Employers big and small are worried they’ll have to start paying more into the Connecticut Unemployment Trust Fund to repay the $ 700 million borrowed to pay claims.
“Businesses in Connecticut, which will not have federal relief funds, will pay off this debt for many years,” Chris Dipentima, president and CEO of the Connecticut Business and Industry Association, said Wednesday.
Dipentima says it took Connecticut companies five years to pay off the billion dollars they borrowed during the Great Recession.
“To date, 24 states have used part of their corona relief funds either to help pay unemployment benefits or to pay off the principal of federal loans,” Dipentima said in a virtual press conference Wednesday.
Connecticut employers are still suffering after the government forced some of them to close their doors for months. Many, like Max Restaurant Group, are struggling to get the last part of their business back on track.
“This would be the worst time to allow a major problem like the unemployment trust to go unresolved,” said Scott Smith, vice president and chief operating officer of Max Restaurant Group.
Smith said it was not fair for the government to ask companies to pay extra money for a problem they did not create.
“Failure to address this crisis threatens the recovery of jobs and the recovery of the state,” Smith said.
Katherine Saint President and CEO of Schwerdtle, Inc. in Bridgeport, they paid over $ 40,000 in additional taxes after the Great Recession.
“It’s a machine we needed, it’s a different person. It had a big impact at a time when we were very fragile, ”said Saint.
Wendy Traub, chief financial officer of Torrington-based Hemlock Directional Boring, said it was shut down for 8 months by the pandemic.
“With the PPP money running out and revenues dwindling and lagging, every dollar will matter to us for at least a few years,” Traub said.
Some people might retort and say we don’t need to deal with the unemployment fund, companies have had enough but what happened with this PPP loan 80% of that amount kept the employees hired, ”said Republican House leader Vincent Candelora.
Candelora said the P3 loans have helped retain employees, but they haven’t helped jumpstart the business and keep running.
He says that’s why he thinks the state should use some of the US bailout law funds to help pay off the $ 700 million the state borrowed from the federal government to pay for unemployment claims. historically high.
“We’re already going to see a slow recovery from an economic perspective regardless of the vaccine rollout because those benefits are just too rich,” Candelora said.
Rep. Kerry Wood D-Rocky Hill, who is a commercial real estate agent, says she believes Connecticut is on the verge of an economic recovery.
“I believe the time has come to build on that momentum and prioritize businesses in our states and we can do that by using the US stimulus dollars to pay down our unemployment trust fund debt,” Wood said.
Governor Ned Lamont was cool about using federal coronavirus relief funds in December 2020.
“Sounds like a pretty stupid idea to me,” Lamont said when Republicans first proposed it.
Today, at an independent press conference, he did not pledge to use American Rescue Act funds to pay off unemployment trust fund debt.
“I’d rather put it in economic development and education, but we’ll see what Washington does,” Lamont said.
US Representative Joe Courtney says they wrote the US bailout to be flexible.
“The two types of areas that were prohibitive were: no cuts in general taxes and no refunds from pension plans,” Courtney said.
Courtney says there is an argument to be made in using these funds to pay off unemployment debt.
“To the extent that covid caused unemployment to increase, which it obviously does, and one of the side effects of it would be to increase unemployment premiums as we stabilize the economy, this which could be a permitted use, ”he added. .
Candelora says that will be part of budget discussions going forward.
“While the governor does not support this notion, we can certainly continue this conversation as the budget talks unfold,” he added.