobs plan would establish a program to provide loans and loan guarantees to companies with fewer than 50 employees, and authorizes up to $20 million in state general obligation bonding to fund the program.

“At 13.5 percent, New Haven has one of the highest unemployment rates in the state,” said Senator Looney. “The best way to bring that number down is to help small businesses, many of which are struggling to keep their doors open. Senate Bill 1 offers targeted tax relief to small ‘mom and pop’ businesses and expands access to credit for other companies. We must get Connecticut working again and our jobs bill will help do that.”

“This proposal puts more money into the pockets of small businesses,” said Mr. Alvarado. “Two-hundred and fifty dollars may not seem like a lot of money but it can help pay the gas or light bill.”

To help offset the loss of revenue associated with the tax cut Senate Bill 1 imposes a temporary surcharge on bonuses paid by companies that received Troubled Asset Relief Program (TARP) bailout funds. The surcharge of 8.97 percent is in lieu of regular state income tax on the bonuses. Recently Attorney General Richard Blumenthal issued a formal opinion rebutting claims that the surcharge was unconstitutional.

“The multi-billion dollar TARP bailout helped save the big banks and now they’re back to handing out multi-billion dollar bonuses to their executives,” said Senator Looney. “Our plan includes a temporary surcharge on bank bonuses—with all the revenue going directly to small businesses.”

Business leaders from across Connecticut testified in favor of Senate Bill 1 during a public hearing earlier this month. A representative of the Quinnipiac Chamber of Commerce spoke favorably about the Democrats’ efforts, “The Quinnipiac Chamber of Commerce supports the intent of SB-1, to preserve and create jobs in Connecticut. Since March 2008, Connecticut has lost 94,500 jobs. Given the job losses and high unemployment rate, creating a more competitive business climate that nurtures and supports job growth must be a top priority this year.”

Senator Looney is also proposing legislation as part his work on the Majority Leaders’ Round Table on Jobs. Among the recommendations (more details can be found at housedems.ct.gov/jobgrowth):

• Invest capital funds in double-tracking the New Haven to Springfield rail line
• Create an Angel Investor Tax Credit program in the range of $7 million to $10 million to leverage private investments by building new angel investment networks in CT that support start-up companies
• Redirect the existing Insurance Reinvestment Fund tax credits for funds that will invest in emerging and clean technologies and energy innovation