This is only his second veto from legislation passed in this year's session. He cited the cost in tax revenue: $650,000 annually.
That is a remarkably flimsy explanation, for a couple of reasons. First, $650,000 represents a mere 0.003% of the $20.86 Billion, bipartisan state budget. Second, the revenue loss was accounted for in the bipartisan budget. So he really had no reason to veto the bill.
The good news is that the bill was approved 36-0 in the Senate and 148-0 in the House. Thanks to the efforts of our lobbyist, Armando Paolino III, and others, discussion of a veto override vote is already underway. We continue to urge the legislative leadership to move forward with that effort.
We did attempt to convince the Governor to sign the bill, emailing him a letter in May signed by officials from about two dozen manufacturing members of the Chamber and related businesses. The text of that letter is reprinted here:
May 15, 2018
Dear Governor Malloy,
The Waterbury Regional Chamber, its affiliates the Naugatuck Chamber and Watertown Oakville Chamber, and our member manufacturing businesses in 14 communities in Greater Waterbury strongly urge you to sign Senate Bill 261, An Act Extending the Manufacturing Apprenticeship Tax Credit to Pass-Through Entities (File No. 571).
This legislation is vital to our member manufacturers, and to the state economy, for a variety of reasons. Most important is that it is one way to address the state’s ever-growing need for trained, skilled manufacturing workers. As you know, our major defense contractors — General Dynamics Electric Boat, Pratt & Whitney, and Sikorsky Aircraft — are seeking to hire tens of thousands of workers to be able to meet production needs over the next decade. Unfortunately, Connecticut has a shortage of such skilled workers, forcing these major companies to hire workers away from smaller manufacturers. This leaves the smaller manufactures, many of whom are pass-through entities such as subchapter S and limited liability corporations, shorthanded.
This legislation addresses that issue by making it easier and less costly for smaller manufacturers to hire apprentices. Training apprentices is costly, and the tax credit is a way to encourage manufacturers to hire them. Under existing state law, pass-through entities are unable to take advantage of the tax credit available to larger firms. Allowing smaller manufacturers to utilize the credit will encourage them to add apprentices, producing more jobs and increasing the number of skilled workers our state desperately needs.
We understand there is a cost associated with this bill, but we argue that the financial return to the state from the new jobs created outweighs the initial cost in tax revenue. The fact is that each manufacturing job supports 3 to 4 jobs in other sectors. Since there are thousands of open manufacturing jobs to be filled in Connecticut, using the manufacturing apprenticeship tax credit to encourage job creation will have a positive effect on our state’s economy. It will also produce more income tax and sales-and-use tax revenue, offsetting the cost of the credit.
For these reasons, the Chamber and the undersigned manufacturers and related businesses from Greater Waterbury strongly urge you to sign SB 261.
Thank you for your consideration.
David Krechevsky, Director of Public Policy & Economic Development, Waterbury Regional Chamber
Lynn Ward, President & CEO, Waterbury Regional Chamber
Lori DosSantos, Chairwoman, Watertown Oakville Chamber
William J. Palomba, Vice Chairman-Public Policy, Waterbury Regional Chamber, and Blasius Chevrolet Cadillac, Waterbury
Peter Adamo, President & CEO, Waterbury HEALTH
Richard Bushka, Bushka Lumber and Millwork Co., Waterbury
Matt Byrne, Minuteman Press, Waterbury
Tim Carr, Down to Earth LLC, Naugatuck
Ben Cohen, Acute Care Gases, Wolcott
Robert Cordeau, President, C&H Electric Inc., Waterbury
Francis Delaney, President, West State Mechanical Inc., Torrington
Yolanda Fournier, Gar-Kenyon Aerospace & Defense
Donald Gamsjager, DNR Labs, Watertown
Justin Golden, Golden Technology Services Inc., Southbury
George LaCapra Jr., UniMetal Surface Finishing LLC, Naugatuck/Thomaston
Selim G. Noujaim, Noujaim Tool Company, Waterbury
Alex Osowski, Watertown Auto and Truck Part Inc.
Michael Patenaude, Attorney at Law, Southington
Gene Rella, Jupiter Electric, Beacon Falls
Carmen Romeo, President, Fascia’s Chocolates, Waterbury
Scott Sambrook, Connecticut Seal Coating Inc., Bethlehem
Janice Shannon, Industrial Management & Training Institute, Waterbury
Chris Scyocurka, Managing Partner, Green Earth Energy Photovoltaic, East Windsor
Craig Strull, Vice President, Founders Technology Group, Southington
Jack Traver Jr., President, Traver IDC, Waterbury
Charles Veronneau, Veeco Electric, Waterbury