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Lamont Proposes Unemployment Trust Relief and Financial Support for Hospitality, Arts in Plan for Spending Connecticut Share of American Rescue Plan Funds

  • Governor Ned Lamont issues plan on how Connecticut should allocate $2.6 billion in anticipated funds under the American Rescue Plan
  • Funding for economic initiatives includes starting the process of replenishing Connecticut’s unemployment trust and direct support for hospitality, arts, and entertainment businesses
  • Connecticut’s legislature must come up with its own proposal by May 16

Summary by Dirk Langeveld

Connecticut’s share of funds through the American Rescue Plan would ease the burden on employers of replenishing the state’s depleted unemployment trust, support the arts and hospitality industries, and prop up major event venues in the Hartford area under a plan proposed by Governor Ned Lamont.

Connecticut is estimated to receive $2.6 billion via the Coronavirus State Fiscal Recovery Fund, and the money must be spent by the end of 2024. The funds may only be used for certain purposes, such as responding to the negative economic impacts of the COVID-19 pandemic, covering government revenue losses resulting from the pandemic, supporting essential workers and companies that employ them, and improvements to water, sewer, or broadband infrastructure.

Lamont says his plan focuses on addressing the ongoing pandemic through testing, vaccines, and other programs; investing in the future through initiatives like improved internet access and support for nonprofits; improving affordability through measures such as better child care access and financial support for higher education; achieving more equitable economic growth; and modernizing the state government, primarily by balancing the budget and improving health and human services.

Lamont said the economic investments will be done in conjunction with other initiatives identified in the state’s Economic Development Action Plan, including $315 million in bond funds, $164 million in tax credits and grants, $100 million in State Small Business Credit Initiative funds, and $938 million in private funding. The overall economic development initiatives aim to support 80,000 jobs over time, retain residents, support underrepresented business owners such as women and minorities, and assist distressed municipalities. Some key investments include:

  • $50 million to support the Unemployment Trust Fund, preventing a $19 million special assessment that would otherwise be charged to employers to cover interest due this fall on approximately $894 million borrowed from the federal government after the trust was depleted during the pandemic. The money would also go toward starting principal payments, mitigating the tax impact on employers
  • $45 million for tourism support and regulatory modernization, spent over the 2022 and 2023 fiscal years. This allocation would support businesses in the hospitality sector, establish a marketing campaign to promote Connecticut tourism, and modernize the state’s regulatory and licensing requirements to make it easier to start and run a business in Connecticut
  • $30 million for the Department of Labor’s unemployment contact center over the 2022-2024 fiscal years to support enhanced staff and operations as Connecticut experiences an elevated unemployment rate
  • $7 million to the Capital Region Development Authority over the 2022 and 2023 fiscal years to assist the CRDA, which had a $10.5 million deficit in the 2021 fiscal year due largely to event cancellations. The funding aims to stabilize the Connecticut Convention Center, Rentschler Stadium, and XL Center until they can resume events, allowing the venues to continue to be significant economic drivers in the Hartford region
  • $6.375 million to support arts and entertainment venues that have “experienced economic dislocation,” with funding to be disbursed in the 2022 fiscal year

Lamont previously released details of a proposal included in the plan to invest $103 million in workforce development. The bulk of this money would support sector-based training programs for 9,000 workers.

The plan was released Monday to leaders and committees of the Connecticut General Assembly. The legislature must present its own plan by May 16, after which the executive and legislative branches will negotiate a final determination for how the federal funds will be allocated.

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