Connecticut legislators recommended changes on Monday to Gov. Ned Lamont's spending proposal for more than $2.8 billion in federal COVID-19 relief funding, including using more of the money to help replenish the state's hard-hit unemployment trust fund and boost funding for the tourism industry and struggling nursing homes.
Members of the Democratic-controlled Appropriations Committee voted unanimously for the retooled plan, despite some Republicans wanting more of the historic financial assistance from Washington spent on paying down the $725 million the state had to borrow from the federal government during the pandemic to ensure unemployment claims were covered.
Such loans are typically repaid by an increased tax on employers. While Lamont's plan dedicated $50 million from the state's share of the $1.9 trillion federal COVID relief legislation, known as the American Rescue Plan, the committee increased that amount on Monday to $310 million.
“Anything we can do to take the edge off of that additional tax is going to be helpful,” said Sen. Craig Miner, R-Litchfield, the top GOP senator on the committee. “But again, if the budget was in my hands, I think I’d be trying to move toward a doubling of that," arguing it would ultimately lead to more residents keeping their jobs.
He suggested focusing less of the federal COVID money on the tourism industry. The committee, unlike Lamont, set aside $40 million for a statewide marketing campaign to pitch Connecticut as a tourist destination to additional markets, including Canada. Both Lamont and the committee agreed to dedicate $45 million to help the hospitality industry, which was hit hard by the pandemic. The committee also devoted $20 million to help support local events, such as fairs and concerts, while Lamont had set aside nearly $6.4 million.
Proponents noted that tourism, which includes everything from hotels to attractions, is important for helping to rejuvenate the state's economy.
“We need to make Connecticut good for Connecticut people and for people to come from outside of the state,” said Rep. Toni Walker, D-New Haven, the committee's co-chairman.
The committee's plan for the federal money, which accounts for about $165 million in additional aid the state recently learned it's receiving, was sent Monday to the top two Democratic leaders of the House and Senate. While the full General Assembly must ultimately vote on the final allocation of the funds, it's unclear if it will be wrapped into a final two-year state budget agreement or passed as a separate piece of legislation.
The committee's plan would spend more than $1.6 billion of the money on balancing the new two-year budget, replacing state revenue lost during the height of the pandemic. Lamont's plan proposed spending more than $1.7 billion.
Lawmakers ultimately agreed with much of Lamont's proposal. For example, both plans include spending $12.5 million in the next fiscal year on a second round of $500 incentive payments to direct care nursing home employees and $10 million to provide “financial recognition” to state “essential workers who gave us security during the COVID pandemic.” Both plans also include $20 million over two years to provide legal assistance to people facing eviction.
However, the committee slashed Lamont's proposed allotment of $240 million over two years for continued COVID-19 testing. It was reduced to $25 million in only the first year of the budget. The committee said Connecticut has led the nation in responding to the pandemic and $25 million should cover the state's testing needs.
Lamont said his administration believes continued COVID-19 testing will still be needed by community health centers and schools.
“There’s room for discussion there, but don’t get too casual about the testing,” he warned lawmakers. “It’s still really important.”
The committee also set aside money for some proposed legislative initiatives, including $50 million toward a new state “equity fund” that would be used to address violence in cities with high crime rates and unemployment rates at 9% or higher. There's also $10.2 million over two years for a new home-based, mental health program for young, vulnerable children.
Additionally, the committee set aside $105 million over three years to help skilled nursing facilities, many of which are experiencing declines in occupancy rates and challenges in attracting enough workers. The committee's plan also dedicates $35 million for nursing home infrastructure improvements, such as air filtration systems, while Lamont's plan included $20 million.
The governor called the funding “premature,” noting his administration just made a nearly $300 million deal with the nursing homes and unionized workers, which led to a threatened strike being postponed.
Nora Duncan, state director of AARP of Connecticut, also questioned such large amounts of funding for nursing homes. She said now is the time to reexamine how the state can instead accommodate the large numbers of people who want to remain in the homes with assistance.
“If censuses are way down, I don’t think we’re in a position where we should be looking to fill those beds,” she said. “We should be looking to figure out a new way to care for people, a better way to care for people the way people want to be cared for."