Property Tax
- While we recognize the work the legislature has done to minimize the impact of contingency based audits on manufacturers, Connecticut manufacturers believe that contingency-based personal property tax audits should be prohibited outright.
- Many CT manufacturers have become entangled in municipal disputes regarding which jurisdiction taxes their motor vehicles, the town in which the company is located or the town in which the vehicle is stored or garaged. Seek a ruling from OPM on the appropriateness of taxing vehicles in the jurisdiction where a business is located, as opposed to taxing them where they are garaged; which is what the statutes dictate.
- Manufacturing machinery and equipment installed by manufacturers during distributed generation projects should be exempted from property tax and treated as manufacturing equipment
Sales & Use Tax
- Connecticut manufacturers believe that the labor associated with installing equipment that is exempt from the sales tax should be similarly exempt.
Corporate Taxation
- Avoid moving to Unitary or any other taxation methodology that would extract more revenue from Connecticut manufacturers. Based on the latest data that we have, manufacturers make up 6% of the corporate population, but they contribute 25% of the corporate tax revenue. Manufacturers are paying their fair share.
- Examine the feasibility of expanding the existing tax credits that are available to manufacturers organized as C corporations to the manufacturing companies that are structured as S corporations, limited liability companies and sole proprietorships.
- Amend the Manufacturing Job Creation Tax Credits passed last year to include the creation of any new manufacturing job in Connecticut (from the current requirement that 50 jobs be created) to spur employment growth in manufacturing.
- Expand the investment tax credits provided to the insurance industry to manufacturing.
- Maintain tax credits and other incentives that encourage manufacturers to invest in research and development and technology development.
Business Succession
- Many small and medium sized – and even some larger – manufacturing companies are family owned and are passed from one generation to the next. The imposition of a new estate tax that will affect the transfer of a family business between generations is extremely problematic for manufacturers
- Although the electric industry was restructured in 1998, we have never experienced the benefits of deregulation. Manufacturers believe that only by staying the course will we see real markets and real competition. Connecticut must end the practice of legislative tinkering and allow the markets to function.
- In the 1998 legislation, Connecticut’s regulated utilities were required to dispose of generation assets. If CL & P and UI are willing to undertake generation projects, and can demonstrate that such initiatives will provide rate relief through reduced FMCC charges or reduced peaking costs, then they should be allowed to reenter the generation market.
- Energy costs in Connecticut are spiraling upward. Connecticut must do serious planning for our future energy needs. In addition, our elected officials cannot oppose every power generation and transmission proposal. Connecticut must be an active partner in finding acceptable methods of providing for our energy needs.
- Every dollar paid by manufacturers into the CT Energy Efficiency Fund each month should in fact be available to be used for their intended purpose; “to help manufacturers make their facilities more efficient so as to help defray the rapidly rising cost of energy”. As it stands now, only about 60 cents of every dollar can be used for efficiency improvements. The other 40 cents goes to pay off bonds that were taken to fund other projects.
- Connecticut should provide energy generation facilities and equipment located in Connecticut with an exemption from sales and use tax. Machinery, equipment, parts and supplies used in the production of energy should be considered manufacturing equipment and exempt from sales taxes
- The state should eliminate the gross earnings tax (GET) on fossil fuels purchased by energy producers.
- Move to GAAP Accounting
- Recognize and deal with the state deficit including bonded debt and the enormously under-funded teacher and state employee pension funds and the annual cost of retiree health care.
- Connecticut should amend or repeal the “Upjohn Statute”, (C.G.S. § 12-63e) under which property owners of polluted sites are assessed property taxes based upon the full value of the property as if the site were clean. Manufacturers working to clean up contaminated sites need relief from municipal taxes to offset the ongoing cost of monitoring and remediation.
- The Office of Brownfield Remediation and Development should be put under the jurisdiction of OPM.
