Conn. cities, towns $470M in the hole

Municipalities struggle with virus-depleted budgets as they await action on disaster relief from Congress

While federal disaster relief can be used to cover coronavirus-related costs, it can’t apply to lost revenue for the state and municipalities.

HARTFORD — Connecticut’s coronavirus pandemic has left towns and cities with massively depleted budgets that could lead to public employee layoffs, program cuts and higher local property taxes unless Congress approves another round of disaster relief.

The Connecticut Conference of Municipalities estimates at least $470 million is needed to balance local budgets, which have been stretched thin during the last four months.

The nonpartisan CCM reports that coronavirus related expenses have affected communities of all sizes. Along with $407 million in revenue losses or delays, is $63 million in unexpected costs, to combine for major problems, eating up emergency savings.

While federal disaster relief can be used to cover coronavirus-related costs, it can’t apply to lost revenue for the state and municipalities.

Gov. Ned Lamont said Thursday many groups have requested a portion of the state’s $1.4 billion Coronavirus Aid, Relief, and Economic Security Act (CARES) funding from earlier congressional action.

“I can tell you that the educators want a third of it,” Lamont said. “I can tell you that the hospitals want a third of it. I can tell you that state government in terms of overtime and things, need another third of it. I can tell you the notfor-profits need a third of it. I can tell you if we’re going to do the testing we need to do, that takes a third of it. One thing the CARES Act did not do was provide for the loss of revenue. We’ve lost probably $2 billion to $3 billion in revenue in this next fiscal year.”

He hopes the U.S. Senate acts soon on a second round of funding.

“We’re already in the fiscal year and there’s a big hole there that we don’t quite know how to fill,” Lamont told reporters.

Lamont said he has had to reject the request from state hospitals for $450 million in expenses they have incurred since the pandemic hit four months ago.

Appearing during a news conference with the governor, U.S. Sens. Richard Blumenthal and Chris Murphy said they expect after the two-week congressional recess brings the Senate back to Washington next week, Republicans who have been reticent to extend a second round of funding, are likely to be more helpful as COVID-19 infections are rising in more than 40 states.

The U.S. House of Representatives has approved a two-year, $870 billion Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES) that would give New Haven $250 million in the first year, Bridgeport $163 million, Norwalk $41 million, Danbury $31 million,

Greenwich $40 million, Stamford $41 million, Middletown $23 million and Torrington $11.3 million.

“We’ve got to get this passed on a timely basis,” Lamont said. “This allows our universities to know what to count on as they go forward. This allows our local municipalities to plan accordingly. Tell us whether th feds will pay for testing. These are the type of things that allows us to plan and keep the good work we’ve got going in the state of Connecticut right now.”

Murphy said that the state needs the $7 billion set aside under the House legislation, which will be awaiting returning senators next week.

Blumenthal who earlier in the day discussed the pandemic with operators of child centers, said that without added support, more than 80 percent of state day care centers will have to shut down by early 2021. “It’s a perfect storm,” Blumenthal said. “This is a national scandal. It’s a disgrace.”

Blumenthal said that during his travels around the state over the last two weeks, he has been impressed by the state’s ability to cooperate and be courteous to others. “Leadership for the nation is what Connecticut has provided,” Blumenthal said, warning Senate Majority Leader Mitch McConnell of Kentucky will be in the position “to lead or get out of the way.”

Lamont suggested that the $128 billion still left in

the forgivable federal Paycheck Protection Program, should be reopened for small businesses to make a second round of loans, especially restaurants and bars that haven’t been allowed to reopen or only allow 50 percent indoor occupancy.

“A lot of them still can’t open,” Lamont said. “A lot in hospitality: bars, events. Allow those companies that we’ve still closed down an option to get a second PPP loan. That would give them another 90 days as we get this economy going.”

Murphy said it’s a good idea, which could be allowed under a new law, or possibly through an order from the federal Treasury.