EASTON, Conn. -- Connecticut's reputation as one of the nation's least business-friendly states will take another hit Monday when businesses have to pay an unemployment interest surcharge amounting to about $25.50 per worker. And state Republicans aren't happy.
"Yet another tax on businesses will drive business out of Connecticut," said House Minority Leader Lawrence F. Cafero Jr. The Norwalk Republican said additional assessments will be applied in each of the next two years to cover the interest, but there is no clear plan yet on how the principal loans will be repaid,"Undermining the notion by [Democratic] Gov. Dannel P. Malloy that Connecticut is 'Open for Business,' 73,000 companies in the state will be receiving bills totaling $30 million to cover interest costs on the $800 million the state borrowed from the federal government to provideunemployment checks to laid off workers," Cafero said.Cafero blasted both Malloy and the Democratic-controlled state legislature for failing to provide funding to help businesses with the additional surcharge. He suggested some of the $158.9 million state surplus be used to do so. "On top of all the other bills state government has sent to employers across Connecticut, add this one: the interest on money borrowed from the federal government to support unemployed workers,'' Cafero said.Paul S. Timpanelli, president and CEO of the Bridgeport Regional Business Council, which includes members in Norwalk , said his group opposes the new surcharge but doesn't believe the state's surplus should be used to ease the burden. "As a business group, we don't look fondly on anything that increases the cost of doing business during these difficult times," said Timpanelli. "But we also don't think the timing is good to be suggesting alternate ways of using the state surplus."Timpanelli added, however, that "the burden on business in Connecticut is unacceptable, and this surcharge only adds to the cost of doing business in the state."Cafero said the state's unemployment fund officially went broke in 2009 at the height of the recession when more than 110,000 people lost their jobs during the economic crisis and wiped out the unemployment fund that companies pay into.Cafero said he wrote to Democratic leaders last October, one year after the fund went broke, asking them to join a bi-partisan effort to ease the burden on companies, but received no response. This legislative session Republicans introduced a bill to deal with repaying the federal government, but Democrats blocked the initiative, he said."Now, companies that have already paid into the unemployment fund will get stuck with another bill ... and there's more to come,'' Cafero said. "Employers have had it with more taxes every time they turn around. And now another one is due Aug. 1."
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