Comptroller Kevin Lembo Keith M. Phaneuf /

State Comptroller Kevin P. Lembo warned Monday that Connecticut’s economic gains since the depths of the pandemic could soon slip away without more federal aid.

The comptroller also confirmed recent projections that the state’s coffers have swollen, not shrunk, since the pandemic began.

“It’s decision time,” Lembo said. “Our state economy is showing signs of recovery from the devastating effects of the COVID-19 pandemic, but without a significant investment from the federal government, those gains may slip away, and Connecticut families and businesses will suffer.” 

Comptroller Kevin P. Lembo file photo

The state has recovered more than 100,000 jobs that were lost when the pandemic struck in mid-March or shortly thereafter, according to the comptroller. But jobless levels remain near record-highs and overall employment remains down 172,000 positions from one year ago.

Low-wage workers face the greatest burden, Lembo added, noting that according to the Federal Reserve, about 40% of households nationally earning less than $40,000 per year had lost at least one job by May.

Congress has approved four rounds of pandemic relief, but Capitol Hill has been stuck in partisan gridlock for months over the prospect of a fifth package.

Lembo said another wave of federal pandemic relief is crucial for Connecticut, and the nation, to survive an economic slump.

“I am urging Congress to consider the human cost of delaying further financial assistance,” he said. “Without sufficient support, Connecticut and nearly every state across the country, will see spikes in evictions, foreclosures and bankruptcies, and the jobs we’ve yet to recover may be lost permanently. State and local governments will be forced into impossible budgetary choices.”

The Republican-controlled Senate has ignored a massive relief bill approved in mid-May by the Democrat-controlled House. Negotiations between parties over a new relief package are ongoing, but showing little progress.

“I can tell you that this is one of the most frustrating and frightening moments of my entire political life,” U.S. Sen. Richard Blumenthal, Connecticut’s D-Conn., said during a news briefing Friday in Hartford. 

The Senate GOP caucus is sharply divided over whether to approve additional aid, and Majority Leader Mitch McConnell has allowed that division to paralyze him, Blumenthal said. “So we are saying, to Mitch McConnell, … ‘lead, follow, or get out of the way.’”

One form of relief that is crucial in any third federal package, Lembo, a Democrat, said, is an extension of the $600 supplemental weekly unemployment benefits that lapsed on July 31. Other key areas, the comptroller added, include aid to low-wage workers who have been harmed by contractions in the service industry, and grants that can replace revenues states and municipalities have lost since mid-March.

Despite the uncertainty of more federal relief, Connecticut is better poised than many other states to face a recession. On paper, the state finished the 20119-20 fiscal year on June 30 with a $128.1 million deficit, Lembo wrote.

But since 2018 the state also has followed new rules that force it to save a portion of state income tax receipts tied to capital gains and other investment earnings. Once the nearly $320 million in mandated savings for 2019-20 is applied, the deficit is eliminated and the rainy day fund is projected to grow from $2.5 billion to $2.8 billion.

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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