Legislative Corner

State of Connecticut Launches STEP UP for Small Businesses

On April 3, 2012, Governor Dan Malloy (D-CT) announced a new program designed to promote job creation by providing incentives to employers that hire unemployed jobseekers.

The Subsidized Training and Employment Program (STEP UP), created as part of a jobs package passed by the state legislature, creates two types of hiring incentives for eligible small businesses. A six month wage subsidy is available to small businesses with fewer than 50 employees who hire those from a community with an employment rate equal to or higher than that of the state (7.7% as of April 2012). Further, such employees must have an adjusted family income equal to or less than 250% of the federal poverty level.

This week pieces of President Obama’s American Jobs Act supporting veterans and government contractors won approval from both chambers of Congress. The provisions passed would repeal a tax on government contractors, boost job training for veterans and offer tax credits to companies that hire unemployed veterans.

On Thursday, November 10, 2011, the Senate passed a bill that would repeal a 3% withholding tax on federal contractors that was signed into law in 2005 but has been yet to be enacted. Prior to the passage of this provision, if enacted, government agencies would have been required to withhold 3% of all payments to federal contractors and send the funds directly to the Internal Revenue Service (IRS).

On September 7, 2011, before a joint session of Congress, President Obama outlined the details of the American Jobs Act. This act is a package of proposals designed both to spur employment but also has a number of provisions specifically of interest to MBEs. These include:

• Extending the payroll tax cut to firms by cutting in half their payroll tax on the first $5 million in payroll. Next year, instead of paying 6.2 percent on their payroll expenses, firms would pay only 3.1 percent.

• Extending a provision signed by the President in 2010 which would allow for 100 percent expensing through 2012. This rewards firms for making investments by allowing them to deduct the full value of those investments from their tax obligations.

On September 6, 2011, Congress will return from its annual August Recess with a full list of tasks to complete before the First Session adjourns for the year. Some of the more pressing items to take up will be spending bills for Fiscal Year 2012 and recommendations from the Joint Select Committee on Deficit Reduction (commonly known as the Super Committee).

Each year, Congress must pass regular appropriations measures, by October 1, in order to keep the government funded. If the regular appropriation acts are not completed by October 1, then Congress must pass a continuing resolution, providing stop-gapfunding. In some years Congress may include several in an omnibus appropriations measure, or a continuing appropriations bill providing funding for the full fiscal year.