CT lost 850 businesses, nonprofits in COVID’s 1st year
In the first year of the pandemic, Connecticut’s employer count dwindled by roughly 850 businesses and nonprofits, according to new U.S. Census Bureau estimates.
However, startups likely filled some of that gap as 2020 progressed that were not reflected in surveys.
In raw numbers, retailers that employ five to nine people in Connecticut saw the biggest attrition in the first year of the pandemic, census surveys suggest. The state absorbed a net decline of about 140 of those smaller stores, equating to about one of every six entities that comprised Connecticut’s overall decline across all businesses and nonprofits.
A portion of the loss could have been the result of stores shedding workers to keep the doors open. The Census Bureau recorded a net gain of about 60 retailers with four or fewer employees, with larger stores possibly dropping into that category as they tightened payroll.
The nonprofit health care industry had the biggest single gain during the initial year of the pandemic, with Connecticut adding about 100 new organizations, the data shows. During the pandemic, Connecticut and other states tapped federal funding to bolster services for people who were unable to visit offices that had closed, or hesitant to return given the quick transmission of COVID-19.
With income and sales tax revenue booming, Gov. Ned Lamont is finalizing negotiations this week with the General Assembly for what he calls the biggest round of tax cuts in Connecticut history, many of them focused on individuals and families, but with a gas tax holiday and other measures to benefit businesses as well.
“This is our third year of surplus,” Lamont said Monday. “We’re making key investments going forward.”
In recent weeks, Lamont has continued to highlight the potential for startups to boost the Connecticut economy through organic growth, rather than handing incentives to established employers. Despite that stance, however, Lamont wants a tax credit for employers with at least 25 workers who commit to adding more.
In 2020, just over 64,200 Connecticut businesses and nonprofits committed to keeping payrolls intact in exchange for forgivable loans in the first installment of the federal Paycheck Protection Program. Other programs followed like the Economic Injury Disaster Loan, the Restaurant Revitalization Fund and the Shuttered Venues Program.
But many businesses still closed permanently — some due to struggles they
were already having when the pandemic hit. For others, proprietors elected to take an extended hiatus for personal or health reasons, or were close enough to retirement to fast-forward those plans.
Of industries specified by the Census Bureau by size of employers, the state’s smallest finance and hospitality businesses — those supporting four jobs or fewer — saw the next biggest drops after the retail sector. About 100 fewer finance and hospitality businesses survived the first of the pandemic, the data shows.
By the second year, the combination of massive government aid and mass vaccine availability produced an economic turnaround.
“We’ve advocated for a lot of small-business tax relief in the current session, now that we have the money to invest in small businesses,” Chris DiPentima, CEO of the Connecticut Business & Industry Association, said in a Hearst Connecticut Media interview last week. “There’s not as much as we would like.”
In raw numbers, retailers that employ five to nine people in Connecticut saw the biggest attrition in the first year of the pandemiccensus surveys suggest. The state absorbed a net decline of about 140 of those smaller stores.