What's Happening?
Governor Ned Lamont of Connecticut has proposed fiscal 2027 budget adjustments aimed at improving the state's business environment and workforce capacity. The proposal, unveiled at the start of the 2026 legislative session, includes an $85.1 million increase
in appropriations, raising spending from 5.4% to 5.7% over the previous budget. Key initiatives include extending research and development tax credits to pass-through entities such as LLCs and S-corps, capped at $25 million annually. The budget also proposes removing fees for certain professional licenses to address workforce shortages in trades like plumbing and HVAC. Additionally, a new tax credit for small employers offering health reimbursement arrangements is included, alongside $150 million in bonding for a new technical high school.
Why It's Important?
These budget adjustments are significant as they aim to bolster Connecticut's competitiveness in sectors like biotechnology, manufacturing, and technology. By extending R&D tax credits to more business entities, the state hopes to attract and retain early-stage companies. The removal of licensing fees is expected to ease entry into high-demand trades, potentially alleviating labor shortages. The proposed tax credit for small employers could increase workforce participation, particularly among parents. These measures reflect a strategic effort to create a more inclusive and sustainable economic growth model, which could have long-term benefits for the state's economy.
What's Next?
The budget proposal sets the stage for legislative negotiations, with public hearings expected in the coming weeks. Lawmakers will review and potentially adjust the proposals before finalizing their own budget plans by late March or early April. The outcome of these discussions will determine the extent to which Governor Lamont's initiatives are implemented, impacting Connecticut's economic and workforce development strategies.
