The idea for an entrepreneurial “learner’s permit” in Connecticut — a two-year holiday sparing new startups some regulatory fees and paperwork — is before a state fiscal analysis committee that could determine whether the initiative becomes law.
The bill comes on the heels of New York Gov.Andrew Cuomo‘s offer of 10 years of tax-free operations for qualifying startups in that state. It also arrives amid fresh data on a decline in new business formation in Connecticut, which fell slightly for a second straight year in 2014, according to data from the Connecticut Secretary of the State. Those declines extended into January, when for the first time in at least 15 years the state did not register 2,000 startups that month, with only about 1,890 companies formed in January.
With early support from committee Democrats, the bill’s outcome could well lie with the Assembly’s Office of Fiscal Analysis, Frantz said. If OFA determines the bill would represent a significant drain on the state budget, he expressed doubt it would win support of Gov. Dannel P. Malloy, whose administration tries to reverse a revenue shortfall while maintaining small business initiatives created under previous budgets and winning support for a major investment in Connecticut’s transportation infrastructure.
Others were quick to draw comparisons to the New York offer of 10 years of tax-free operations in that state, including Bruce Carlson, acting president of the Connecticut Technology Counciltrade group.
“I’m not saying two years is too short,” Carlson testified in late February to the Commerce Committee. “I’m saying that when we look at what the competition is … For a lot of these startups, which is what the learner’s permit is geared to, within two years you’re either making money or you don’t exist. And so that might be the right amount of time.
“Let’s get it going,” he added. “If it works and we find there’s a need for a longer period of time — go for it. But the first step is just to get it going.”
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