Lamont, legislators agree to boost essential worker bonuses, extend gas tax holiday
Gov. Ned Lamont said Thursday he will call the General Assembly into special session by month’s end to increase funding for pandemic worker bonuses and heating oil assistance and to extend the gas-tax holiday and free bus service.
“We met with the legislative leaders on both sides of the aisle, and I think we reached broad agreement,” Lamont said.
Suspended on April 1, the 25-cent-a-gallon tax on gasoline will be phased in over five months at a nickel a month from Dec. 1 through May 1, sparing consumers an overnight price shock, Lamont said.
Without action in a special session, the full 25-cent tax would resume on Dec. 1.
Free bus service also would continue until May 1, Lamont said.
House Speaker Matt Ritter, D-Hartford, and Senate President Pro Tem Martin Looney, D-New Haven, said the Democratic governor and legislative leaders resolved the subjects to be tackled in a lame-duck special session while leaving some specifics subject to further negotiation.
The governor spoke to reporters at the opening of Hartford HealthCare’s new downtown Hartford headquarters.
The governor’s meeting with lawmakers came on the same day that Eversource and United Illuminating filed rate increase requests that would produce 40% increases in electricity bills, adding to the inflationary pressures already felt by consumers and businesses.
Lamont later issued a statement that the Eversource and UI rate increases underscored the need for increasing assistance to consumers for heating oil and electricity.
Lamont and lawmakers cut taxes this year, but the question of using the state’s budget reserves for further relief from the pressures of the highest inflation in 40 years was a campaign issue in the legislative and gubernatorial races.
Republican lawmakers pressed in August to increase funding for LIHEAP, the Low-Income Household Energy Assistance Program, correctly predicting that applications for home-heating oil assistance would increase sharply.
“LIHEAP was our idea. The gas tax reduction is our idea,” said Senate Minority Leader Kevin Kelly, R-Stratford.
Before the election, Ritter had floated the idea of a special session to extend the gasoline-tax holiday that contributed to Connecticut being in the unaccustomed position of having the cheapest gas in the northeast.
The average price of a gallon of regular cost an average of $3.75 in Connecticut on Thursday, compared to $3.84 in Massachusetts and $3.88 in New York, according to the AAA gas tracker. But the price is 26 cents higher than a month ago. The national average is $3.72.
Retail prices of regular gasoline peaked in Connecticut on June 14 at $4.98 per gallon and dropped for much of the summer before climbing this fall.
Inadequate funding for the essential worker bonuses came into sharp focus Wednesday, with the comptroller-elect, Sean Scanlon, warning that promised payments would be slashed without more resources.
Lamont said Thursday he agreed to increase funding for essential-worker bonuses from $35 million to $90 million, a sum short of the $130 million necessary to pay most qualified applicants the promised $1,000 bonus for working during COVID-19.
The Premium Pay program included in the budget was created to reward private-sector workers in essential health care, public safety, education and food service jobs for their service during the pandemic.
“Gov. Lamont declared these workers essential by executive order,” said Ed Hawthorne, president of the Connecticut AFL-CIO. “That meant they were forced to show up to work oftentimes without adequate personal protective equipment, without vaccines, and at great risk to their physical and mental health.”
Scanlon said that without additional funding, the bonuses for more than 134,000 approved applicants would be reduced by 77%, meaning applicants who had qualified for $1,000 bonuses would receive about $233.
Hawthorne said state officials knew from the time the bonus program was enacted that it was inadequately funded.
“At the bare minimum, the governor and legislature need to keep their promise to essential workers and fully fund the pandemic pay program,” he said.
The governor said the administration and lawmakers will structure the bonuses based on need, exactly how yet to be determined.
“I think there was broad agreement — need-based makes a lot of sense. And I think it makes sense,” Lamont said.
House Minority Leader Vincent J. Candelora, R-North Branford, said he had doubts about using federal funds from ARPA, the American Rescue Plan Act, for bonuses.
“We continue to use the ARPA funding for the ghosts of the past. And I think we need to address the post-pandemic issues with that money. I think it should be targeted,” Candelora said.
Lamont said the administration was still talking with lawmakers about whether to use federal relief funds or state surplus funds for the bonuses.
Candelora said Republicans would be heartened, however, by the governor seeming to favor broadening the income eligibility rules for heating oil assistance.
“Oil is going to become more unaffordable for residents,” Candelora said.
Lamont and lawmakers conditionally agreed Thursday to commit more state funds for LIHEAP in the event Congress doesn’t allocate enough resources to meet the demand.
The $90 million in federal funds that Connecticut has gotten will be far too little, said Brenda Watson, executive director of Operation Fuel.
The Hartford-based nonprofit energy assistance group helped roughly 6,500 households cover their heating and other energy bills between July 1, 2021 and June 30 of this year — with the highest demand coming during the winter months.
Operation Fuel’s caseload between July and Oct. 31 of this year already has hit 4,000 — about double those served during the first four months of the last fiscal year.
She and Republican legislative leaders have said the LIHEAP program can easily need $200 million or more to meet the full demand, but Connecticut has never expended state dollars to complement federal funds in this program.
Advocates for LIHEAP say the state needs to guarantee a higher assistance level now, even if it means eventually reaching into its own coffers. The alternative, they add, will be many poor families skimping immediately on their health care and grocery budgets to keep their homes heated.
While Lamont repeatedly warned during the campaign season that Connecticut needs to brace for the revenue shortfalls that would come with an expected recession, he is approaching the next state budget cycle with record budget reserves.
Connecticut has $3.3 billion in its rainy day fund, and the surplus projected for the current fiscal year is expected to approach $2.8 billion, based on a new report upgrading revenue estimates.
He and the General Assembly also have reserved about $1.4 billion in emergency federal pandemic aid to help support state finances in the 2023-24 and 2024-25 fiscal years.