CT'S CLIMATE CHALLENGE: Connecticut to Be Home to Large Solar Farm VIDEO
Industry Battles Cost, Supply, Labor Issues Amid Construction Boom Gains
Lucy Perry
A spring survey of civil contractors found that nearly three
quarters of respondents have felt the impact of fluctuations in material costs
on their projects in the past six months.
Even more (76 percent) of those contractors expect cost
increases in the next half year, according to the survey by Dodge Data in the
latest issue of Civil Quarterly.
Dodge chalks up the challenges to the pandemic, the
reduction in material backlogs over time and disruptions in material production
and distribution.
Of civil contractors who are concerned about cost increases
in the next six months, the survey asked which materials they are most
concerned about.
"By far, steel is the material most frequently selected
by contractors," Civil Quarterly reported. "Nearly half [45 percent]
are highly concerned about the possibility of cost increases for steel."
The price of steel was already high after the Trump
administration's 25 percent tariff on foreign shipments. Construction rebirth
has sent costs soaring.
The survey found there is also concern about the rising cost
of pavement, concrete and aggregates as well as lumber and piping.
The National Association of Home Builders (NAHB), tracking
lumber prices, noted a jump from $500 per thousand board feet in October to
more than $1,100 per in April.
NAHB reported the average price of a new single-family home
to increase by more than $24,000 as a result.
Left in the Dust
According to the Associated General Contractors (AGC), at
the pandemic's one-year mark, member construction firms were fighting continued
project deferrals and cancellations. This in addition to dramatically rising
material costs and supply chain headaches, the association reported in March.
AGC pushed for the feds to eliminate materials tariffs,
address shipping backups and boost funding for new infrastructure.
"The survey results make it clear that the construction
industry faces challenges that threaten to leave many firms and workers
behind," said Ken Simonson, chief economist of AGC. "Even as some
parts of the economy are recovering or even thriving, the pandemic has left the
supply chain for key construction components in tatters and undermined demand
for a host of private-sector projects."
He noted that 93 percent of an association survey's
respondents report the pandemic has driven up their costs.
Four out of five are spending more on personal protective
equipment, sanitizers and other health-related expenses.
More than half say that projects are taking longer than
previously.
"Costs and delayed deliveries of materials, parts and
supplies are vexing many contractors," said Simonson.
Nearly 85 percent said costs have increased over the past
year, and about three-fourths were experiencing project delays and disruptions.
They blame shortages of materials, equipment or parts, and
nine out of 10 cite backlogs and shutdowns at domestic producers and
fabricators.
The prevalence of those shortages varies by project type.
Approximately six out of 10 building contractors reported
shortages of materials, equipment or parts.
Five out of 10 firms doing utility infrastructure or federal
and heavy construction and four out of 10 highway contractors saw shortages.
In contrast, approximately one out of three firms reported
any cost savings as a result of the pandemic.
Most of those cited reduced travel costs, while only 5
percent cited new or expanded use of jobsite techniques or technologies.
Half of the firms also blame backlogs or shutdowns at
foreign producers for backlogs and disruptions.
More than three-fourths report projects canceled or
postponed in the past year.
That includes more than one out of five with a 2021 project
that has been canceled or postponed.
Only one-fifth of respondents said they have won new
projects or add-ons to existing projects as a result of the pandemic.
Approximately a third of firms said business matches or
exceeds year-ago levels, while another third said it will take more than six
months to reach that mark.
One-fifth of respondents to AGC's survey said they don't
know.
Contractors in the northeast are the most pessimistic,
followed by firms in the south, reported AGC.
In the midwest, respondents are split along the same lines
as the full survey, while respondents in the west are more optimistic, on
balance.
"Contractors from all regions, project types and firm
sizes are almost equally bullish about their hiring expectations over the next
12 months," reported AGC.
Roughly three out of five expect to add employees over the
coming 12 months.
Only 10 to 15 percent of firms in any category expect to reduce
their headcount.
"Contractors need Washington officials to cut tariffs
and address the shipping and supply chain problems driving costs and
contributing to project delays," said Brian Turmail, AGC's vice president
of public affairs. "They also expect the President will keep his word and
get significant new infrastructure investments enacted as quickly as
possible."
Price Check
The AGC is closely tracking material prices and supply chain
disruptions to analyze potential threats to construction firms.
The association reported that a major producer notified
customers of a further $50/ton jump in structural steel prices in mid-April.
