Harding insists more federal stimulus will be needed

By Scott Benjamin

BROOKFIELD – State Rep. Stephen Harding (R-107) says that there is “certainly” a need for more federal stimulus to address the economic repercussions from the pandemic, and to accomplish that a payroll tax suspension for the remainder of the year “deserves discussion.”

“There certainly is more that needs to be done,” the Brookfield legislator said in an interview.

Harding said that, in particular, some “small business owners” in his district – which includes Brookfield, the Stony Hill section of Bethel and part of northern Danbury – have struggled over the last four months.

“You see it with facilities that are limited now in their operating capacity,” he explained.

Republican President Donald Trump signed the $2.2 trillion CARES Act, a bipartisan package, on March 27. Since then additional funds have been provided to the Paycheck Protection Program and the total stimulus has approached $3 trillion.

The Democratic-sponsored HEROES Act stimulus package was approved on a mostly party-line vote in the U.S. House on May 15 but was not considered in the U.S. Senate. That package would have added another $3 trillion in stimulus.

Stephen Moore, a member of Trump’s Economic Recovery Task Force, and Casey Mulligan, a University of Chicago economist who has written a book on Trump’s policies that will be published in September, recently stated in the Wall Street Journal that future stimulus should be focused on suspension of the payroll tax through the rest of the year instead of "supplemental unemployment payments initiated in March, which are scheduled to end July 31."

They wrote that the "payroll tax suspension would reward employees for returning to their jobs and working more hours by providing a 7.5 percent rise in their take-home pay immediately on income up to $137,700 (Income over this amount would be taxed at the usual rate, which is lower."

Harding said that their proposal “deserves discussion.”

At the state level, he said he hopes that commissioners can “find efficiencies” to lower costs, and that that the $2.5 billion state rainy day fund will not be depleted in response to the pandemic.

Will taxes have to be increased?

Every governor since at least Thomas Meskill (R-New Britain), who was elected in 1970, has increased taxes, and none of them faced an unemployment rate of 16 or 17 percent, according to the Labor Department’s mid-June analysis.

Said Harding, “I just don’t think the residents can endure higher taxes.”

University of Connecticut Finance Professor Fred Carstensen, the director of the Connecticut Center for Economic Analysis, recent told Patch.com, "Few legislators appreciate how bad we're doing,” He predicted that as a result of the economic impact from the pandemic the state government will make major cuts to "municipal aid, education and higher education."

Harding praised Gov. Ned Lamont‘s (D-Greenwich) response to the pandemic.

“He’s been very cautious, which is a good thing,” the state representative remarked. “His collaboration with regional governors seems to put us on the right side of the picture.”

Regarding the next phases of Connecticut’s reopening, Harding said, “I understand many employees want to return to work, but we need to be smart and cautious.”

Harding said that he expects that some companies will continue to have employees work from home following the pandemic.

New York Times columnist David Leonhardt recently wrote that “for more white-collar workers, the remote work experiment shows no sign of ending – a trend that could depress the commercial real estate market and business travel long after a vaccine is available.”

Harding said various employers are viewing the value of work from home “in different ways.”

“There is something to be said for discussion and face to face meetings,” he said.

University of California at Berkeley Economics Professor Enrico Moretti wrote in his 2012 book, “The New Geography Of Jobs” (Houghton Mifflin Harcourt, 294 pages), that, “Phone and e-mail are great ways to transmit information and keep a research project going once the key creative ideas are in place, but they are not the best ways to come up with those ideas. New ideas arise in mysterious and unpredictable ways from free and unstructured interactions.”

Regarding the upcoming special sessions of the General Assembly, Harding said he is “confident” that school construction funding will be considered and that the state grant for the new $78.1 million Huckleberry Hill Elementary School (HHES) will be approved and submitted to the state Bond Commission.

The state Department of Administrative Services has recommended a 22.5 percent grant, which would reduce the municipal taxpayer expense to $63.3 million for the new school, which will be built on the same parcel as the current building on Candlewood Lake Road. The new school will educate students from pre-kindergarten through fifth grade.

The project was approved in March 2019 at referendum. The construction would lead to the closing of Center Elementary School. An ad-hoc committee is currently studying options for that building, which is the last wooden school in Connecticut.

Brookfield First Selectman Steve Dunn recently told Brookfield Patch that without the state grant the HHES project would be back to “square one.”