The AABC joined other small business groups this week in calling on the Lamont administration and lawmakers to address the unemployment debt crisis that threatens the state’s economic recovery.
Connecticut borrowed $888 million from the federal government in 2020 and 2021 to pay record pandemic-related jobless claims.
To date, $425 million in loan repayments have been made, with employers covering $300 million and federal COVID relief funds repaying $125 million (plus $26 million in interest).
Employers are responsible for the remaining balance of the $463 million loan and face four years of tax hikes, starting this fall, to cover those repayments.
“It took six years of increased unemployment contributions to employers to pay off federal loans following the 2008-2010 recession and we can’t hold that debt back on small businesses any longer,” the president and CEO said. of AABC Executive Chris DiPentima during a press conference April 12 at the State Capitol.
“State and federal unemployment taxes will rise 22% by 2026, money better invested by employers to deal with the labor crisis, the greatest threat to the Connecticut’s economic recovery.”
Small Business Coalition
DiPentima noted that a late March-early April poll by Public Opinion Strategies of 500 registered voters found broad support for state debt repayment, with more than two-thirds of voters agreeing with the proposal. .
The AABC, NFIB Connecticut, Connecticut Restaurant Association, Connecticut Food Association, Connecticut Retail Merchants Association, Lumber Dealers Association of Connecticut, and the Greater New Haven and Quinnipiac Chambers of Commerce attended the press conference.
Three small business leaders: Wendy Traub, president of Torrington-based Hemlock Directional Boring; Carmen Romeo, owner of Fascia’s Chocolates in Waterbury; and Keith Beaulieu, owner of the Main Pub in Manchester and chairman of the ARC, explained how these tax hikes were hurting their ability to recover from the pandemic.
They were joined by the House Republican leader Vincent Candelora (R-North Branford), Republican leader in the Senate Kevin Kelly (R-Stratford), senator. Craig Miner (R-Litchfield), and representatives cheese holly (R-Niantic), Laura Devlin (R-Fairfield), Tom Delnicki (R-East Windsor), and David Rutigliano (R-Trumbull).
NFIB Connecticut State Director Andy Markowski said while the Legislature has recently taken positive steps to help small businesses recover from the pandemic, employers are still hurting and worried about rising costs. .
“Here’s what we know: our small business owners are bearing the brunt of the unemployment debt crisis,” he said.
“That’s why we’re again calling on the General Assembly and the Governor to help pay off the hundreds of millions of dollars of outstanding unemployment fund debt.”
CRMA President Tim Phelan said retailers of all sizes have endured a tough two years and the threat of tax hikes is making it more difficult to continue business.
“Legislative action to ease this burden is necessary, appropriate, and necessary to better enable retailers to continue their important role in Connecticut’s economic recovery, for the benefit of their customers and communities,” he said.
Beaulieu said that with Connecticut experiencing record surpluses and lawmakers proposing new spending programs, “it’s hard to understand why lawmakers aren’t willing to help small businesses.”
“Small businesses like mine are still working to recover from the pandemic while facing new challenges like inflation, rising cost of goods and labor shortages,” he said. declared.
“Unless the unemployment-related debt crisis is resolved, many small businesses will continue to be at risk.”
Traub said Hemlock has been in business for more than 25 years, but COVID-19 and other challenges, including the threat of higher taxes, threaten to shut down his small business.
“Our company is trying to increase its workforce, but there is always a constant fear that the state may, once again, impose operating restrictions or develop new taxes or increase taxes on business owners,” she said.
“This creates uncertainty and limits our investments in new capital equipment or additional manpower. For economic recovery to succeed in Connecticut, we must be confident that the government recognizes and supports our efforts.
‘Do the right thing’
Romeo said Waterbury-based Fascia’s Chocolates hadn’t laid off any employees during the pandemic and, like many small businesses, was frustrated at having to pay federal loans.
“Legislators need to do the right thing and ease this burden on small businesses,” he said.
Candelora said that so far this session, lawmakers’ efforts to address business leaders’ concerns have been insufficient or, in the case of the Labor and Public Employees Committee agenda, “the opposite.” of what is necessary”.
“We have less than a month left in the session to address perhaps the main issue, the federal unemployment debt repayment, and I implore my colleagues to come back to this issue during budget discussions,” he said. -he declares.
Kelly said that without action, the tax hikes imposed on employers “would place a financial burden on the creation of new jobs”.