The producer also posted a $100/ton hike for HHS, pipe,
mechanical and piling products the next day, according to the April AGC Data
Digest.
That same day, a supplier of fiberglass equipment stated
that crippling shortages of raw materials were forcing major suppliers to
declare "force majeure."
"An unprecedented leap in the price of goods and
supply-chain disruptions are wreaking hardships on contractors and slowing
projects," noted the association.
The AGC lobbied the Biden administration to end tariffs and
quotas on imported construction materials to ease the domestic supply chain.
"Today's report documents just some of challenges
contractors are experiencing," said Simonson.
Challenges with fast-rising materials costs, lengthening or
uncertain delivery times and rationing of key inputs are the issues he cited.
"These problems threaten to drive up the cost and completion time for many
vital projects and potentially set back the recovery in construction
employment."
Simonson noted prices for construction materials and
services and contractors' bids dropped at the pandemic's start but diverged in
the past year.
A government measure of the selling price for construction
goods jumped 3.5 percent from February to March and 12.9 percent since March
2020.
Simonson reported "both the monthly and yearly
increases were the highest recorded in the 35-year history of the series."
CEG
Lawmakers lobby to bring home big bucks as Congress wrangles over $2 trillion infrastructure plan
Tony Romm
Rep. Donald Payne Jr. has asked the Biden administration to
front the cash for a local railway project so many times that one of the
president’s top advisers no longer greets him with just a hello.
“I know, Gateway, I know,” Transportation Secretary Pete
Buttigieg tells the congressman as soon as they start talking — or so Payne
(D-N.J.) joked with reporters recently, stressing that he thinks he has secured
the White House’s support for the initiative.
At a time when President Biden is seeking a massive
expansion in the role of government — and major boosts in spending to boot —
congressional Democrats and Republicans alike have unleashed a torrent of
lobbying to try to steer new federal money to their states and districts. They
may not agree on the size and scope of some of Biden’s most ambitious
proposals, but lawmakers from both parties still share a fervent desire to
seize on a rare political opportunity and bring some of the big bucks back
home.
The jockeying began earlier this month, after Biden announced a roughly $2 trillion blueprint to upgrade the
nation’s roads, bridges, waterways and ports. Days later, he followed his
infrastructure plan with a $1.5 trillion budget for fiscal 2022 that included
the biggest increases in domestic spending in more than a decade.
Together, the proposed investments reflect the president’s broader economic agenda, as he labors to fulfill his 2020
campaign promises, create new jobs and help the country “build back better.”
But they also offer a unique window for members of Congress to secure the sort
of aid that might help bolster their communities — and shore up their
reelection prospects in the process.
On
infrastructure, lofty ideas are colliding with congressional reality
Sen. Amy Klobuchar (D) recently has written to the Biden
administration in pursuit of federal funding for Minnesota’s bridges. (She even
included a map.) Rep. Marcy Kaptur (D) has urged lawmakers to support federal
research funding of the hyperloop, an experimental underground tunnel
technology backed by Elon Musk, hoping it might someday serve Toledo and the
rest of her Ohio district. And Rep. Pramila Jayapal (D-Wash.) has asked
Congress to approve “generous funding for bridges” under an expanded federal
grant program, which she said could help repair a cracked crossing in West
Seattle.
Even Republicans who have been disinclined to support Biden’s economic agenda have pushed their
pet projects at a moment when Democrats are vying to spend big. Rep. Harold
Rogers has urged the committee to help improve service at an airport in
southeast Kentucky, and Rep. Larry Bucshon has asked lawmakers to complete a
section of Interstate 69 that passes through his home state of Indiana. Both
have sought to score the political wins as part of transportation policy
legislation moving through the House.
The scramble for federal cash may prove to be a blessing and
a curse for Biden and his congressional allies. Setting aside earmarks and
other sums for specific communities could help the White House round up more
votes on infrastructure reform, perhaps even among Republicans who have
questioned such spending in the past.
But federal funding isn’t unlimited, and lawmakers risk
overestimating the public’s tolerance for this sort of wheeling and dealing.
With no guarantees that Congress will adopt major infrastructure and budget
legislation, Democrats and Republicans must strike a precarious balance if they
hope to secure any aid at all.
“There has been a pent-up desire for infrastructure,” said
Rep. John B. Larson (D-Conn.). “I do think, regardless of what your political
stripe is, people will hold you accountable for delivering on what you said you
would [do].”
