Capitol Update: Holiday Greetings, Vaccine Information, Restaurant Relief, and New Laws/Taxes for 2021

Dear friends and neighbors,

Below you will find an update on the state’s plans to help Connecticut bars and restaurants, information regarding new laws and taxes effective January 1, and the latest on our statewide vaccination efforts.

I would like to wish everyone across New Canaan and Wilton a Merry Christmas and joyous holiday season. To our military personnel, healthcare professionals, first responders, and all essential employees who will be working through the holidays, thank you for everything you do for our towns, state, and country.

Here’s to a healthy, happy, and successful 2021 for all. May the New Year bring an end to this pandemic, and a return to normal!

Warm regards,

Tom

Grants for Restaurants, Small Businesses

The pandemic has made it all the more difficult to operate a bar or restaurant in Connecticut. Economic conditions have now forced over 600 of these businesses to close, and more will follow unless we take quick and meaningful steps to assist them.

Last week, House Republicans announced our plan to help businesses in the service industry. Our proposals included (1) a $50 million grant program with payments of up to $25,000 to qualified businesses; (2) a one-year suspension of liquor permitting and food licensing fees for certain restaurants; (3) a three-month extension on municipal real and personal property tax payments for the second half of 2020; and (4) a public-private partnership low interest loan program for bars and restaurants.

Yesterday, the governor announced a $35 million grant program for small-and-mid-sized businesses with payments ranging from $10,000 to $30,000. Grants would be available to eating establishments, as well as hotels, retail businesses, and entertainment and recreation venues.

Payments would be sent around New Years and the amount would be determined based on a business’s size and the extent to which they were affected by the pandemic. These grants are intended to assist struggling business owners until additional Paycheck Protection Program (PPP) funding becomes available through the new federal stimulus package.

Details on this program are forthcoming, but I will share any new information when it becomes available.

While the governor’s plan is a step in the right direction, we are still asking the legislature to consider our tax relief measures as well as the proposals mentioned above. We need to make fiscal changes that will promote long-term economic recovery for Connecticut bar and restaurant operators, and the people they employ.

Please follow the links below for additional information:

• House Republicans Announce Pandemic Relief Legislation to Help Bars & Restaurants (Press Release): Click Here
• House Republicans Urge Immediate Action to Assist Businesses (Press Release): Click Here

New Laws and Tax Changes for 2021

New legislation effective dates are typically January 1, July 1, and October 1 of each year. Beginning on January 1, 2021, there are a number of tax changes that will affect individuals, families, and businesses in Connecticut. They are as follows:

• Pensions and Annuities – The percent of pension and annuity payments exempt from the income tax is set to increase from 28 percent (for tax year 2020, to be filed in April, 2021) to 42 percent (for tax year 2021, to be filed in April, 2022).
• Teacher Pensions – The percent of teacher pension payments exempt from the income tax will be doubled from 25 percent (for tax year 2020, to be filed in April, 2021) to 50 percent (for tax year 2021, to be filed in April, 2022).
• Payroll Tax – Employers must begin collecting a 0.5 percent payroll tax to contribute to the Family Medical Leave Insurance (FMLI) Trust Fund.
• Capital Base Tax – The Capital Base Tax on Connecticut businesses begins a four-year phase-out until it is eliminated in 2024.

For a list of new laws effective January 1, 2021, please click here.

The phase out of income taxes on pension and annuity income was part of a 2017 Republican initiative to help Connecticut retirees. Now, more than ever, our residents need tax relief, which is why we have called upon Governor Lamont to delay the new 0.5 percent payroll tax that will be collected from all non-union employees across the state. We have also asked him to delay state employee raises, which will cost Connecticut taxpayers an additional $38 million.

We find it unfair that union employees will be given a raise and immunity from the new payroll tax, while private sector employees will have an additional 0.5 percent removed from their paychecks – that is, if they were fortunate enough to keep their jobs during this pandemic.

We continue to stress that this is not the time to implement new taxes, but rather to reduce the tax burden on cash-strapped businesses and employees until the public health crisis is under control and economic conditions return to normal.

We hope the governor and legislative Democrats will realize the poor timing of this new tax and these raises, and will delay their implementation until we can convene as a legislature.

Vaccine Distribution Update

Moderna’s COVID-19 vaccine has cleared the state’s Vaccine Advisory Group’s Science Subcommittee and has been added to the Department of Public Health’s vaccination programs. A total of 63,000 doses are expected this week, and some healthcare workers have already received their vaccination.

This is in addition to the 31,200 doses of the Pfizer BioNTech vaccine, which was approved earlier this month, with another 24,375 doses expected this week.

The first phase of vaccinations is reserved for the state’s frontline workers, including healthcare workers, medical first responders, and staff and residents of long-term care facilities. Connecticut’s senior residents are expected to be included in the next phase of vaccinations.

Click here to read the full press release.

I am grateful for the many individuals who made these vaccines a reality. There is no doubt that countless lives will be saved.

If you have any questions about these updates or any other state issues, please do not hesitate to contact me.

Email: Tom.ODea@housegop.ct.gov