State budget deal strikes the right balance

While Lamont made fixing the budget his top priority upon taking office in 2019, it would be premature to say that his goal has been accomplished.

Democrats, including Gov. Ned Lamont, are justifiably proud of the budget they've crafted in the soon-to-conclude 2022 state legislative session. The state of Connecticut, which for years suffered from budget shortfalls and resorted to accounting gimmicks to make the numbers add up, is this year cutting taxes, investing in necessary projects and paying down long-term debt, all at once.

With every position in state government up for election this year, it's important for officials to put their best vision forward for the state's voters. More importantly, it's vital for the future of Connecticut that we get our books in order.

State Republicans, mostly shut out of power for the past decade other than a two-year power-sharing agreement in the Senate after the 2016 election, were less enthusiastic. The abnormally large sums of money flowing into state coffers mean that more should be going toward tax cuts, leaders said. This isn't unexpected, and there's some justification for this belief. The budget situation has no recent precedent.

The current budget surplus is nearly $4 billion. The rainy-day fund is as large as it's allowed to be by statute, and while long-term debt related to pensions and health care remains a concern, the state has done more to pay down those bills in the past few years than it had in decades.

It would be misleading, though, to think our problems have been solved. While Lamont made fixing the budget his top priority upon taking office in 2019, it would be premature to say that his goal has been accomplished. Too much of the current situation is dependent on one-time occurrences or what could be temporary realities.

COVID relief, or course, is a major factor. The federal government has sent huge sums of money to state and local governments in the past two years to cover losses from the pandemic, and while that help has been welcome, it's also skewed our vision of what government funding looks like. Those revenue streams won't last much longer, and we clearly can't make future plans based on them.

That relief money also came with restrictions — Washington did not want to write a big check to states and have it all go directly to tax cuts, but instead it is meant to be used to fund necessary pandemic-related projects. That has limited Connecticut's options, but the governor and legislative leaders believe they have found the best way forward and are cutting car taxes, offering a child tax credit and cutting fees for seniors.

As always, state funds are heavily dependent on the stock market. Even with measures taken to limit volatility, a healthy Wall Street means good times for Connecticut's budget, which has mostly been the case for Lamont's time in office. Again, as always, that's subject to change, and the good times could go south if the economy falters.

That, along with the COVID relief conundrum, is why some of the tax cut proposals are not long-term, but offer mostly immediate relief. We don't know what the budget situation will look like in a year or two.

It would surely please some voters and interest groups to cut more long-term taxes. But this appears to be the more responsible path.