For members of Congress, the jockeying reflects the high
stakes they face politically and economically after years of false starts,
particularly over infrastructure reform. Lawmakers from both parties generally
have agreed about the need to improve roads and bridges, repair power plants
and replace old pipes in their political backyards — yet they historically have
had little to show for their support.
The same schisms loom over Biden in the weeks after he
announced his roughly $2 trillion infrastructure package, which has proposed
coupling investments in the country’s aging inner workings with new funding to
tackle emerging challenges such as climate change. Republicans have opposed the president’s plan for its size and scope — and
the means by which he proposes to pay for it through corporate tax increases —
putting the future of the blueprint in political doubt.
Biden has asked GOP lawmakers to offer a counterproposal by
mid-May, although Sen. Shelley Moore Capito (R-W.Va.) signaled that party
leaders could share their early outline as soon as this week. Meanwhile,
congressional Democrats have forged ahead with their own work to translate the
president’s ideas into legislation, as lawmakers led by Rep. Peter A. DeFazio
(Ore.) continue drafting a bill to reauthorize the country’s transportation
programs.
Buttigieg
casts proposed transportation budget as down payment on infrastructure
Congress must adopt the measure before an October deadline,
positioning DeFazio’s measure as a potential vehicle for broader, economywide
infrastructure reform. House Democrats took a similar approach last year,
ultimately transforming DeFazio’s legislative work into a robust $1.5 trillion
package that cleared the chamber — only to falter later in the Senate.
Still, some lawmakers are scrambling to get their local
spending priorities included in the House’s bill. The frenzy was on display
last week, when more than 70 lawmakers urged DeFazio and the Transportation and
Infrastructure Committee that he chairs to boost federal spending on projects
that could benefit their states and districts.
Testifying by video, Larson asked at the hearing for federal
aid to help out on a roughly $17 billion project to redesign local highways in
Hartford, Conn., telling committee members at one point that it was as though
the Biden administration had the local "I-84/91 Interchange in mind when
they laid out their bold plan for infrastructure, the American Jobs Act,”
earlier this month.
The House’s top appropriator, Rep. Rosa L. DeLauro
(D-Conn.), asked lawmakers on the transportation panel for money to help New
Haven transform a local expressway into an urban boulevard for pedestrian and
bicycle use. And Rep. Tim Ryan (D-Ohio) submitted his request in the hopes of
repairing the Brent Spence Bridge, which connects Covington, Ky., to
Cincinnati, after years of overuse and strain.
Republicans similarly lined up to seek federal support: Rep.
Virginia Foxx (N.C.), for example, asked the committee to confer future
interstate designation on a local thoroughfare to help stimulate business in
Rutherford County. Rep. Robert Wittman, a Virginia Republican, requested
“robust federal investment” in widening channels in the Port of Virginia to
help commercial and military ships pass. Foxx’s office said she isn’t seeking a
money or earmarks, and Wittman’s office similarly said he isn’t seeking an
earmark and doesn’t support such spending.
The wide array of asks corresponds with the sheer vastness
of the country’s economic needs, lawmakers say. But there are also political
benefits: With a personal stake in the underlying transportation legislation,
more House lawmakers may be inclined to vote for its passage. Sen. Thomas R.
Carper (D-Del.), the leader of the chamber’s Environment and Public Works
Committee, has commenced a similar process to collect funding requests for his
panel’s transportation bill this year.
Still, there’s no guarantee that lawmakers who receive extra
funding and favor will reward congressional leaders with affirmative votes. And
nothing stops members from taking credit later for legislation they didn’t
exactly help to pass.
The dynamic was on display earlier this year when a number
of Republicans faced criticism after they appeared to take credit for some of
the spending included as part of the $1.9 trillion American Rescue Plan, a coronavirus stimulus package they voted against
unanimously. In March, for example, Sen. Roger Wicker (Miss.) cheered the
inclusion of $29 billion in restaurant relief in the bill — only to be savaged for it later because he didn’t back the final
package.
Wicker defended his position at the time by pointing to the
fact he had endorsed restaurant aid even before Biden put forward his package.
“One good provision in a $1.9 trillion bill doesn’t mean I have to vote for the
whole thing," he said at the time.
