The Register Citizen (Torrington, CT)
State, towns could see $4.3B in pandemic bill
WASHINGTON — More than $4 billion in state and local government relief is expected to flow to Connecticut and its cities and towns from the next coronavirus relief bill working its way through Congress, documents show.
The Connecticut state government would receive about $2.7 billion in the next relief bill, according to a draft of proposed allocations from the U.S. House of Representatives obtained by Hearst Connecticut Media.
Separately, cities and towns would share more than $1.6 billion — in addition to more than $400 million in local school aid that Congress approved in December.
New Haven, for example, could receive an additional $88 million directly, plus $24 million as part of its share of money designated for New Haven County. Bridgeport is slated for $79 million and could see $25 million of the Fairfield County share.
All cities and towns would receive money, not just those in financial distress, under the federal proposal, which totals $1.9 trillion. The proposed state allocation is more than the combined, projected shortfalls of the next two fiscal years.
“That’s a lot of money for our state our size,” said Chris McClure, spokesman for the state’s Office of
Policy and Management, noting that the state’s general fund is only about $20 billion.
The administration of Gov. Ned Lamont has not made decisions on how it would prefer to use the money, McClure said, as exact funding levels and spending rules are not in place. With Democratic majorities in both chambers, President Joe Biden has said he supports large outlays for state and local governments, a policy many Republicans oppose.
Lamont on Wednesday proposed a 2-year, $46 billion spending plan that relies on $1.6 billion in federal money over the next two fiscal years to wipe out shortfalls of $1.3 billion per year. Other strategies in the governor’s plan include taxing heavy trucks, generating $90 million a year; consolidating and making state buildings and departments more efficient for a $250 million savings; and eliminating state employee union pay raises for $140 million in savings, a plan unions called unfair.
The governor and General Assembly will feel pressure to use the federal bounty to help people devastated by the pandemic recession, and to use it to reduce the state’s debt and unfunded pension liabilities, which cost taxpayers billions of dollars a year.
A boon for towns
For Connecticut’s cities and towns, the money would be the largest windfall of direct federal relief they’ve received thus far during the pandemic, and possibly ever.
Municipal officials cheered the forthcoming aid in interviews Friday, hopeful it would help them shoulder the expensive burden of numerous costs the pandemic is adding to their budgets.
“Whatever we’ve been allocated so far has been used up so the fact that we’re going to get additional relief is a huge bonus,” said Lauren Rabin, a member of the Greenwich board of selectmen. Greenwich would receive about $19 million plus its share of Fairfield County money.
New Haven — a city staring down a $13 million shortfall this fiscal year and $66 million shortfall in 2021-22, not including pandemic impacts — is slated to receive the most aid of any municipalities in the state at $88 million. The money would not wipe about that the city’s structural budget problems, meaning the yearly gap between tax collections and costs, but it will help bolster the city’s fight against coronavirus, Mayor Justin Elicker said Friday.
“We, like many municipalities, are very anxious for clarity on any federal money that may come to the city,” Elicker said. “Particularly in this moment with the deep, deep economic and health impacts of COVID, additional funding injected into the city and community would be very helpful.”
Hartford would receive $86 million, Bridgeport $79 million, New Britain $40 million, Stamford $23 million and Norwalk $20 million — all in addition to their shares of county aid.
These sums could be revised down slightly when the Senate finalizes its version of the bill, according to a senior congressional aide.
Because the state does not have county governments, federal aid aimed at counties would be split among towns in each county based on population, said Joe DeLong, executive director and CEO of the Connecticut Conference of Municipalities. That aid totals about $190 per resident according to the bill documents — for example, $5.4 million for Westport.
What it means for the state
Connecticut would receive a lump sum of about $2.7 billion within 60 days after Congress passed its proposed, $1.9 trillion coronavirus bill, according to provisions of the House version of the legislation. Democrats in Congress are barreling toward passage with the goal of having Biden sign the bill into law before mid-March when federal unemployment benefits expire again.
This funding is intended to be more flexible that previous money Washington sent to states. The eligible uses are quite broad: respond to or mitigate the public health emergency from COVID; cover costs incurred as a result of the crisis; replace revenue that was lost, delayed, or decreased as a result of such emergency; or address the negative economic impacts of such emergency, a House democratic aide said.
“We would need to know if there were restrictions on the use
of such support from the federal government before saying precisely how the funding would be used,” Lamont spokesman Max Reiss said, “and we would comply with such guidance to defeat COVID-19, make Connecticut more affordable, invest in our future, make state government more efficient, and foster economic growth for all of our residents.”
The state would use some of the federal dollars to pay for scheduled increases in state funding for education and municipalities, McClure said. The state would maintain its contribution at current levels and use the federal dollars to pay for the increase, he explained.
Addressing local needs
Municipal officials said they had little idea how they might use millions of dollars heading their way because too many questions remain. Many towns and cities, like the state, have significant pension and health obligations in addition to regular operations to fund.
“We certainly need the additional money,” said David St. Hilaire, the Danbury finance director, before launching into a list of questions about how he
could use the money and how it might off set aid the city is expecting from the state.
So far Danbury has not had to forgo steps to fight the coronavirus because of a lack of money, St. Hilaire said. But the expenses are piling up and he predicted that the city will have to reduce its budget next year as a result.
Elicker of New Haven also said his city has not been constrained by a lack of funding for health initiatives. Additional funding could “dramatically” improve the city’s ability to help local residents weather the pandemic in safer ways.
“Our nurses are underpaid compared to industry standards,” he said. “But it’s also the secondary effects on the economic side and that’s everything from the significant cost of police overtime last year because of an increase in violence and other illegal activity like drag racing, ATV and dirtbike riding that we saw last year... to costs around ensuring our young students have access to youth program to support for the homeless.”
Revenues from business inspections, parking tickets and even building permits are down due to the pandemic in many municipalities, slashing one
source of funding for cities and towns.
For many towns, it’s unclear how coronavirus will impact their property tax receipts. Some will go through property revaluations this year or next and the virus could upend the value of commercial property in hard-hit areas where businesses have shuttered.
Towns and the state have also been able to get reimbursement for some coronavirus-related costs, including vaccine distribution, from the Federal Emergency Management Agency.
Earlier, the coronavirus relief bill Congress passed in March included some state and local relief, but money intended for municipal governments was distributed by the states, who had large discretion over how exactly to handle it.
“Even in Connecticut, we’ve seen some of these funds be held up or been used for things they were not intended to be used for,” DeLong said, while acknowledging that the state was shouldering some costs on behalf of towns that other states were not covering.