Appropriations Offers Spending Plan for $2.8 Billion of Federal Aid

The state legislature’s Appropriations Committee presented its plan to divvy up more than $2.8 billion in federal relief funding, the third in a series of proposals for bolstering Connecticut’s economy and supporting people who are continuing to struggle with the consequences of the pandemic. 

Gov. Ned Lamont laid out his spending priorities for the funds at the end of last month, and last week, Republican lawmakers presented their own ideas about where to invest these funds. The money has been directed to the state through the federal American Rescue Plan Act signed into law in March. 

While the committee’s proposal in many ways mirrors the governor’s, it also highlights additional priorities, including increased funding for nonprofits and nursing homes, spending on tourism and local parks and reducing future unemployment tax obligations for small businesses.

Unemployment and job training

One of the largest allocations, $310 million, would be directed toward the Unemployment Insurance Trust Fund. 

Over the past year, the state has borrowed $754 million from the federal government to cover the large number of unemployment claims brought on by closures to stem the pandemic.

In his own proposal, Lamont proposed putting aside $50 million toward paying back the fund. Both Republican and Democratic lawmakers say this is not enough, given that the fund is generally paid back through a tax increase on businesses. Using federal dollars to reduce the debt would lessen the amount that businesses would have to pay. 

Lamont said in a press conference on Monday that he would “wait and see” what the next federal package would bring before allocating more money to the trust fund. 

“We borrow money for the Unemployment Trust Fund at a very low rate,” said Lamont. 

The proposal by Appropriations also puts aside $130 million in funding to train the workforce for manufacturing, as emergency medical technicians and for other short-term certifications. 

State Sen. Craig Miner, R-Litchfield, said during the committee meeting that he disagreed with the spending, saying that it doesn’t help businesses who are struggling to find employees. 

“We’ve got a lot of businesses that have ‘Help Wanted’ signs out,” he said. “The economy is not going to improve 

if you can’t get someone to take your order at a local restaurant.” 

State Sen. Cathy Osten, D-Sprague, co-chair of the committee, told CT Examiner that she agrees that people should be encouraged to apply to work at those businesses. However, she also said she believes that changes in the way that casinos are operating may mean that workers need to make a job change. 

“I really think we are going to have people transition into other jobs,” she said. 

State Rep. Toni Walker, D-New Haven, a co-chair of the committee, said that job training was an issue that needed to be addressed in the communities with the highest level of unemployment. 

“A lot of people were unemployed, and instead of just going through and trying to find an industry here or an industry there, we’re asking our workforce development boards and everyone to participate in helping us find training programs that address our populations,” said Walker. 

Parks, fairs and tourism 

Walker emphasized the struggles that families have faced during the pandemic and the need to provide families and children with activities that they can participate in together. 

“Our families are the most vulnerable right now than anybody, for a variety of reasons,” said Walker. “For food, for employment, for housing, and just bringing everybody back to laughter and understanding what the joy is of being with each other.” 

Appropriations would also give $20 million over two years to support local fairs and festivals, an increase over the governor’s one-year allocation of $6.375 million. 

The committee also proposes $50 million dedicated to a program making improvements to local parks such as installing new benches and tables and performing water quality tests. 

Osten likened the program to the New Deal-era Works Progress Administration, which employed people across the country to work on federal infrastructure projects. She said the program would act as a job-creator, and that the improvements would benefit families.

“What happened in the Depression was, many people were put to work and built up parks and trails, and those things are still used today,” she said. 

She said that Appropriations would encourage municipalities to use a portion of the federal dollars they received to invest in local parks.  

“Often they are one of the things that are cut from town and municipal budgets,” said Osten. 

The proposal retains Lamont’s $45 million in assistance to hotels and campgrounds, and adds an additional $40 million for a marketing campaign directed at attracting visitors from Canada, Maine, Vermont, New York and Pennsylvania. 

State Rep. Patricia Dillon, D-New Haven, said that this funding would help the economic recovery of the whole state. 

“A dollar invested in performing arts or in tourism ripples throughout our restaurants, and our restaurants ripple to our shellfish and our farmers,” said Dillon. 

Nonprofits and nursing homes 

The committee budgets $105 million in federal funding over three years for skilled nursing facilities.The proposal also sets aside $90 million over three years to private service providers, an increase from Lamont’s proposed $50 million over two years.

Walker said that the money would be directed toward operating costs, rather than capital improvements, and was intended to make sure that these organizations are able to address fixed expenses that will continue over the next few years. 

“We have to rebuild our nursing home industry in the state, and we have to pay for that,” she said.

Lamont said he believed that the investment in nursing homes was “premature.” 

State Rep. Michael France, R-Ledyard, told CT Examiner that he would have preferred to see the funds used for infrastructure, which “pays decades of dividends.” He said that the current tax revenue would not support that kind of funding for nonprofits long-term, and that he worried about what would happen after the federal funds ran out in two years. 

Appropriations would also set aside an additional $35 million for infrastructure projects in nursing homes, including upgrades to HVAC systems and technology, and $15 million would be put aside for grants to nonprofits to take up infrastructure improvements. The spending would be paid out of the federal Coronavirus Capital Projects Fund Allocation, a sum of $141 million dedicated toward infrastructure. 

Osten said that infrastructure improvements for nonprofits and nursing homes have “long been ignored.” 

The committee also retained the governor’s proposal of payments to workers, including $10 million to state-employed “frontline” workers and $12.5 million in direct payments of $500 to nursing home staff. 

Community health and violence prevention

The committee removed or cut funding for several items in the governor’s proposal related to health care, including an expansion of expanding the Office of Health Equity, providing telehealth for the Department of Mental Health and Addiction Services and funding local health departments. The committee said that these things would be funded through the state budget rather than federal funds because they required a longer-term investment. 

The proposal also substantially decreased funding for coronavirus testing, from Lamont’s proposed $240 million to $25 million. Osten said she believed that the insurance companies would start to pick up the cost of the testing.  

Lamont, however, warned in a news briefing against assuming that COVID was no longer a threat. 

“Don’t get too casual about the testing, it’s really important,” said Lamont. 

The committee did allocate an additional $9.5 million over two years for children’s mental health, part of which would be spent on developing a program to address trauma for children who living in urban communities. Osten said the program would be in connection with local private organizations.

“We don’t think there are enough programs out there for young people experiencing mental health [needs],” said Osten. “If we don’t provide the help for young people, the consequences are dire for the state.” 

The committee will also set aside $2 million for the state ambulance association.

“They were the frontline workers, they stepped up to the plate, yet they weren’t eligible for a lot of this [federal] funding,” State Rep. Catherine Abercrombie, D-Meriden, said in the meeting. 

Appropriation would also allocate $30 million for criminal justice services, including housing, residential treatment and expanded bail services for people being released from jail, and $50 million for violence prevention in municipalities with high unemployment rates and levels of crime. The money would help with job training for individuals affected by violence being served through programs like Project Longevity.

The Appropriations committee voted to send the plan to the legislative leaders 49-0, with two absent. Further discussions will take place between the governor and legislative leaders before a final plan is drafted.

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