Congress
revives earmarks in hopes of bipartisan deals on infrastructure, budgets
Hoping to improve the prospects for future bipartisan
dealmaking, Democratic leaders this year also have sought to revive earmarks, which allow lawmakers to
direct federal sums toward pet projects generally back in their home states and
districts. The move came in the weeks before Biden sketched out the early
contours of a $1.5 trillion budget for fiscal 2022, including massive increases
to federal health, science and educating spending.
“It’s particularly important now because there are so many
people in communities in dire straits,” DeLauro, the chairman of the House
Appropriations Committee, said this week.
Congress had banned earmarks for a decade, after years of complaints
about the ethics of the practice and the effects on the government’s
ever-growing deficit. But lawmakers have come to embrace this spending once
again, now known as “community project funding,” as a way to induce compromise
in a political environment where Democrats possess only a narrow majority.
House Democrats approved a regimented process for reviewing
and approving earmarks in February, and Republicans in the chamber followed
suit a month later. In a sign of early interest, lawmakers already have flooded
the House’s budget keepers with “hundreds” of fresh inquiries about potential
earmark requests, said Rep. David E. Price (D-N.C.), the chairman of a House
panel that oversees transportation spending.
“I think that reflects the overwhelming local demand for
investment in infrastructure and is even greater proof that America not only
needs robust annual appropriations, but the American Jobs Plan,” he said in a
statement.
Senate Democrats also have expressed openness to earmarks,
yet some of the chamber’s Republicans have been more recalcitrant about
reviving the practice. They opted after a meeting Wednesday to leave in place a
ban against the practice of seeking special set-asides for pet projects. But
GOP rules are not binding, and some party lawmakers said they would seek
earmarks soon anyway.
Some Democrats, however, say the future of earmarks as a
bargaining tool hinges on their counterparts’ next steps.
“We need to do it together,” Sen. Jon Tester (D-Mont.)
insisted Tuesday.
In the meantime, other lawmakers have continued to pound the
pavement in search of infrastructure funding.
Joining Biden at an event in the Oval Office last week,
Payne specifically asked administration officials to help finance some of the
roughly $2.7 trillion Gateway Project. The initiative aims to improve tunnels
and railways between Newark and New York City, in a bid to quicken transit
times and repair damage caused by Hurricane Sandy nearly a decade ago.
Other Democrats in the two states’ delegations similarly
have pleaded with Congress for more aid in the past few weeks, taking their
requests to congressional lawmakers who oversee transportation policy and
spending. But Payne tried to make a more personal case, at one point telling
the president during their meeting that they used to ride the same Amtrak
trains home.
“I just went a little further than he did on the Northeast
Corridor,” Payne later told reporters at a news conference, adding he thought
the Biden administration had “gotten the message from me.”
Buttigieg defends climate elements of American Jobs plan
Kim Slowey
- Transportation Secretary Pete Buttigieg told the U.S. Senate Appropriations Committee at a hearing Tuesday that measures to prevent climate change were integral to the success of the infrastructure projects in President Joe Biden's $2.3 trillion American Jobs Plan.
- In his opening statement to the committee, Buttigieg noted that some critics of the climate elements of the plan said the spending proposal should address only assets like roads and bridges but pushed back against that opinion by comparing it to "drawing up plans for a new restaurant with no consideration for health, safety or cleanliness. The truth is that every infrastructure decision is already, inevitably a climate decision as well."
- Buttigieg also told the committee that the plan is the biggest jobs investment since World War II and that 40% of the plan's climate investments would go to "overburdened and underserved communities, who often bear a disproportionate burden of transportation pollution."
Other points Buttigieg highlighted for the committee about the American Jobs Plan were that:
- More than 20,000 miles of roads and 10,000 bridges would be improved.
- Passenger rail would see an expansion.
- The country would achieve net zero carbon emissions by 2050.
- There would be an "electric vehicle revolution" supported by a network of 500,000 electric car chargers installed across the country and by rebates on electric vehicle purchases.
- There would be a doubling of investment in public transit.
- Investment in resiliency would "reinforce, upgrade or realign existing transportation infrastructure to better withstand extreme weather events and other effects of climate change."
Several other senior administration officials spoke at the hearing, including Commerce Secretary Gina Raimondo, Secretary of Housing and Urban Development Marcia Fudge and Michael Regan, administrator of the Environmental Protection Agency.
The Biden administration has faced opposition from congressional Republicans on how it plans to pay for the bill. The president has suggested raising the corporate tax rate from 21% to 28%.
