In remarks Friday to the state’s business community, Gov. Ned Lamont proposed more than $300 million in property tax cuts but declined to commit additional federal resources to prop up the unemployment trust fund.
Lamont, who is seeking a second term in office, addressed a remote conference of the Connecticut Business and Industry Association Friday morning to outline some of his priorities for the legislative session, which begins on Feb. 9.
The governor spoke generally about continuing to tackle the COVID-19 pandemic through a dual focus on public health and public safety. But much of his remarks to the state’s largest business association centered around fiscal policy, and as he has in the past, Lamont suggested he will push for property tax relief. He said the state’s current fiscal climate could enable a cut of between $250 million and $300 million.
“It’s time for us to take a good hard look at property tax,” Lamont said. “That’s car tax as well as residence. It’s a tax that’s fixed. You gotta pay it during bad times and good times. It’s unforgiving in that sense. It hits the middle class particularly hard. So that will be one of my strong initiatives, to do what we can to reduce the property tax and expand the base of who gets access to property tax reduction.”
However, during a Q&A session, Chris DiPentima, CBIA’s president, pressed the governor on whether he would dedicate more federal relief funding to pay down a debt of around $700 million, which the state borrowed from the federal government to support the unemployment fund through additional strain during the pandemic.
Without intervention, that debt will need to be repaid by businesses and although the state did use around $155 million in American Rescue Plan Act funds to offset the debt last year, DiPentima said the remainder of the balance continues to hang over the head of Connecticut businesses.
“I’d be remiss if I didn’t ask you about something maybe you and I haven’t always agreed on,” DiPentima said. “The rest of it as of right now would fall on the shoulders of the business community come November when the assessments come… So I need to ask you because here I am asking for tax relief at the same time that the business community is about to get a tax increase if they have to pay back these federal dollars that we borrowed.”
Lamont said the state had made good progress on reducing the unemployment burden by paying down an additional $250 million. But he said he was hesitant to dedicate additional federal funds to offset the debt, especially as the state had access to low interest rates.
“You’ve got to decide: is it more important to use that ARPA to buy more testing resources or unemployment?” Lamont said.
However, the remaining debt was a priority Friday during the CBIA conference. Later in the program, Eric Gjede, the group’s vice president for public policy, raised the issue again during a panel discussion with state lawmakers. Gjede called the looming debt a “massive burden” for Connecticut’s businesses.
Sen. Norm Needleman, an Essex Democrat who runs a laboratory business “with a very large payroll,” said he would like the state to pay down the unemployment fund but believed it was a problem better tackled by federal intervention to hold all state unemployment trust funds harmless.
“It’s such a big problem across the country and in Connecticut that that’s how we should have tackled it. Doing it a little bit here and a little bit there certainly helps but there’s probably not enough money to really make an impact,” Needleman said. “I would like to see us use some more of it. That said, there’s going to be a lot of need out there.”
Rep. Terrie Wood, R-Darien, said the more the state assists with unburdening its business community the better off it will be in the long run.
“We need to provide all the support we can to the business owners who are providing jobs and without jobs, we don’t have people living here,” Wood said.