Creating the illusion of fiscal austerity
Give Gov. Ned Lamont some credit. As the first quarter of his term ends in the next few days, the governor has succeeded in angering Republicans and fellow Democrats alike.
So, he really can’t be doing that badly. And he has three more years coming.
Sure, Lamont’s taking heat for holding back on releasing millions of bucks for cities and towns. But Moody’s Investor Services praises his fiscal austerity, pumping up the state’s bond rating. Yet, his “debt diet” is angering state lawmakers.
By holding up the annual legislation for capital projects worthy of longterm financing, which usually passes on the heels of the state budget in the spring, Lamont stood the usual General Assembly process on its head. Wah, wahh.
Combine that with the many cancellations of the usually monthly meetings of the State Bond Commission, and state taxpayers at least have the illusion of fiscal austerity during Lamont’s first year.
Ah, but January is coming, and with it Lamont’s expected release of a flood of municipal aid, and his desired trucktolls bill, not at all in that order.
Remember the uproar when thenGov.
Dan Malloy proposed making towns and cities finally pay for a portion of their local teacher-retirement contributions that are — now and then — paid by the state?
It made eminent sense for towns with higherthanaverage teacher salaries (Hello, Greenwich!) to finally contribute to the Teachers’ Retirement Fund, which has a $17billion unfunded liability. But the subsequent uprising in the General Assembly ultimately killed that good idea.
So, Lamont’s cancellation of bond commission meetings throughout the summer into fall was a nice maneuver to save some money, avoiding the usual monthly shopping list of political goodies that elected officials use to illustrate their juice to the folks back home, who want the goodies but don’t want to pay for them.
Lamont controls the bond commission despite a weak attempt by Democrats back in the spring to take it away from the governor.
Lamont released about $15 million the other day for local aid, with more to come in January, he intimated, if the toll bill goes through. That’s politics, folks, and Lamont is learning.
Another $46 million in affordable housing was also on the agenda, plus $135 million in transportation funding.
I enjoyed the backandforth the other day between Lamont and one of the two Republicans on the 10member commission: Rep. Chris Davis of Ellington, ranking member of the legislative Finance Committee.
“We haven’t borrowed and allocated as much money as we have in years past,” Lamont pronounced.
“But I think that our fiscal discipline has been recognized around the country. You maybe saw last week when Bloomberg reported our Connecticut bonds used to trade like BBB and now they’re trading like an A. What they meant by that is not simply that we have a lower interest rate ... and savings of millions of dollars to the taxpayers. But it also sends a message around the country that Connecticut is getting its act together ... That it’s slowly getting its fixed costs under control.”
Moody’s emphasized the state’s robust emergency reserves, which is projected to reach $3 billion in about a year. “They said the other reason that we’re slowing is that we have an inefficient transportation infrastructure,” Lamont said at the start of the meeting. “Hopefully we’re going to have a plan in place by early next year on what we’ve got to do going forward.”
Davis homed in on $12 million in loans to a 129unit housing proposal backed by Alan Lazowski, the parking lot mogul behind LAZ. “They should be able to afford it themselves,” Davis said to Mike Freimuth, executive director of the Capital Region Development Authority, who was put in the hot seat at the desk fronting the commission.
“We’re not banking on an individual, we’re banking a deal,” Freimuth replied.
“I want this housing to be here,” Lamont chimed in. “I want this city to come back to life. I don’t want that money going to Austin or Palo Alto. This makes us competitive. This helps our city grow and this is key to economic development, I believe.”
“I understand where you’re coming from,” Davis said. “My concern is that we are still facing fiscal uncertainty in the state of Connecticut. We are still facing a large debt. It is a significant amount of money from where I come from. My concern is that it sends a message that we’re providing borrowed money. And we’re giving it to some of the richest people in the state. I’m going to be opposing here this today because I don’t think it sends the right message to state of Connecticut.”
It’s all about messaging and as Lamont steams into year two, he still has to convince many lawmakers on truck tolls and the debt diet.