In addition, the plan includes the controversial PRO Act, which won the approval of the Democratic Congress but still does not have enough votes yet to win the Senate. Proponents of the PRO Act did score a recent victory with West Virginia Democrat Sen. Joe Manchin's co-sponsorship of the legislation. Manchin previously had hedged on offering his support.
The PRO Act would expand unionization rights and amend the National Labor Relations Act to tighten up the definition of an independent contractor by using a stricter test.
Contractors consider reopening offices, vaccine mandates
Kim Slowey
The COVID-19 pandemic has forced many changes in the way
contractors do business. They have reevaluated and introduced new safety
protocols, reorganized work schedules to accommodate social distancing and sent
many administrative employees home to do their jobs.
“Strangely enough, in construction, we never really thought
much of remote working because the field really couldn't do it, but COVID made
the business case,” said Eric Stenman, president of Balfour Beatty’s U.S.
Buildings division. “So we took advantage of the remote working opportunities
provided by the pandemic.”
But as vaccinations are being rolled out to most Americans
and many offices have been equipped with personal protective equipment and
layouts reimagined to promote safety for employees, construction companies are
deciding how and when they will reintroduce their staffs to a normal work
schedule. Or at least as normal as possible.
Clayco, a design and construction firm headquartered in
Chicago, has notified all salaried employees that they will be required to
report to the office on May 10 and must be vaccinated, according to Bob Clark,
company founder and executive chairman. About 50% of Clayco’s office employees
never left the office environment during the pandemic, he said, with 25% rotating
in and out and the remaining 25% choosing to work remotely.
Out of its approximately 1,400 salaried employees, Clark
said, very few have yet to ask for an exemption from the vaccination
requirement. Clayco will grant exemptions for medical reasons or based on
religious beliefs. The company has 400 salaried employees in the Chicago
office, 600 in St. Louis and the rest at projects around the country.
There are several reasons Clayco decided to take the
position it has. The company was able to complete all its work during the
pandemic, Clark said, but Clayco’s leadership felt that the company was not
operating as efficiently as it could with so many working remotely.
In addition, Clayco has hired 140 people since January, and
it will be harder for them to assimilate working from home, he said.
“It's just very difficult to train people and to get them to
understand the culture of the business when half the people may be working
remotely,” Clark said.
Clayco is also considering the businesses that surround their
offices. In addition to its Chicago headquarters, the company has two offices
in the St. Louis area and one in Greenville, South Carolina. Clark said there
are local businesses, like restaurants, that are suffering because there have
been fewer office workers to support them.
Getting vaccinated and resuming full office operations also
sends a message to clients that they too can work safely in their offices
again, he said. Clark also anticipates that some customers will require anyone
working on their premises to be vaccinated.
The mandatory vaccine policy does not apply to hourly
workers or field personnel, but Clark is launching a 46-city tour of Clayco
projects to encourage everyone else to get vaccinated as well.
Clark said employees at the headquarters in Chicago need a
badge to enter the building and will not be allowed in unless they are
vaccinated. The company will consider anyone refusing a vaccine without a
legitimate exemption to have resigned.
At Clayco, Clark said the company is carefully following
EEOC rules to help guide its return-to-work policies. The EEOC has set
forth Centers for Disease Control and Prevention guidelines as solutions for a wide
range of COVID-19-related employer issues like what to do if an
employee is suspected of having the illness, ways to reduce the spread and
recommended testing for antibodies.
It is the general consensus that employers
can require their workers to be vaccinated as long as they don’t violate
federal laws. These include the Americans with Disabilities Act; the
Rehabilitation Act and Title VII of the Civil Rights Act. Employers must also
comply with any relevant state and local regulations.
Back to the office?
Other contractors are taking a different approach. Turner
Construction, for example, has focused on providing employees with information
about the available vaccines but is leaving the decision to get one up to each
employee.
“What we’re looking to do is educate people so they can make
a personal choice,” said Tom Reilly, executive vice president at Turner.
There is no back-to-work mandate across Turner because, he
said, the company must decide what is appropriate for each of its 40-plus
offices around the U.S.
“We’re encouraging everybody to come back to the workplace,
and there may be some flexibility [about] how many days,” Reilly said.
“We're being guided by actively caring for our employees,
ensuring we're meeting the commitments of our clients, understanding the needs
of our employees and balancing that with equity across the company so that we
find the right balance,” he said.
