Law Change Sought For Worker Co-Ops

Aliyya Swaby PhotoNew Haven city officials, with the help of Yale Law students, are seeking to leverage the buying power of major nonprofits to boost business and job creation. But first, they say, the state’s law on worker cooperatives has to change.

Toward that end, Mayor Toni Harp went to Hartford Tuesday to ask the members of the General Assembly’s Commerce Committee in support of a bill that would allow nonprofits to provide funding for resources and participate in governing decisions of such worker-owned businesses.

Harp told lawmakers that she sees such businesses as a potential part of the city’s strategy for lifting people out of generational poverty, particularly for those who encounter barriers to traditional employment such as single-mothers, the formerly incarcerated and those without a high school diploma.

“Every year major employers throughout the state spend millions on services they cannot readily access,” she told lawmakers. “These contracts are for nuts-and-bolt type services like uniform repair, floor mat rental, laundry where the profit margin is so slim investors might not be interested but for the workers in these jobs it can change their lives and their standings in the community.”

Harp said she envisions worker-owned cooperatives — businesses where the employees are also the owners and make all governing decisions democratically — filling these needs with the help of money from deep-pocketed foundations who want to provide start-up funds for equipment and other capital investments. She’d witnessed such collaborations in Cleveland, she told lawmakers, when KeyBank was moving from Connecticut to Ohio.

KeyBank Foundation had collaborated with worker cooperatives in that city to establish a laundry that supports Cleveland Clinic hospitals, a hydroponic garden that provides produce to supermarkets in the Cleveland metro area, and a solar and weatherization business. Harp said cooperatives create jobs. And because the worker-owners are invested in the success of the business and share profits, they don’t outsource their work. They also don’t pick up and move to another state with more attractive tax incentives. After five years, 90 percent of the Cleveland cooperatives are still in business, she said.

Harp said the city, in tandem with Yale University and Yale-New Haven Hospital, is now working with the Cleveland-based Evergreen Cooperatives on business models for worker cooperatives in New Haven. And it was looking at such models that prompted the need for a bill.

Current state law governing worker-cooperatives does not allow nonprofits or institutional partners to be voting members of in the cooperative, according to Lauren Hobby, a Yale Law Community and Economic Development Clinic student.

Hobby testified before the committee that these partners can provide access to not just capital resources but also legal and human resources support. Hobby also said it is an option for local businesses to stay local when the owner is ready to retire. Instead of selling the business or simply shuttering it, a worker-cooperative model is an option that allows the employees to become the new owners. (Read here about how the owner of Fair Haven-based Vespoli USA used a different model known as an employee stock ownership plan (ESOP) to turn his company over to his workers.)

Hobby said that New Haven’s Long Wharf district has a number of businesses that are preparing for an ownership change and cooperatives could play a vital role in keeping those businesses local and that section of the city stable.

The 2018 Agenda

Bill #StatusSummarySponsors
HB 5001In Committee
Died on the Floor
To impose a fee on transactions involving virtual currency.Pat Dillon
HB 5031
SB 4
In Committee
Committee Approved
Sent to the Floor
Passed
Gov. Signed
To allow students to have equal access to institutional financial aid.Higher Education and Employment Advancement Committee
HB 5082In Committee
Committee Approved
Died on the Floor
To provide state funds to assist hurricane victims from Puerto Rico and the U.S. Virgin Islands who are living in Connecticut.Juan Candelaria
HB 5126In Committee
Died on the Floor
To increase funding to boards of education and family resource centers that provide assistance to students and families from Puerto Rico.Juan Candelaria
HB 5112In Committee
Sent to the Floor
Died on the Floor
To permit the retail sale of marijuana and tax such sale to raise revenue for the General Fund and to fund substance abuse treatment, prevention, education and awareness programs.Juan R. Candelaria, Angel Arce, Josh Elliott, Steven J. Stafstrom, Jeff Currey, Susan M. Johnson, Chris Soto, Patricia A. Dillon, Roland J. Lemar, James M. Albis, Christopher Rosario, Kim Rose, Robyn A. Porter, Edwin Vargas, Matthew Lesser, Gregory Haddad, Joshua Malik Hall, Ezequiel Santiago, Diana S. Urban, Toni E. Walker, Robert Sanchez, Alphonse Paolillo
SB 1In Committee
Died on the Floor
To expand the sick leave program to provide earned family and medical leave to certain individuals employed in this state.Martin M. Looney, Bob Duff, Timothy D. Larson, Steve Cassano, Beth Bye, Terry B. Gerratana, Gary A. Winfield, Ted Kennedy, Catherine A. Osten, Marilyn V. Moore, Edwin A. Gomes, Mae Flexer
SB 62In Committee
Died on the Floor
To provide tuition-free community college for Connecticut residents.Martin M. Looney
HB 5182In Committee
Committee Approved
Sent to the Floor
Died on the Floor
To require building officials in certain municipalities to establish and assess a fee for the commencement of certain work without a necessary permit.Planning and Development Committee
HB 5210In Committee
Committee Approved
Sent to the Floor
Passed
To (1) mandate insurance coverage of essential health benefits, (2) expand mandated health benefits for women, children and adolescents, and (3) expand mandated contraception benefits.Insurance and Real Estate Committee
HB 5084In Committee
Died on the Floor
To encourage the recycling of nip bottles that otherwise frequently litter urban areas.Roland J. Lemar and Juan R. Candelaria
HB 5350
HB 5537
In Committee
Committee Denied
Sent to the Floor
Died on the Floor
To create a pilot program for shared solar facilities at municipal airports. The bill also would delete the provision that dictates the length of Tweed Airport’s runway.Energy and Technology Committee
HB 5475In Committee
Committee Approved
Sent to the Floor
Passed
To amend statutory provisions concerning a police officer’s viewing of a recording from body-worn recording equipment under certain circumstances.Judiciary Committee
HB 5515 In Committee
Committee Approved
Sent to the Floor
Passed
To permit a zoning commission to regulate the brightness and illumination of advertising signs and billboards.Judiciary Committee
HB 5540In Committee
Committee Approved
Sent to the Floor
Died on the Floor
To ban guns without serial numbers and regulate those which are sold in a form requiring the purchaser to finish assembly or that are homemade and to permit local authorities to interview immediate family members as part of a determination of an applicant's suitability.Judiciary Committee
HB 5542In Committee
Committee Approved
Sent to the Floor
Passed
To ban the sale or transfer, possession, manufacturing or use of bump stocks or other accessories to increase the rate of fire of a firearm.Judiciary Committee

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