As hard as the coronavirus pandemic has been on state government finances, Gov. Ned Lamont says it’s been equally tough on Connecticut businesses.
That’s why, he said, the last thing he wants is tax hikes.
“To be blunt, I have no interest in raising taxes—no broad-based tax increases,” Lamont said Jan. 22 at the 2021 Economic Summit + Outlook, hosted by CBIA and the MetroHartford Alliance with the support of Webster Bank.
“Every governor, Republican or Democrat since—or including—Lowell Weicker has done that and it did not solve the problem.
"I know the hell that people are going through during this COVID pandemic.
"I know the fact that a lot of your small businesses are struggling everyday to keep their doors open, and I want to send a signal loud and clear that I hear you."
Lamont said that while Connecticut faces multi-billion dollar budget deficits in the coming fiscal years, the balance of the state’s rainy day fund is at an historic high.
“That gives us a little bit of flexibility,” he said in a conversation with CBIA president and CEO Chris DiPentima.
“We’ll see what, if anything, the federal government is going to do in terms of state and local aid.
“I don’t want to rely on that, but it buys us some time.”
Lamont touched on a number of topics during his discussion with DiPentima, including progress on the COVID vaccine.
“I think you and the business community should have the confidence that we’ll have a lot more clarity in terms of COVID and vaccinations over the next six to 10 weeks,” Lamont said.
Of big concern to Connecticut’s business leaders is a legislative proposal to expand workers’ compensation to include the coronavirus disease as a work-related illness.
The legislature's Labor and Public Employees Committee voted to draft legislation that would force employers and their insurers to prove an employee with the coronavirus did not get it at work.
Lamont indicated he’d be opposed to such a broad measure, noting that when similar legislation came up last spring, “we greatly limited the scope of the claims and made sure that you filed a claim during a limited period of time.”
He said he’d be opposed to any broad expansion of workers’ compensation that would further hurt struggling businesses.
“If I do anything at all, I think it will be very narrow and limited in scope, but right now, I’m doing everything I can to get businesses open,” Lamont said.
“If you feel like you've got this workers’ comp liability hanging over your head, it’s a lot tougher for people to get their businesses open and get back to work.”
Unemployment Trust Fund
Lamont said he’s confident that Connecticut businesses learned how to operate during the pandemic and know how to take care of their employees.
Another major concerns for Connecticut businesses is the state’s Unemployment Trust Fund, used to pay unemployment claims.
Now, Connecticut employers will have to pay it back through a hike in their annual unemployment tax—something CBIA has warned against since the tax quadrupled after the 2008 recession.
As the coronavirus closed businesses and people lost jobs, the state had to borrow hundreds of millions of dollars from the federal government so the trust fund could pay claims.
Lamont said he would like to see a federal grant fill the hole in Connecticut’s unemployment fund and is optimistic given U.S. Rep. Rosa DeLauro (D-CT 3) now chairs the House Appropriations Committee.
“If you made it a grant, that would save our small businesses and give us some certainty," he said. "We wouldn't have to raise any rates to do that.”
He urged business leaders to lobby their U.S. representatives and senators to change the loans into a grant.
DiPentima noted the strong, bipartisan response to CBIA’s Rebuilding Connecticut policy recommendations and how one of the planks is driving much-needed investments in urban areas.
“One of the biggest things in our priorities that has been well received by businesses and residents in Connecticut is urban renewal,” DiPentima said.
“As our cities grow and become prosperous, Connecticut will grow and become more prosperous.”
“You have to be champions for the cities even if you're a small town because we will never get the next generation of millennials unless we bring our cities back to life,” the governor said.
That’s why, he said, he supports transit oriented development to attract residents and businesses to Connecticut cities.
The governor also called for the business community's support in developing solutions to address the state's transportation funding issues.
“I’m coming forward with a couple of solutions as regards our transportation fund, which is really in such financial distress right now, ways that we can perhaps generate some revenues there,” he said.
“So weigh in. I need a problem solvers caucus who cannot just lay blame from the sidelines, but say ‘Here’s how I would solve the problem,’ and CBIA can really help me take the lead on this.
"If we can do this with transportation, we can do this with maybe pensions and other big knotty problems that have festered in this state for too long.”