The Middletown Press (Middletown, CT)
Gov’s budget avoids broad tax hikes
Lamont proposes 2-year, $46 billion spending plan
HARTFORD — Gov. Ned Lamont on Wednesday proposed a middle-of-theroad, two-year, $46 billion budget for a state that remains under a dark shadow of the coronavirus, which has stifled the economy and killed 7,300 residents.
Kicking off the state budget season and its June 9 deadline, Lamont asked state lawmakers to approve his “Connecticut’s Comeback” plan to use at least $1.7 billion in anticipated federal pandemic-relief money..
He also wants lawmakers again to withhold $377 million from the last hike in the sales tax that was supposed to go to towns and cities. He wants to use it to help plug part of a projected deficit of over a billion dollars in the budget year that starts July 1.
While he avoided broadbased tax increases that the progressive wing of legislative Democrats would like to saddle on the state’s wealthiest, Lamont proposed a $90 million-a-year mileage tax on large trucks.
Also, an increase on the price of gasoline from wholesalers as part of a regional climate initiative would bring in about $24 million in the second year of the budget cycle.
Republicans said could cost Connecticut motorists an additional 17 cents per gallon.
And while state finances have remained on track, thanks to a surprising increase in sales and income-tax revenue and an influx of 18,694 new residents, Lamont stressed the need to better foster the workforce to cut unemployment while more vaccines are delivered in the coming months.
The state faces rising debt, pension costs and health care expenses, leading to a projected shortfall of $1.2 billion, which Lamont would pare down with federal coronavirus stimulus payments, the state’s own emergency reserves, savings from efficiency efforts, postponing a transfer to cities and towns and delaying a small business tax cut of about $15 million.
In a speech with few details on the biennial proposal, Lamont said his original plan to stare down billion-dollar budget deficit “had some twists and turns thrown in.” But he said the state has stood out in a national public health crisis.
Lamont plans on creating a mileage tax for big trucks, similar to New York State and Oregon. In addition, further revenue would come from the full legalization of marijuana, as well as sports and online gambling, which remain the focus of closed door negotiations with the two Native American tribes that operate casinos. The truck tax would generate about $90 million a year, while legal cannabis and the expansion of gambling opportunities could bring in more than $100 million in the biennium starting July 1, 2022.
“Massachusetts dispensaries are advertising extensively here in Connecticut,” said Lamont, who campaigned in 2018 on the full legalization, which has remained stalled in the General Assembly. Lawmakers, however, have balked at the idea. “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.”
“Inevitably, there will be trade offs, just like the many families across this state do with their own budgets,” Lamont said in a 25-minute online address. “And just as those same families are managing and struggling through the economic implications of a global pandemic, so are we.”
Lamont voiced relief that Congress seems to finally be heading toward another relief package, which can be combined with economic growth and a partial reliance on the $3.5-billion emergency reserves.
“But let’s face it, the Connecticut budget is still burdened with high fixed costs accumulated over the decades, and these costs plus a COVID economy result in deficit projections in each of the next two years,” he said. “With our continuing success in streamlining government, we have reduced projected deficits to less than $1 billion annually.”
His five-point proposal focuses on beating COVID; making the state more affordable for the middle class; upgrading transportation; modernizing state government; and growing the economy. Spending would increase by 2 percent in the first year and 3.5 in the second. There would be razor-thin surpluses projected of $3.2 million and $4.2 million.
The governor’s proposal includes:
⏩ Saving $91 million in the first year and $249 million in the second year, through the closure and sale of state buildings and facilities, including the closure of the Department of Revenue Services office in Bridgeport, and engaging in energy savings, including the shift to LED lighting.
⏩ A two-year wage employee freeze to save $140 million, which is the subject of active negotiations.
⏩ A tax amnesty program would generate $76 million over the biennium.
⏩ About $6.3 million over the biennium for three new groups of State Trooper training classes.233 million. Currently the 913 troopers has 216 eligible to retire by July 1, 2022.
⏩ About $2.85 million in each budget year to start broadband mapping, planning, and implementation to bring better internet service to cities and rural areas.
⏩ About $5 million to help train support 500 workers for new careers in healthcare, manufacturing, information technology, truck driving and clean energy careers.
⏩ About $1.3 million in the second year of the budget would be used to increase the number of trains on the Waterbury line from the current 15 to 22 each weekday.
⏩ Saving $160 million over the biennium by stretching out a multi-decade payment plan for the State Employees Retirement System by three more years.
⏩ An additional $100 million is provided to the 25 distressed municipalities sourced from the Coronavirus Relief Fund and state bond funds, on top of $75 million that was provided in the current budget year.
“The past year has been an exceptional challenge to our cities and towns,” Lamont said. “There isn’t a single mayor who in 2019 budgeted for a pandemic in 2020, and they are struggling to build this new reality into an already tight budget for 2021 and beyond.”
New Haven Mayor Justin Elicker, who is looking at a $66-million deficit, said he was disappointed with the governor’s proposal.
“This budget is a starting point, and while I am deeply disappointed that the governor chose not to include desperately needed revenue for our community,” Elicker said, stressing the need for more reimbursement under the state’s program to pay cities and towns that host tax-exemption property. “I intend to work with our partners in the legislature to see that these dollars are secured. They are essential for our residents’ wellbeing and preventing a significant property tax hike on some of our state’s poorest people.”
Democratic leaders were generally supportive, stressing that budget proposals from governors typically go through a massive review process, rewriting in committee, then closed-door final negotiations between lawmakers and executives before their reach debate on the floors of the House and Senate.
Senate President Pro Tempore Martin Looney, D-New Haven, said he liked Lamont’s proposal to add $100 million for those payments in lieu of taxes.
But Sen. Cathy Osten, DSprague, said she was concerned that at a time when state government is shedding employees who are heading into retirement, nonprofit social service providers are in desperate need of about $460 million, which she will work toward as co-chairwoman of the budget-writing Appropriations Committee.
“I think it’s extremely important to make sure the safety net remains,” said Rep. Toni Walker, D-New Haven, the other chairwoman of the Appropriations Committee.
Republican criticism of the proposal centered on the high cost of living in the state.
“What I don’t see in this budget are the bold proposals we need to get out of this pandemic,” said House Minority Leader Vincent Candelora, R-North Branford, who is concerned that 16,000 school children seem to have disappeared from the statewide school population amid the shutdowns and distance learning over the last 11 months.
“Fortunately we have up until April for the legislature to dissect this and see where we are,” Candelora said. “I think some of the spending cuts the governor put in his budget are certainly worthwhile.”
“This is not how you would plan a family budget,” said Senate Minority Leader Kevin Kelly, R-Stratford. “You don’t sit there and say I can go and plan to spend this amount of money because I’m going to get another stimulus check from Washington, and it’s going to be another $1.6 billion dollars. That’s not how Connecticut families operate, and certainly by extension the legislature shouldn’t be the same way.
Various legislative committees will soon begin hearings on the governor’s bills.