More than two-thirds (68%) of U.S. workers would prefer a
hybrid workplace model after the pandemic ends, according to Prudential’s Pulse
of the American Worker survey, conducted by Morning Consult in March. Of
those surveyed who have been working remotely, 87% want to continue to work
remotely at least one day per week post-pandemic.
Employees indicated a flexible work situation is becoming a
must-have, HR
Dive reported. Close to half of remote employees (42%) said they would
seek a different job if their employer refuses to offer remote work options
long term. Among the benefits of working remotely, employees listed saving
money, cutting out their commutes, spending more time with their families,
getting more sleep, improving their health and reducing their overall stress.
The desire for a hybrid workspace does not mean employees
want to work remotely all the time, however. Forty-one percent of respondents
said they would not want to work for a company that is entirely remote. Workers
listed “feeling disconnected” and pressure to constantly remain online as
challenges of the remote work model. More than half (54%) reported taking less
time off and 35% said they were working more hours.
Return to normalcy
Balfour Beatty is also leaving whether or not to get
vaccinated up to each employee, but, according to Stenman, company
executives are leading by example.
“I’ve been fully vaccinated,” he said.
Looking ahead, Stenman said, Balfour Beatty is fine tuning
what will be future flexible work guidelines with the goal of having
administrative staff in the office about 60% of the time. The issue, he said,
has also come up in the hiring process, with new recruits interested in being
able to have remote working as an option.
Black & Veatch is trialing wearables as a
means for reducing the amount of people who need to go physically to a
location.
"One person can go out to the site, look at something
through a wearable and others working remotely can see those same, in-real-time
activities happening," said Irvin Bishop Jr., Black & Veatch CIO told
CIO Dive. "People with different expertise on the team can suggest,
you know what should be done and not have to physically be there all the
time."
With sensor and IoT devices placed throughout the
facilities, the company is hoping to reduce the need for physical presence on
site and help the site directly provide information that can guide decisions.
Nevertheless, field work, by its nature, does not allow
for the same flexibility as office work, Stenman said.
“These are the realities of our industry,” he said. “We
understand that if you’re a junior project engineer and you’re really hoping to
become a project executive someday, you’re not going to learn that at home. “
This does not mean that there will be no opportunities for a
flexible schedule for those workers, however.
“We're still studying rotations for superintendents,”
Stenman said. “We're including that in our flexible plan. But the criteria and
I think the discussion is different in the field than it is in the office.”
Legislature presents its own budget plan, and the stage is set for debate
Keith M. Phaneuf
The legislature’s Appropriations Committee approved a $46 billion, two-year state budget Wednesday evening
that, at first glance, largely matches the spending level endorsed by Gov. Ned Lamont in
February.
But the package, which makes major new investments in higher
education, social services and municipal aid, also taps about $240 million from
this year’s projected surplus and moves another $350 million in sales tax
receipts to an off-budget account.
The dueling plans now become the foundation for negotiations
between the legislative leaders and Lamont as they try to adopt a new, biennial
budget before the regular General Assembly session adjourns on June 9.
“Our budget responds to the defining moment in history,”
Rep. Toni E. Walker, D-New Haven, House chairwoman of the legislature’s
budget-writing panel said during a live-streamed press conference prior to the
meeting. “The COVID-19 pandemic demonstrated the vital importance of government
investment in our society and our safety net, our health care system, and most
importantly, the residents who live in our state.”
“This budget reflects our values and maintains vital
services and programs,” added Sen. Cathy Osten, D-Sprague, the committee’s
other co-chair, who added it makes key investments in health care, education,
justice-related initiatives and workforce development programs while remaining
under the statutory spending cap.
Like Lamont’s plan, the proposed budget would boost
expenditures by slightly less than 2% next fiscal year — above the spending
lawmakers authorized for the current fiscal year.
But because the administration expects to save much more
this fiscal year than lawmakers authorized, the actual spending growth in both
plans tops 4%.
That savings has been a point of contention between the
administration and the Appropriations Committee’s Democratic majority since the
pandemic began in March 2020.
Lamont’s budget office spent $334 million less than was
budgeted across all state agencies last fiscal year and projects to save $644
million this fiscal year. Much of that was helped by emergency federal pandemic
relief, which covered a large part of state social service costs.
