Christopher Keating
The Hartford Courant
HARTFORT, Conn. — Moving far faster than usual, the state legislature voted overwhelmingly Tuesday for Gov. Ned Lamont’s plan to provide state-backed, no-interest loans to federal employees who have not been paid during the long-running shutdown.
Lamont immediately signed the bill into law and said that “dozens’’ of federal employees had already submitted their applications for bank loans even before the measure was passed.
Describing the bill as “a bipartisan victory,’' Lamont gathered in his Capitol office with the top Democratic and Republican legislators who were smiling on the passage of the year’s first bill.
“I just want to say what you do in government makes a real difference, and I want to thank you all for what you did,’' Lamont said to legislators gathered around his desk.
The emergency bill passed in the House by 127 to 15 with 15 conservative Republicans voting against the measure after saying that the federal workers were being given a special deal on no-interest loans that are not available to any other class of workers. Democrats countered that the federal employees are in a unique situation as the only workers being forced to work without pay at the same time that they are also ineligible for unemployment compensation because they are still employed.
The bipartisan bill was immediately sent to the Senate, which approved the measure about one hour later by 32 - 1. The only senator in opposition was Republican Rob Sampson, who raised similar concerns as his House colleagues regarding the bill’s fairness.
The money will help the workers pay for the daily expenses of food, gasoline, heating oil and day-care for their children, lawmakers said.
The partial shutdown has passed a full month at Day 32 as about 800,000 employees nationwide have not been paid, including air traffic controllers and Transportation Security Administration baggage checkers at Bradley International Airport in Windsor Locks. In Connecticut, about 1,200 workers have not been paid, and they will be eligible for three loans as high as $5,000 per month for a total of $15,000 per person.
Lamont initially said he was stunned to learn that the unpaid federal employees, including environmental administrators and prison guards, are not eligible for unemployment compensation benefits. About 80 percent of the 1,500 federal workers in Connecticut will be eligible for the interest-free, state-backed bank loans because they have been classified as “essential’’ workers who cannot currently receive unemployment compensation. These include Coast Guard employees, federal court employees, and correction officers at the Danbury federal prison.
The state legislature moved quickly at a time when the bill states that “no loans shall be made under the program after the shutdown ends.’'
Under the emergency certified bill, the legislature voted without any public hearings or committee votes.
“Look how fast the government and the private sector got together,’' said Senate Republican leader Len Fasano of North Haven. “This is a huge step in the right direction in this building. ... I hope this sets the tone for the rest of the session in both chambers.’'
Senate President Pro Tem Martin Looney, a New Haven Democrat, said that the quick action showed that the legislature can work on a bipartisan basis to help state residents.
“We’re not always caught up in a ponderous process that leaves people hanging and suffering,’' Looney said. “This is a Connecticut issue. It is not just a federal issue.’'
Sen. John Kissel, an Enfield Republican whose district includes Bradley airport, said that airport security is highly important as the nation continues battling to prevent terrorism.
“There’s many folks in Connecticut who live paycheck to paycheck,’' Kissel said on the Senate floor. “We’re not all living in great wealth, and it’s a struggle. ... Once you go a couple of cycles without a paycheck, bad things can happen very quickly’’ that could lead to mortgage foreclosure.
Assuming that a cumulative maximum of $21 million in loans are awarded, the maximum assumed risk for the state is as high as $2.1 million, according to the nonpartisan fiscal office. But based on national rates for delinquent loans, the state would likely lose less than $500,000 in the next fiscal year, the office said. Overall, the state’s risk is 10 percent of the loans, but some lawmakers said they thought the default rate would be low because the federal workers will receive back-pay when the shutdown ends.
The bipartisan, eight-page bill was expected to pass because it has the backing of the top six legislators in the General Assembly, including Looney, Fasano, House Speaker Joe Aresimowicz of Berlin, and House Republican leader Themis Klarides of Derby.
“What a noble first act,’' deputy Senate Republican leader Kevin Witkos said of Lamont. “It really captured my attention. ... This is a temporary fix until they figure things out in Washington.’'
While some Republicans were against the idea on philosophical grounds because workers were not being treated uniformly, Klarides said there would be other times to fight against Democrats.
“I want to thank the governor for his creative thinking - out of the box,’' Klarides said. “This is the kind of thinking that will move the state of Connecticut forward. ... We’re doing something to help our citizens who are victims of the dysfunction in Washington. This is a Washington, D.C.-government problem.’'
Ritter said there were no other workers in the state who are being forced to go to work and cannot apply for unemployment compensation.
