Millions of dollars from a federal program designed to preserve jobs during the COVID-19 pandemic have gone to Connecticut employers that laid off or furloughed workers, NBC Connecticut Investigates has learned.
NBC Connecticut Investigates found at least a dozen Connecticut employers who took PPP funds totaling in the millions of dollars and laid off or furloughed people.
We compared PPP loan data with layoff notices employers must give to the federal government. Some employers made workforce reductions shortly before getting the PPP money and some did it after getting the loan.
Among some of the more notable employers taking PPP money, Chowder Pot of Hartford, Mystic Seaport Museum, The Bushnell Theater, Victorinox, the maker of Swiss army knives and, the YMCA of Greater Hartford laid off or furloughed people a few days to a month before getting the loan. Ticket Network got the PPP loan and then announced layoffs.
The YMCA of Greater Hartford was the only employer to respond to NBC Connecticut Investigates’ request for comment. After furloughing most part-time staff in March, it received PPP funding, which helped bring some workers back, plus day camp hires. The YMCA added, “…we anticipate utilizing PPP funds this fall as we bring back more of our childcare staff.”
The moves by the YMCA of Greater Hartford are an example of how the $661 billion PPP program created by Congress is working, according to Stan Veuger, an economist with the American Enterprise Institute.
“You could’ve come up with a program that was more targeted, but I think that would’ve taken more time, it would’ve been harder to get the funds to businesses and to their employees,” he said.
However, small, female-owned, and minority-owned businesses, like Gisele Tyler’s Lashbrow Center Wilton, failed to get a loan in the first round of PPP funding and got a small amount in round two that she says helped just a little.
“We were one of the first non-essential businesses to be shut down. So, as far as I’m concerned, a lot of us were first in,” Tyler said.
It’s one reason why Ashley Harrington, with the Center for Responsible Lending is critical of the PPP program -- in Connecticut and the U.S.
“It prioritized the entities that you and I wouldn’t think of when we’re thinking about small businesses and when we’re thinking about Main Street,” she said.
Veuger said PPP program is as much about getting money into the economy as it is about helping small businesses. He added though
, the funding comes in the form of a forgivable loan, which may not be forgiven if companies don’t retain a certain amount of their workforces.
“The loan is just not forgiven, so at that point you’ve taken on a loan you have to pay back,”, Veuger explained.
Harrington told NBC Connecticut Investigates Americans need to be watching not just who got the funds within the aid but who was actually able to access that forgiveness and convert these into grants.
Tower Laboratories, in Essex, is one of the world’s maker of effervescent products, including denture cleansers, antacid and pain relief as well as cold relief.
Principal owner and state senator Norm Needleman said a $2.7 million forgivable loan from the Paycheck Protection Program, or PPP helped him keep all his 250 employees on the payroll, in spite of the pandemic.
“We were concerned people were going to stop showing up for work, so we added money to everyone’s pay, we added $2 an hour for now, four months, to everyone’s compensation. We added 5 percent to all the salaried people,”
, Needleman said.
Needleman said he does not believe being a state senator helped his business get a PPP loan, though his long-term relationship with his banker did. “No matter what the political consequences were, I chose to take that loan because I wanted to keep people whole,” he said