Lawmakers Pass Bill Allowing for No-Interest Loans for Gov't Employees Working Without Pay

State lawmakers on Tuesday passed legislation that will allow the state to back no-interest loans for federal workers working without pay during the ongoing shutdown.

The loans will be provided by banks or credit unions working with the state.

The initial loans would afford impacted employees up to one month’s net pay, capped at $5,000. They are low-risk for the state from a financial point of view because of the matchup.

“What we see are families that can’t pay their mortgages, families that can’t keep their kids in daycare. We see families that are having trouble putting food on the table, some of whom are running out of their savings, so whatever we can do to help our friends and neighbors across the state of Connecticut, we should be doing," said Sen. Bob Duff (D-Norwalk).

In the event that the shutdown continues, participating banks and the state will work with impacted employees to provide additional funds.

The bill also allows towns and cities to delay local tax collection on property, car and utility bills for those federal workers until they get their paychecks. 

The legislation was an effort to help workers during the longest government shutdown in the nation's history. The only opposition came from some Republican fiscal conservatives who complained that the state should not be in the business of backing loans for anyone, or that the program singles out of the wrong group of people.

However, Republican leaders sponsored the bill. Rep. Themis Klarides, (R – Derby), the minority leader in the House, said she thought the short-term assistance is a way that Connecticut can step up as the federal government remains in gridlock.

“We can’t control what goes on in Washington, but we can control what goes in Connecticut and to the residents of the state of Connecticut who are being affected because Washington is dysfunctional," she said.

Gov. Ned Lamont signed the bill, his first as governor, and thanked lawmakers on both sides of the aisle for their work on the program.

“It’s the first bill I’ve had a chance to sign. And it was the first vote for a number of people in the legislature and I think we did a really good thing today," Lamont said.

The Connecticut Bankers Association also backed the program, and Lamont praised the banking community during the bill signing.

He said, “I do want to give a shoutout to the banks. I mean, they turned this thing around in about six or seven hours. That makes a difference.”

Approximately 1,500 federal employees in Connecticut are impacted by the partial government shutdown.

The state Department of Labor has already been offering some of them employment benefits, but only furloughed employees who are not allowed to work can file for unemployment, which means those working without pay were considered ineligible for benefits.

Tuesday marked day 32 of the shutdown. Before this, the longest government shutdown was during the Clinton administration. It lasted 21 days, from Dec. 16, 1995, until Jan. 5, 1996, according to NBC News. 

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