“In the private sector, it would be illegal to force you to go to work and not pay you,’' Ritter said. “We have to help these people. ... Some people don’t have a cash flow to wait for back pay. They don’t have the cash flow.’'
Legislators and attorneys scrambled to cobble together a bill that provides the details of the broad outlines sketched last week by Lamont and the chief executive officer of Webster Bank, the first financial institution to step forward to help. The loans will also be provided by People’s United Bank, along with other banks and credit unions that applies to the state banking department to participate.
The unsecured loans will be far easier than other personal loans to obtain, and the bill states that “the affected employee’s creditworthiness shall not be a factor used for purposes of determining eligibility.’'
Rep. Ezequiel Santiago, a Bridgeport Democrat who co-chairs the banks committee, said during the debate that the reason for the unusual factor of avoiding credit checks is that the shutdown is “a special circumstance.’'
Lawmakers said they believed the bill was unprecedented as they could not recall any similar circumstances where the state had backed loans for workers in similar circumstances.
Rep. Christine Conley, a Groton Democrat, said the bill was important for the families in southeastern Connecticut who are tied to the Coast Guard Academy in New London. Although Pentagon employees are still being paid, the Coast Guard is part of the Department of Homeland Security and has been directly impacted by the shutdown.
“This bill will provide some relief for the Coast Guard families,’' Conley said. “What these families need is more than charity. They need a paycheck.’'
No repayments are required during a 90-day “grace period’’ that starts when the federal agency is back up and running. In addition, no interest will be charged during the grace period and the next 180 days - meaning nine months in total after the shutdown ends. After nine months, the banks can start charging interest under the bill.
Federal employees can make as many as six equal payments on an installment basis, and they will not be charged any fees for paying off the loan early.
Rep. Craig Fishbein, a Wallingford Republican, offered an amendment that removed the state as the guarantor for the loans and said that all loans should be paid back in 60 days, rather than the longer term. Fishbein and other conservative Republicans said the state should not be involved in the deal and that the banks could still move ahead on the loans by themselves. Some were concerned that the state was setting a bad precedent by guaranteeing special benefits for certain workers.
Fishbein’s amendment failed by 88 to 54 with four moderate Republicans joining the Democratic majority.
The bill also allows cities and towns to voluntarily permit the employees to defer their real estate or motor vehicle taxes, along with sewer or water taxes.
But Rep. Tim Ackert, a Coventry Republican who opposed the bill, questioned why the federal employees were being treated differently than all other workers. He noted that private sector employees who lose their jobs can pay as much as 18 percent interest when they fall behind on their payments and fail to pay their local property taxes.
“We don’t carve out, just for a certain body of people,’' Ackert said on the House floor. “We should have a program for anybody who has been laid off - that we can help them get a loan. ... Why is this so narrow-minded? Why can’t this be for the state of Connecticut workers?’'
In the same way, Sen. Rob Sampson of Wolcott opposed the bill by saying that other workers are also hurting and he was not sure “why we’re choosing this population to bail out.’'
During the campaign and after winning the election in November, Lamont said he would bring a sharply different perspective to state government by being the first governor in decades to create a business and spend his entire professional career in the business world. With less than one week on the job, Lamont immediately asked the business community to step up during the partial government shutdown.
“I think Connecticut is a leader here, and I want to be a leader here,’' Lamont told reporters recently. “I want to show how we can work collaboratively with the private sector to make this work, and I’d like to think that other states across the country will use this as a model.’'
Lamont’s fast action – and willingness to work closely with business leaders – drew the attention of state lawmakers, including Republicans. Lamont then worked quickly with the new legislature on an emergency-certified bill to allow the bank loans to be backed by the state.
“Connecticut is taking the lead on a national issue and showing that we can work together,’' said Sen. Alex Bergstein, the new co-chairwoman of the banking committee. “This is what we need to do for them. We don’t want to have them dip into their savings or go bankrupt.’'
Before the debate, the House held a moment of silence for a utility worker who was killed when a tree fell during the recent storm.
While Lt. Gov. Susan Bysiewicz was presiding over the Senate on Tuesday, senators conducted a brief memorial for her father, Stanley, who died on January 13 at the age of 96. Looney described him as “truly one of the great pillars of what we call the greatest generation.’' The elder Bysiewicz became a family farmer as well as a district sales manager who started his own insurance agency. Looney said that he was proud to be a student at UConn law school of Bysiewicz’s mother.
©2019 The Hartford Courant (Hartford, Conn.)