But Walker and Osten have said Lamont’s budget office has
provided insufficient details on the savings, and the co-chairwomen worry state
spending was peeled back too much amid a crisis, and what was spent may not be
enough to meet Connecticut’s needs going forward.
Lamont, a fiscally moderate Democrat, and Republicans on the
Appropriations Committee have warned against increasing spending too much
before the state’s economy has fully recovered. Progressive Democrats counter
that needs never have been greater than during the coronavirus pandemic and
that the state can afford to help. Connecticut has $3 billion in its rainy day
fund, projects to end this fiscal year with another $800 million left over, and
received $2.6 billion in direct aid through the latest federal pandemic relief
bill.
Lamont cast himself as occupying a reasonable middle ground
on the budget, a Democrat not interesting in raising taxes, yet one who
defeated a Republican intent on eliminating the income tax.
“There are two wings in the bird,” Lamont said during a
mid-day press conference in Rocky Hill. “I got a group that wants to increase
spending a lot and break the spending cap, and I ran against a guy who wanted
to eliminate all progressive taxes. I’m trying to find the middle here so that
we get this budget done on time and take care of people.”
Lamont was referring to his 2018 Republican gubernatorial
opponent, Madison businessman Bob Stefanowski, who made the mathematically
dubious claim that he would eliminate the state income tax over a decade,
removing the source of nearly half of all revenue for the General Fund.
The governor declined to offer a detailed rebuttal or
reaction to the committee budget.
“It’s pretty early,” he said, adding the his budget
director, Melissa McCaw, had just given him an initial briefing. “Hopefully,
it’s the second inning of a baseball game, but we’re still going to get it done
on time. You know, people know my feelings — we don’t need to raise taxes.
We’re going to put the federal money to work and take care of the services we
need to. We surely don’t have to break the spending cap. I think that’s a
promise that was made before I got here. But not that long ago, 2017.”
Lamont seemed especially wary about spending one-time
surplus from the current fiscal year on recurring expenses.
“In 2017, they passed a budget that had billion-dollar
deficits as far as you can see and resulted in a ratings downgrade and
everybody’s leaving the state. We started to turn that around. Let’s keep
turning it around.”
“Connecticut is growing more unaffordable by the day and
families are struggling,” Senate Minority Leader Kevin Kelly, R-Stratford said.
“Now more than ever we need to make sure state government is funding core
needs, but also not overspending and adding new burdens onto Connecticut
residents when they can least afford it.”
Investing in municipalities and higher education
Walker and Osten also said state officials have ignored
longstanding problems for too long, such as racial inequities in health care
and education, as well as property tax relief for municipalities and funding
for the nonprofit agencies that deliver the bulk of state-sponsored social
services. The pandemic, they said, only exacerbated these issues.
Cities and towns would receive more than $400 million in
additional aid over the next two fiscal years combined.
The package reverses Lamont’s proposal to suspend slightly
more than $90 million in Education Cost Sharing grant increases to local school
districts over the biennium, and it would dedicate an extra $14 million to
districts with large numbers of students from poor households or for whom
English is their second language.
The plan also would dedicate a portion of sales tax receipts
to keep the legislature’s pledge to increase non-education aid. Lawmakers could
not fit this money into the plan without exceeding the spending cap, though, so
the committee proposed effectively moving it off budget.
The process involves a revenue “intercept” — an
accounting tool that targets dollars before they arrive in the budget and
assigns them for specific purposes. Because the cap only applies to budgetary
appropriations, these dollars then can be used without violating the cap.
The committee plan also focuses heavily on public colleges
and universities, which took a huge hit during the pandemic as campuses closed
early in the spring of 2020 and millions of dollars in student fees had to be
funded.
The state university and community college system was facing
a $90 million hole earlier this fiscal year, while the University of
Connecticut’s deficit topped $100 million.
Federal relief covered about 80% of those gaps, but higher
education systems had to close the rest with pay cuts, layoffs, job freezes and
other cost-cutting measures. And both systems project significant built-in
deficits for the next two-year budget cycle.
And Walker said higher education was struggling long before
the pandemic. Surging state retirement benefit costs — tied to pension debt
accumulated over more than seven decades — has eaten away at state support for
higher education operating costs.
The committee’s proposed budget sends a total of $75 million
extra across the next two fiscal years combined to assist the community
colleges, regional state universities and the University of Connecticut to
offset this problem.
Social services, health care also top list of budget
priorities
Many progressive Democrats also charged Lamont’s budget did
too little to address growing healthcare and social service needs, and the
committee plan expands funding in several areas.
