Takeaways from the Legislative Session

The regular session of the General Assembly ended last week and here is a rundown of some of the legislation likely to affect businesses and organizations in the region. We take a top-level look at paid family and medical leave, minimum wage increase, changes to service taxes, and a coming plastic bag tax and ban.
Paid Family and Medical Leave
A Paid Family and Medical Leave bill passed and will be signed by the governor. Under the bill, a fund will be created through a 0.5% employee payroll deduction. Legislation makes benefits available on July 1, 2021 with 12 weeks of replacement wages on a sliding scale beginning at 95% for minimum wage and capped at $900 a week. According to the CT Mirror, benefits would be cut if the revenue proves insufficient to meet demand. A quasi-public authority overseeing how the program will be administered will work out details over the coming months, and there is not currently an effective date for deductions to begin. As more information is announced, we will share the details. Keep an eye on Chamber publications for workshops related to the complex matter.
Minimum Wage
The Governor has signed a bill that increases the state’s minimum wage to $15 by 2023. The implementation schedule states the increases as follows: the current $10.10 an hour will increase to $11 on October 1, 2019; $12 on September 1, 2020; $13 on August 1, 2021, $14 on July 1, 2022, and then $15 on June 1, 2023.
Tax Additions/Eliminations
The Governor’s proposed budget included a large number of services to be added as taxable; however only the following additions were approved in the final budget:

  Current FY20
Digital Downloads 1% 6.35%
Prepared Foods 0 1%
Parking 0 6.35%
Dry Cleaning & Laundry Services 0 6.35%
Interior Design Services 0 6.35%
Two environmental initiatives secured approval in the session: a requirement of 2000MW of off-shore wind power by 2030 and a new surcharge on single use plastic bags to encourage use of reusable bags. Plastic bags will be banned starting July 1, 2021. In the meantime a 10-cent tax on every bag goes into effect starting August 1 this year. This move is expected to generate revenues of $30.2 million in FY 2020 and $26.8 million in FY2021.
Special Session
The legislature will likely convene a special session to discuss items that remain unresolved, particularly the issue of tolls. Other items could include sports betting, online gaming, and economic development projects.
Further Reading: