Despite the pandemic, Gov. Ned Lamont remains committed to “a more affordable Connecticut,” he said during his annual budget address today.
To balance his $46 billion biennial budget, Lamont is relying on further federal stimulus and to some extent Connecticut”™s $3.5 billion rainy day fund.
“Our budget is much more than a list of expenditures and revenues,” the governor said. “Rather, it is a reflection of our shared values, as we are collectively deciding not only what we are funding but why we are funding it. It is a document that defines who we are as a state and a society.”
“We don”™t have the luxury of doing one thing at a time,” Lamont declared. “There”™s too much at stake.”
Projected deficits stand at less than $1 billion annually, he said, which will be balanced by either a gradually growing economy; state and local aid from the federal government; or a partial drawdown from our $3.5 billion rainy day fund.
“These realities, however, must not come at the cost of our core Connecticut values,” he said. As a result, his budget is anchored in five priorities:
- Defeating Covid-19. “because if we don”™t, nothing else matters.”
- “An intense focus on making Connecticut more affordable for our middle class through investments in education, early childhood care, support for our small businesses, workforce development, and more affordable health care.”
- Investing in the future “with a 21st century upgrade to our transportation, energy, and broadband infrastructures.”
- Modernizing state government through “creating an improved customer experience and faster service at less cost to our taxpayers.”
- Maintaining economic growth and “an economy that works for all.”
“My budget achieves this without broad-based tax increases, reducing municipal aid, or cutting any existing services,” Lamont said. “These are commitments I will not break.”
To that end, he is introducing an array of bills, including “An Act Concerning Responsibly and Equitably Regulating Adult-Use Cannabis.”
“Our neighboring states are offering recreational marijuana on a legal and regulated basis,” he noted. “Massachusetts dispensaries are advertising extensively here in Connecticut. And, rather than surrender this market to out-of-staters, or worse, to the unregulated underground market, our budget provides for the legalization of recreational marijuana.”
Those revenues will “go to distressed communities, which have been hardest hit by the war on drugs,” he continued. “Half the tax revenues should be allocated to PILOT payments, in addition to a 3% local excise tax option. And importantly, my proposed legislation authorizes the automated erasure of criminal records for those with marijuana-related drug possession convictions, and charges.”
Earlier this morning, at the Norwalk Chamber of Commerce”™s virtual “Legislative Update” meeting, State Rep. Chris Perone (D-137th) said he was unsure of what revenues would really be realized through legalization, saying that while initial six-month revenues in some states had exceeded expectations, they had not done so in California.
“It”™s a revenue stream that we don”™t quite understand,” he said, warning that Lamont”™s budget is partly predicated upon “something we haven”™t even approved yet.”
Connecticut could reap up to $952 million in state tax revenue from recreational marijuana sales over five years, according to a UConn economist.
State Rep. Terrie Wood (R-141st), the lone Republican on the panel, said that her caucus has had no conversations on the topic so far, but “I”™m sure we will. There will be ”˜yes”™ votes and there will be ”˜no”™ votes” by party members, who in general have been less open to the legalization question than have their Democratic colleagues, she said.
As for tracking revenue from legalization, Wood expressed confidence that newly-appointed Department of Revenue Services Commissioner, and former Danbury Mayor, Mark Boughton was up to the task. “It”™s just a matter of software,” she said.
Likewise, Lamont is looking to strike a deal with the tribal operators of the Foxwoods and Mohegan Sun casinos that would pave the way to legalizing sports betting and online gambling.
“Our neighboring states are moving forward with sports betting and i-gaming, and Connecticut should not leave these opportunities for other states to benefit from our inaction,” he said said. “My administration has been in active negotiations with our tribal partners to bring the state”™s gaming economy into the digital age. And I am submitting legislation which reflects what I believe to be the best bet in ending this stalemate of inaction in a way which is in the best interest for the entire state.”
The tribes have expressed interest in sports betting and i-gaming, but have objected to the idea of sharing the operation of those endeavors with other parties.
Turning to transportation, Lamont said that, “If the thinking had been, ”˜If it ain”™t broke, don”™t fix it,”™ then that thinking needs to change. The Special Transportation Fund is broken and it needs to be fixed.”
He noted that the federal government “is ready to provide significant funding to streamline transportation systems, but only if our state can pay its share,” and that the current state of the STF “keeps us from accessing these federal funds and risks our ability to fund infrastructure projects we desperately need to revitalize our economy.”
As expected, Lamont”™s address did not include mention of highway tolls, the subject of a bruising political battle last year. However, he is proposing a tractor-trailer mileage-based fee, similar to what is in place in New York and Oregon.
The mileage fee would raise $90 million annually and apply only to larger heavyweight trucks, “which can cause the vast majority of the damage to our highways,” the governor said. “And this funding allows Connecticut to leverage for $1 billion worth of projects over the next five years.”
Connecticut can also join the multi-state Transportation Climate Initiative, along with neighboring states Rhode Island and Massachusetts, “which will reduce carbon emissions while raising over $80 million for climate change and public transit investment throughout our state,” Lamont said.
As Covid-19 “continues to throw wild cards into the deck,” the governor said, “the federal government is getting much closer in deciding how it will support our state and local municipalities. Connecticut will have to remain agile in meeting these changing circumstances, but that being said, I would not change our hand with any other state in the country.”
Lamont said that, thanks in large part to the steps the state has taken to mitigate the virus”™ spread and to manage its finances, “Connecticut is one of the best positioned states in the country. Thanks to the good people of this great state who took the public health precautions seriously, we have been able to keep more of our economy open safely with a lower infection rate than almost any other state.”
As of last night, that rate stood at 3.84%.
“The pandemic reminds us that this is no time to limit our ambitions,” he declared. “Rather, the pandemic drew into sharp focus our racial health disparities and educational inequalities, as well as the fragility of our families and small businesses where women, and especially women of color, took the biggest hit during this pandemic.”
The governor promised to “continue to build on our $500 million investment in a robust testing program and continue to ramp up our Covid-19 vaccination program, both of which have been rated as among the best in the country.”
Lamont also said that, as the state”™s most distressed municipalities are also facing diminished tax bases due to tax-exempt properties, “we will help them shoulder some of this burden next year by allocating an additional $100 million to 25 distressed cities and towns, on top of the projected federal support for our local municipalities.
“Our budget also includes an increase in PILOT funding ”“ payment in lieu of taxes ”“ funding in the out years with 50% coming from our cannabis revenues to further support our cities and towns,” he said.
Education
Connecticut”™s teacher recruitment program has emphasized hiring more teachers of color, with that number now nearing 10% statewide; “We still have a long way to go,” he said.
Lamont”™s “Act Implementing the Governor’s Budget Recommendations Concerning Education” will further help first-generation,, low-income, and minority students, he said ”“ efforts that will be further enhanced by his “Act Concerning Equitable Access to Broadband.”
At the Norwalk event this morning, Wood, who is on the Higher Education and Employment Advancement Committee, called for “more accountable education, particularly in urban districts,” where she said virtual learning in general is “not working.” She also decried the Connecticut System of Colleges and Universities”™ consolidation plan as “making no sense at all.”
Noting that the state”™s community colleges had been under the legislature”™s purview before the CSCU was formed in 2011, Wood said, “That was supposed to save $25 million in a couple of years, but it actually cost more money. Now they”™re stripping out resources, particularly counseling, and cutting classes to build a bigger administration.”
Saying the CSCU”™s Board of Regents “tends to dodge questions,” Wood called for the government to again have oversight over the system, which would provide “more accountability, transparency, and honesty.”
Lamont said that, thanks to “our best-of-class state university system, the new federal Higher Ed Relief Fund will provide $140 million for public higher education, which covers higher Covid-related costs and support for Connecticut students who are having a difficult time affording their education during these tough economic times.
“And we will continue to maintain our commitment to the educational cost sharing formula, with additional monies provided by federal resources, so every kid gets the best opportunity at the starting line of life, regardless of zip code,” he added.
The additional education funding “also will allow our towns and cities to hold the line on property tax increases, doing more to keep Connecticut affordable for you,” Lamont said, in his latest apparent rebuke of Senate President Pro Tem Martin Looney (D-New Haven)”™s “mansion tax” proposal.
Health Care
“Health care savings continue to be a big driver in our effort to balance the budget without tax increases and make health care more affordable and accessible across the state,” the governor said. “For our state employees and retirees, our push for more competitive pricing represents $89 million in savings in the current budget and $186 million in savings in the next biennium.
“This budget reduces the rate of growth in health care cost of active and retired state workers, driving down our fixed costs and saving taxpayer dollars,” he added.
Still, “We need to do more to rein in costs,” Lamont said. “So, working in concert with Massachusetts, my affordable care package will limit price increases on pharmaceuticals and our premium support leveraged with significant federal dollars will lower costs for all of our families and small businesses.”
The governor further promised to continue modernizing the state”™s technological systems, and to further expand the state”™s “high-quality workforce development program, (which) will ensure better outcomes for our state”™s residents and help our businesses to hire from and continue to grow here in the state.”
“Our charge is bigger than beating back Covid-19,” Lamont concluded. “My challenge to you today is exactly what it was two years ago, and we are going to do this together. A budget that”™s on time, in time, for our mayors, superintendents, and the 500,000 students who don”™t want to waste their shot and make the most of a fresh start ”“ all joining us in Connecticut”™s comeback.
“Now, let”™s get to work.”
A full list of the governor”™s legislative proposals can be found here.
This afternoon, the state”™s largest business organization endorsed most of Lamont”™s address.
“We”™re glad to see many of the administration”™s priorities aligning with CBIA”™s Rebuilding Connecticut policy recommendations, including expanding workforce development opportunities to get people back to work, investing in our hard-hit urban centers, and supporting struggling small businesses,” CBIA President and CEO Chris DiPentima said.
“We appreciate that the governor”™s budget proposal ignored calls from progressive lawmakers for more than $4 billion in tax hikes on residents and businesses,” he continued.
DiPentima said the organization was analyzing the Governor”™s transportation funding proposals, including the mileage fee on tractor-trailers ”“ something that already has been objected to by the Motor Transport Association of Connecticut.
“Transportation infrastructure investments are absolutely critical to moving our state forward, but a successful plan cannot be developed without bipartisan support,” DiPentima said.
What the state could to do is reduce the number of legislators – make government more stream-lined and cost effective. No paying of health benefits for legislators – no paying of retirement benefits for legislators. Hold them accountable for showing up to meetings, etc.