Gov. Ned Lamont announced an expansion Friday of unemployment eligibility rules expected to channel more than $1,800 this winter to each of about 38,000 residents, most of whom lost low-paying jobs.
By spending $7.5 million from the state unemployment trust — which is already in debt — to slightly boost state benefits to those residents, Connecticut could leverage $55 million in additional federal benefits for its jobless.
“This pandemic is wreaking havoc with our health. It’s also wreaking havoc with a lot of families and small businesses,” Lamont said Friday during an online press conference. “In the meantime, we’ve got to do everything we can.”
The governor’s plan is centered on the Lost Wages Assistance Program, a federal supplement to state unemployment benefits that offered $300 in weekly benefits for up to six weeks between July 25 and Sept. 5.
Lamont said the program — which was authorized by an order from President Donald Trump — had a “significant drawback”: jobless residents needed to be collecting at least $100 per week in state unemployment benefits to be eligible for federal aid.
This excluded many who lost minimum wage and other low-paying jobs, the governor said.
Lamont now is ordering state labor officials to increase the weekly state benefits to $100 for the roughly 38,000 residents currently getting less than that. Department of Labor Commissioner Kurt Westby said this would cost Connecticut an estimated $43 per recipient.
But by doing this, these 38,000 recipients still can retroactively apply and qualify for six weeks of Lost Wage Assistance benefits, or about $1,800.
“It’s good news for our residents, it’s good for our economy,” Westby said.
The labor department will begin email and other outreach efforts this weekend to potential recipients, who must re-certify their unemployment status with the state to tap these benefits, Deputy Labor Commissioner Dante Bartolomeo said.
But Lamont’s new initiative does come with some financial risk to Connecticut businesses.
The state’s unemployment trust — which is supported by an assessment on businesses — already is in debt due to the coronavirus pandemic-induced recession.
Westby estimated Friday the state already has borrowed $419 million from the federal government to keep the trust solvent and added it likely will need to request another $250 million within the next month or two.
But Lamont and Bartolomeo noted that most states also have had to borrow funds to maintain unemployment benefits and are lobbying federal officials to waive this debt to help the economy recover.
The governor’s announcement came one day after the state House Republican Caucus called for several actions to protect Connecticut businesses and workers being squeezed during the pandemic.
The GOP’s proposals include granting businesses more time to pay outstanding municipal property taxes and delaying implementation of the payroll tax that will fund Connecticut’s new paid family and medical leave program.
“By many accounts, we’re at the precipice of a second wave — yet we’re miles away from any sort of cohesive, forward-looking effort to build an environment where businesses can recover. It’s still a day-by-day approach,” said House Minority Leader Vincent J. Candelora, R-North Branford. “Employers and entrepreneurs hold an expectation that policymakers should make their climb out of this nightmare easier, but it’s roughly nine months into this pandemic, and struggling business owners continue to tell us that state government is falling short of making them feel like they’ve got a partner in this crisis.”