Gov. Ned Lamont”™s proposed biennial state budget was greeted with cautious optimism and undiluted concern by leading business and social organizations across the state ”“ and a section of the budget that raised the notion of education cuts was greeted by a potential retaliatory action by the president of the University of Connecticut.
The governor”™s proposed budget would spend more than $50.5 billion over the next two years while maintaining fiscal guardrails for another decade and enacting the first reduction in the state income tax since 1996. The full budget proposal can be accessed here.
Carol Platt Liebau, president of the Yankee Institute, a Hartford-based libertarian think tank, applauded Lamont”™s proposed renewal of the state”™s budget controls by noting this “bipartisan agreement will continue to impose guardrails designed to ensure the state can”™t spend more than the economy can support, and its citizens can afford ”¦ For over two decades, lawmakers refused to fully implement the cap.”
Eric Gjede, vice president for public policy at the Connecticut Business and Industry Association (CBIA), believed the Lamont proposals had merit, but expressed concern about their transition from concept to legislative action.
“We see a lot of positives in this budget proposal, particularly the individual tax relief measures and the full restoration of the pass-through entity tax credit ”” which will give struggling small businesses a much-needed boost,” he said. “It’s critical that policymakers fully leverage the state’s robust fiscal health and continue pursuing solutions for addressing the labor shortage crisis and positioning our economy for strong growth. As the budget proposal moves through the legislative process, we also urge lawmakers to allow small businesses access to R&D tax credits, repeal the sales tax on workforce training, and finally sunset the temporary corporate tax surcharge, which has long sent the wrong message about our business climate.”
The Connecticut Conference of Municipalities (CCM) issued an unattributed statement expressing satisfaction the proposed budget “acknowledged that current education aid to municipalities is insufficient to meet the needs of our students and that additional funding to address this must be a priority as negotiations move forward.” However, the CCM expressed disappointment “that there is not more in the budget to address the regressive nature of the property tax and provide municipalities with additional financial support or mandate relief that would enable towns and cities to enact meaningful reductions to the property tax.”
AARP Connecticut State Director Nora Duncan praised Lamont for putting “a strong emphasis on protecting patients and reigning in unsustainable health care cost growth. His plans to increase transparency for pharmaceutical manufacturers and to join an interstate consortium to purchase prescription drugs at a discounted rate will help lower medication prices for consumers.”
But Duncan also warned that Lamont”™s proposed income tax reductions “do not include a fix for the existing ”˜benefit cliff”™ for retirement income tax exemptions. Under current law, older adults become ineligible for the tax exemption on retirement income if they earn even one penny of income over the cutoff (currently $75,000 for an individual and $100,000 for a married couple) in any given year and can face a significantly higher tax liability than their gain in income.” Duncan also faulted the governor for not focusing on making “reforms in the generation market to lower the cost of standard electric service offered by the state”™s two electric distribution companies.”
Perhaps the biggest critic of the Lamont proposals was UConn President Radenka Maric, who voiced her displeasure about proposed funding cuts to her school ”“ Lamont”™s proposed budet includes a $160 million cut to UConn”™s Fiscal Year 2024 funding and an estimated $200 million cut for the school”™s Fiscal Year 2025 funding. Madic warned she would withdraw UConn from playing in Hartford”™s XL Center as a cost-cutting measure.
“We play at the XL Center, and we pay to play there, so the money that we generate there doesn”™t go to us and athletics, it goes to Connecticut,” said Maric in a report by UConn”™s Daily Campus student newspaper. “When I go and talk to owners of the restaurants, hotels and the parking lots, they say that [their] business only spikes when UConn is playing in Hartford, and that”™s when they generate revenue. So, I was telling the governor, if there is a cut that I have to do, I”™m not going to put the cuts on academic quality, I will do the cuts and make the decision to pull out of the XL.”