- Amend the Transfer Act and various state statutes with respect to Brownfield sites to accomplish the following:
- Establish a time limit for the audit of LEP determinations to provide for finality of clean-up, or have a broader use of no further action letters and/or covenants not to sue;
- Provide that sites that are remediated pursuant to the State’s Brownfields programs also satisfy all requirements for RCRA, CERCLA and TSCA, such as what is currently being done in Pennsylvania;
- Provide funding for Brownfield remediation projects, including funding available to private companies seeking to remediate sites.
- Allow the use of environmental audits by businesses seeking to voluntarily determine their environmental compliance status by amending Connecticut statutes in this area to emulate the U.S. EPA’s audit response program. This program allows for companies that conduct voluntary environmental audits to avoid penalties for violations where: 1) the violations were found as the result of a voluntary audit program; 2) the violations were reported in a timely fashion to the EPA; and 3) the company takes good faith steps to correct a discrepancy identified in the audit within a reasonable period of time after the discrepancy was discovered by the audit.
- Stimulate private capital investments by earmarking any grant money the state receives from federal sources to existing Connecticut businesses to be used for Brownfield remediation and development. In other words, open up Brownfield funding to the private sector, including businesses already located on existing Brownfield sites where those companies may have caused the contamination, but were only following the best disposal practices of their day.
CONNSTEP
- Many small and midsized manufacturing companies benefit from CONNSTEP programs and services. The line item for CONNSTEP funding must be increased in order to restore and maintain service levels.
- Connecticut has both a graying workforce and a dwindling pool of available workers. We must address these issues. There exists within Connecticut a ready need for skilled and semi-skilled manufacturing employees. Connecticut must be a partner in helping to fill these openings.
- The Customized Job Training (CJT) money within the Department of Labor is vital to incumbent worker training; particularly for small firms. CJT funding through the DOL should be increased.
- Similarly, funding for manufacturing apprenticeships should be increased.
- The community colleges and vocational technical schools must be required to address the issue of manufacturing skill training in an immediate way.
- The legislature should create new or enhance existing tax credits in the area of training and education as incentives to small and mid-sized manufacturers with particular emphasis on programs that encourage internships and job shadowing.
- Care must be taken that employees enrolled in apprenticeship programs be exempted from collecting unemployment compensation until a reasonable time has passed for evaluating the new hire. Manufacturers willing to hire and train new employees believe that this exemption should exist for the first 30 days of employment.
- Health care costs in Connecticut continue to escalate, fueled in part by the constant addition of mandated benefits. Connecticut must resist adding additional costly mandates to employer funded health care plans.
Connecticut is a high cost state in which to manufacture. Not the least of these expenses is the fully absorbed cost of employee wages and benefits. Manufacturers recognize that this is a high labor cost state and that wages are determined between employers and employees but MAC also believes that controlling benefit costs is essential. To that end we must:
- Deem that illegal aliens are not eligible for benefits under the Second Injury Fund, which is funded by employers as an added cost to their workers’ comp premiums.
- Encourage the hiring of probationary employees by changing the threshold, CGS Sec. 31-255a(c), from $500 in wages, to thirty days of employment that an employee must complete in order to qualify for unemployment compensation. This lessens exposure for employers who hire probationary employees or hire for on-the-job training (OJT).
- Amend the statutes to eliminate permanency awards for pre-existing conditions. With the elimination of the Second Injury Fund, employers may find themselves financially responsible for 100% of a disability despite the fact that the entire disability or a substantial portion of it may have pre-existed employment and is not the result of an on-the-job injury.
- Amend provisions on repetitive trauma to reduce permanent disability awards for that portion of disability resulting from lifestyle and/or the aging process.
- Legislatively designate that all manufacturing jobs are safety sensitive in order to allow for random drug testing of employees. Manufacturers using pre-employment and post-employment drug testing should receive automatic discounts on workers’ compensation insurance.
- Not move toward paid FMLA benefits that would not only draw upon the healthy balance in the state’s unemployment fund but will create a new business tax on employers. MAC supports FMLA, but urges that it remain unpaid in order to encourage return to work and to avoid an additional tax burden on manufacturers.
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