State Senator Dan Debicella (R-21) today wrote a letter to the Connecticut Congressional delegation calling for the federal government to help with the deficit in Connecticut’s Unemployment Trust Fund. According to the letter from Senator Debicella, the fund is going into deficit because of a near-record 100,000 claims per week and declining tax revenue due to the recession.
We need to ensure that the unemployed continue to receive
their benefits without raising taxes on small businesses,”
said Senator Debicella. “We can easily redirect
the pork barrel spending in the current stimulus package
to truly help today’s unemployed and small businesses.”
The Connecticut Unemployment Trust Fund collects taxes from businesses to pay for unemployment expenses. The State of Connecticut recently had to borrow $10.5 million from the federal government to maintain unemployment benefits. “The alternatives of cutting unemployment benefits or raising unemployment taxes on small businesses are equally unacceptable,” said Senator Debicella in his letter to the delegation.
Debicella instead proposed two ideas for the federal and state government to work together to ensure unemployment claims could be paid without raising taxes on small business. “Small businesses are the engine that will create jobs and lead us out of the recession. We cannot raise taxes on them to continue unemployment benefits. We need to work together to find another way,” said Senator Debicella.
The first idea is to redirect inefficient stimulus funds to pay for the unemployment benefits. Senator Debicella cited two examples of areas where stimulus funds could be redirected. “The American Recovery and Reinvestment Act contains a significant amount of pork-barrel projects and funds that will not be spent until 2011 or 2012 (when the recession will hopefully be over),” said Senator Debicella. “I would propose we eliminate the pork barrel spending, such as improvements to Pennsylvania Congressman John Murtha’s airport that flies only three flights a day—all to Washington DC. I would also propose we eliminate funds that will be spent after 2010 and redirect them to helping our needs today.”
The second idea is for the federal government to eliminate the interest payments on any loans given to the states for their unemployment trust funds. “The interest on these loans will only serve to continue the deficits in unemployment trust funds well after the recession ends. I would propose the federal government eliminate the interest on these loans to states. Elimination of the interest would go a long way towards ensuring we can offer unemployment benefits without hurting small business,” wrote Senator Debicella.
Senator Debicella said he believes the federal and state government can work together to implement these ideas. He said, “I believe we can work together to ensure two goals: first, to ensure unemployment claims continue; second, to ensure that small businesses do not face increased taxes in this recession.”
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