The package would add $46 million for nursing homes over the
next two fiscal years combined.
Industry officials say facilities have lost millions of
dollars since the pandemic began due to increased costs and lost revenue. A
significant portion of nursing homes’ revenue comes from residents assigned
there for a few weeks or months to rehabilitate after surgery. But many
patients deferred non-emergency procedures during the pandemic.
SEIU District 1199 New England, the state’s largest
healthcare workers’ union, representing about 5,000 nursing home caregivers in
the state, warned last week of a potential strike later this spring involving
51 facilities where its members are working under contracts that expired March
15.
The committee budget would make a huge, multi-year
investment in the private, nonprofit agencies that deliver the bulk of
state-sponsored social services. The investment actually would begin this
fiscal year with an extra $50 million for these agencies, many of which have
received no major increase in state support for more than a decade.
The CT Community Nonprofit Alliance estimates the
nonprofits, collectively, lose $461 million this year due to inflation and
stagnant state funding for more than a decade.
Osten said that $50 million is just the first step of a
seven-year plan to close more than half of that $461 million gap and assist
“the backbone of all social services.” The committee also is proposing funding
increases of $30 million in both 2021-22 and 2022-23.
Gian-Carl Casa, president and CEO of the alliance, called
the proposal a “remarkable and historic investment,” adding that nonprofits
“have struggled for more than a generation for proper funding to provide vital
services every day to thousands of people across the state.”
Similarly, municipal and regional health districts were “the
little engine that kept us going” through the pandemic, Walker said, and the
committee proposal adds $5.4 million across the biennium for this group.
Another $34 million would be added to the budget over the
biennium under the committee plan to expand income eligibility for HUSKY A, the
state’s Medicaid-funded health insurance program for children and parents from
low-income households as well as for pregnant women. The limit would rise from
160% to 175% of the federal poverty level.
GOP: Committee budget relies too much on one-time revenue
The Democrat-controlled committee voted shortly after 7 p.m.
to approve the bill. The tally was 32-16 along party lines.
Republicans on the Appropriations Committee said were united
in opposing the package, but said it nonetheless contained some good
components.
Sen. Craig Miner of Litchfield, ranking GOP senator on the
panel, endorsed an increase in the personal needs allowance for nursing home
residents.
Nursing home residents receiving care funded by Medicaid
must forfeit most of any income they earn to the state, but are allowed to keep
$60 per month for clothing or other personal items. The proposed budget would
boost that limit to $75.
And Rep. Kathleen McCarty, R-Waterford, backed the decision
to continue increasing Education Cost Sharing grants for local school
districts.
But they and other Republicans said the overall package was
unsupportable because it is too volatile.
By supporting ongoing programs with one-time reserves, and
effectively maneuvering around the state spending cap, the committee budget
retreats from a number of financial reforms that both parties enacted in 2017,
Miner said.
When the reserves and federal coronavirus pandemic relief
run out, future state taxpayers will be on the hook, he said.
“We are only setting up the next generation … for a very
heavy lift,” Miner said.
Other components of the committee budget include:
A new Office of Pandemic and Public Health Preparedness;
Five new positions for the state Contracting Standards
Board, which has been forced to operate with minimal staffing for more than a
decade;
And $2.3 million to bolster the consumer contact center for
unemployment claims to accelerate processing of benefits and job counseling at
the Department of Labor.
State Capitol Bureau Chief Mark Pazniokas contributed to
this story.
Cromwell retirement community wraps $48M expansion
Matt Pilon
A senior living community in Cromwell says it has completed construction of 54 new residential apartments.
Covenant Living of Cromwell (formerly Covenant Village of Cromwell) broke ground on the approximately $48 million project at 52 Missionary Road approximately two years ago.
The project includes one and two-bedroom apartments and a new “town center” area with three dining venues, an art studio, wellness center and other shared amenities.
The community is one of 17 across the country operated by Illinois-based not-for-profit Covenant Living Communities and Services, which is a ministry of the Evangelical Covenant Church.
Covenant said in late March that 65% of the new units had been sold as of that time.
The project was financed by tax-exempt bonds issued by the quasi-public Connecticut Health and Educational Facilities Authority.
Covenant’s development team included Middletown-based firms C.E. Floyd Co. and Dowley and Associates, Cheshire-based Milone & Macbroom, and others.