Small Business Owners Voice Concerns During Forum With Local Politicians
Two town employees and three local business people attended “Open For Business?” a forum on October 31 hosted by State Representatives Mitch Bolinsky and J.P. Sredzinski and State Senator Tony Hwang.
Surprisingly, the lawmakers were not disappointed at the turnout — they actually seemed to expect it.
“Most small business owners can’t afford to take time off to come to something like this,” Mr Bolinsky said. “But we’re offering it anyway, reaching anyone we can.”
During the 60-minute event conducted in the Newtown Municipal Center Council Chambers, the small group discussed taxes and upcoming changes, increases to the minimum wage, paid family and medical leave, and other recently enacted State policies that will affect most Connecticut residents.
A 19-page handout was made available to attendees with summaries of new laws enacted during the 2019 regular session that will significantly affect businesses, but only a few of 2019 acts affecting business made it into the discussion.
One of the first things brought up was challenges facing business owners who want to hire young employees. Local business owner Joy Brewster finds it is very difficult, she said, to find reliable help.
“The younger people have no work ethic,” she said. “They won’t call in, and they’re going to end up on the street, causing problems.”
Rosie DeStories, who owns Fairfield Auction in Monroe with her husband, agreed.
“Some young adults have not been worth the wages I’ve paid them, but it’s their first job and they’re trying to figure things out.”
Sen Hwang understood the challenge, he said, and thanked both women for giving young adults a chance.
“You gave them something of value,” he said. “You taught them that they need to take responsibility. It’s important for kids to have this experience.”
Rep Sredzinski reminded attendees that the session closed with a law that increased the wage from $10.10 to $11 on October 11, and then by another $1 every 11 months, until it reaches $15 on June 1, 2023.
Saying the minimum wage will increase “blatantly” by 2023, Mr Sredzinski said the state and its residents are “locked in for subsequent increases until 2023.”
The minimum wage “goes up 50 percent each time it increases,” he said.
Beginning January 1, 2024, the minimum wage will index future annual minimum wage changes to the federal employment cost index.
“The most recent debate about this may be the final debate on minimum wages before the federal indexing,” Mr Sredzinski said. “I wish I could say we will take your ideas back to Hartford and work with them, but we’re locked in.”
None of the lawmakers were pleased with the final law. Rep Bolinsky said the minimum wage regulations were “revised and revised and edited, and now it’s a very muddy thing to read. But I’m an optimist,” he added. “I was sworn in on pro-business and affordability concepts in 2013. I haven’t given up on that.”
The Prepared Food Tax
Rep Sredzinski discussed the new meals and beverages, commonly referred to as The Prepared Food Tax, which will increase sales and use tax rates on certain meals and beverages from 6.35 to 7.35 percent.
As of October 1, Public Act 19-117 is now applied to “sales of meals sold by eating establishments, caterers, and grocery stores, and liquors, soft drinks, sodas and beverages ordinarily dispensed at, or in connection with, bars and soda fountains,” according to the document shared at the forum.
Holding up a cup of coffee purchased by Rep Sredzinski en route to the forum, Rep Bolinsky pointed out, “This is a prepared food.”
Rep Sredzinski said restaurants already pay “a [similar] one percent extra tax.” Years ago, he said, the idea behind the tax was that if someone could afford to go out to dinner, then they could afford an extra tax.
“It’s an ongoing way the state tries to get more revenue,” he said. Until recently, grocery stores and other retailers had been exempt from that tax.
“In this budget, it was proposed opening that up to all prepared foods, regardless of where they are, especially when it comes to a grocery store or a convenience store,” he said.
Unfortunately, the language that was written into the bill was so open ended, the state rep said, that the Department of Revenue Services ended up issuing a memo to anyone who sells foods, clarifying what is and is not considered a prepared food.
A bag of spinach below a certain weight, he said, “is considered ready to eat, because in theory, you could open that bag, use a fork, and eat that spinach. That’s a prepared food.
“If you were to buy a soda, that’s not a prepared food,” he added. “That’s not considered a prepared food, unless you buy it with a sandwich. Because now it’s lunch, and so you pay that one percent. It got really, really silly.”
Real Estate Agent David Landau was one of the forum’s attendees. He was clearly frustrated with what he was hearing.
“When are you going to put that much creative energy into helping small businesses?” Mr Landau wanted to know.
Rep Sredzinski said he and his colleagues “called out the General Assembly on this.” The House and Senate Republicans petitioned for a special session, he said, to “just fix the words” of the state statute. The DRS eventually issued another memo, Mr Sredzinski said, but the language in the statute remains the same.
“The governor and the Revenue Services Commissioner sat down and decided to reinterpret the law,” Sen Hwang said. “That’s what they did, rather than going in and making changes and offering greater clarity and stability, they decided to reinterpret the law.”
Sen Hwang said it was the indecision in policy making by others in Hartford, which is then imposed on business owners and residents, that regularly leads to great frustration. If business owners felt they had set rules to follow, their work would be much easier, the state senator said.
“We hear from businesses all the time: ‘If you’ll give me a base line, then I know how to manage it, but when you keep changing the rule, moving the line, you can’t do business that way,’” Sen Hwang said.
“I wish I could come here saying that we’re going to be working harder for you as business owners,” Rep Sredzinski added, “but all we’re trying to do is be that goalie, trying to defend the State of Connecticut from misguided policy.”
In response to Mr Landau asking why small businesses are treated like they are part of the state’s fiscal problems, Sen Hwang said that feeling is “symptomatic of the challenges that businesses have in this state.
“The uncertainty and the up-and-down policy making and the impact doesn’t give any comfort toward building new businesses,” he said.
On that point, Mr Landau agreed.
“How many small businesses have moved out of the state this year alone?” he asked. Upon mention by Sen Hwang of Governor Ned Lamont and “the new transportation/infrastructure/toll/user fee package” he is expected to unveil this week, Mr Landau said that tolls “would be the nail on the coffin for small businesses in Connecticut.
“I don’t care what you say, I’m not going to pay a toll to do business in this state,” he vowed. “Start using the gas tax that’s been collected from me since 1984.”
“That’s exactly right,” Sen Hwang said. “When they talk about needing to collect ‘user fees’ for bridges and various other locations, there’s an underlying distrust, right?”
Small business owners and other state residents, Mr Hwang said, do not believe that many lawmakers mean what they say. There is a belief that taxes will be collected under one guise, “and used for whatever,” he said.
Changing the tone of the conversation, Ms DeStories thanked the men for their work.
“I do think all three of you are on the side of small business,” she said. “I’ve worked with all three of you, and you’ve been great.”
Addressing Mr Landau, she added, “There’s been legislation that has affected my business personally, and I don’t think that these three gentlemen are the problem.”
Presented less than a week before municipal elections, the trio of lawmakers reminded those in attendance that they can always change things at the local, state, and national level when they are unhappy with their representation.
“Elections have consequences,” said Rep Bolinsky. “There’s an election next week, and if you’re unhappy, change it up a little.
“Know your representative and know how they vote,” he added. “That actually is much more important that saying ‘This guy’s a Republican; I hate Republicans. Or this guy’s a Democrat, and I hate Democrats.’ Don’t just look at their party. Look at their record.
“It does more to affect change than to just get angry. That’s democracy,” he said.
As 8:30 neared, Mr Sredzinski closed the forum.
“We’re grateful to you for coming,” he said. “But we really need to wrap this up. I do have to get to work myself.”