Connecticut Governor Dannel Malloy has vetoed a bill that would have allowed small businesses to take advantage of a state tax break that’s now only available to large manufacturers. The tax break is for hiring apprentices. Malloy says he is worried it would allow small businesses to sell the credits to wealthy individuals looking for tax loopholes.
Malloy says he vetoed the bill on Wednesday because it would potentially reduce state revenues by $650,000 this year and by more in future years.
“What the legislature either intended to do, or was an unintended consequence, was to give very wealthy people another tax write-off. And it ignores the fact that any small business that has those tax credits can sell those tax credits for revenue into the small business. As opposed to somebody who would have invested into that business.”
Malloy vetoed a similar bill that was passed by the legislature in 2016. The governor says he's willing to work with lawmakers on alternative legislation that would actually help promote investment in small businesses.
This is Malloy’s second veto this year. Last week he vetoed a bill that would have prevented future governors from cutting state education aid to cities and towns in the middle of the fiscal year.
Democratic House Speaker Joe Aresimowicz is calling on lawmakers to override both of Malloy’s vetoes. Aresimowicz says he’s reaching out to other caucus leaders to ensure that the necessary two-thirds veto override threshold is met. He expects the General Assembly to convene for a veto override session later this month.