Legislative News

When the Labor Day weekend of 2026 signals the traditional start of the fall political season, the race for governor will become clear. But a full year away, that race is already taking shape.

While Gov. Ned Lamont currently says he’s still pondering a third, four-year term, political observers say he’ll certainly run again. They say that his engagement and energy, with daily public events organized by his office, such as ceremonial bill signings for legislation actually signed weeks earlier, are sure indicators. Lamont has signaled as much.

“If Lamont were to run, it’s his election to lose because of the power of the incumbency,” said Gayle Alberda, political science professor at Fairfield University. “The perks are his achievements and record. He has a built-in infrastructure, credibility and prestige, plus high levels of name recognition before even engaging again with voters.”

“Everything is lined up for him for a third term,” said Gary L. Rose, a scholar in-residence at Sacred Heart University.

Recently returned from his summer home on a Maine island that’s been a family property since 1917, a reporter tried to finally get a straight answer. “You’ve been off two weeks, you gonna tell us something now?” the reporter asked in New London last week.

“Nope,” Lamont replied. “Soon. I think we’re making good progress in this state, and I love what we’re doing. I’m inclined to do it, but I’m just trying to put it off a little bit longer.”

One of the top-six governors in approval ratings, according to a recent nationwide poll, Lamont has a big advantage over state Rep. Josh Elliott of Hamden, who is challenging the governor from the left. Elliott is hoping to capture the kind of political lightning in a bottle that Lamont himself grabbed in 2006: a primary victory over then-U.S. Senate Joe Lieberman, who went on that fall to keep his seat, running as an independent.

On the Republican side, the outgoing Westport First Selectwoman Jennifer Tooker, Timothy Wilcox of Norwich and fourth-year state Sen. Ryan Fazio have declared their candidacies. Outgoing New Britain Mayor Erin Stewart is also expected to join the fray, eventually turning her exploratory campaign into a candidate committee.

Republican State Central Committee Chairman Ben Proto said that the state’s public financing system should make the eventual GOP nominee competitive with Lamont, a multi-millionaire who does not take a state salary and paid for his 2018 and 2022 campaigns – more than $40 million – from his own pocket. In 2022, he claimed $54 million in income, mostly from investments.

“This is a guy who makes a million dollars a week if he doesn’t get out of bed,” Proto said of the governor. Any general election expenditures over $15 million per candidates is probably not needed, he said. “At some point you reach a diminishing return on the amount of money you spend. You get to run a few more ads.” 

Statewide voter registration includes 488,041 Republicans, 822,499 Democrats and 957,782 unaffiliated voters.

How the race, especially on the Republican side, is anyone’s guess. A spring GOP convention would lead to an endorsement, but it’s possible a summer primary could follow. Two years ago, despite former state House Minority Leader Themis Klarides winning the nomination to run for U.S. Senate against Democratic Sen. Richard Blumenthal, Leora Levy defeated her in a primary following an endorsement phone call from Donald Trump. 

Touting an in-house poll that shows Stewart within striking distance of Lamont, Morgan Wilson, senior advisor to Stewart’s exploratory committee, recently said that the survey of 400 GOP voters indicate support for a nominee “from outside Fairfield County with a proven history” of winning elections.

“It’s time for a new generation of proven leadership, not one defined by personal finances or Hartford insider ties,” Wilson said in a statement.

Fazio, in a Friday statement, said that during the two weeks he’s been on the campaign trail, he’s gotten positive feedback. “One thing is clear: Connecticut voters are ready for positive change,” he said. “They’re ready for lower electric bills, lower taxes, and law and order – that’s the exact message we are bringing across our state.”

Rose, a longtime SHU politics professor, said that the poll released by the Stewart campaign occurred within days of Fazio jumping into the campaign. “I don’t doubt that she’s the leading Republican, but Ryan has a good chance of closing the gap, particularly among conservative Republicans,” said Rose.

“Those August primaries have low turnouts,” Rose said. “Any poll showing she’s ahead is very premature. Ryan is definitely right of center and I think he’s a viable candidate, particularly among conservatives. Erin has a reputation of working across the aisle, but I am not sure if that’s what conservatives want at this moment.”

Nearly four years ago, Lamont waited until the second week of November to announce plans to run for a second term. He recently hosted several of the state’s big-city mayors at the Governor’s Residence in Hartford. But after seven years in office, progressive Democrats in the legislature are eager for higher taxes on the state’s wealthiest to fund social programs at a time when they – and other federal funding streams – are being threatened by the Trump administration.

Rose said Friday that when Luke Bronin, the former Hartford mayor, recently announced a potential primary challenge to 1st District U.S. Rep. John Larson, it was a solid tip that Lamont was running for a third term.

“I think in Lamont’s case, he’s very popular, his approval ratings are strong” Rose said. “Obviously he has a war chest that’s a bottomless pit. Plus, there’s a bipartisan chord he has struck with the public. A number of Republicans in the business community appreciate him. He’s not ideological. He’s a centrist. He can certainly talk about the state budget surpluses.”

“Even though the laws are enacted by the General Assembly, the governor is the person we blame or reward,” said Alberda, of Fairfield University. Pitfalls for incumbents include economic down turns and large scandals. In 2004, then-Gov. John Rowland resigned under pressure, when the state Supreme Court ruled that he had to testify before a state House Committee of Inquiry that looked into the awarding of lucrative state contracts and tax breaks. He wasn’t halfway through his third term. By the end of that year, Rowland pleaded guilty to federal felonies. He was recently pardoned by Trump.

While Lamont’s signature bill this year might be the $300 million child case endowment fund, his veto of a controversial affordable housing bill that his staff helped negotiate with legislative leaders, earned Lamont some animosity and it seems less likely that a special legislative session will be called on the issue for September.

Without an early fall housing initiative with fellow Democrats, Lamont could further delay announcing a reelection campaign until the tension subsides.

Elliott on Friday chided Lamont for not joining most Democratic governors who signed a Thursday letter sent to Trump, asking that he back away from possibly sending National Guard troops into their states. 

“There are two trains of thought, generally about dealing with the fed government right now,” Elliott said in a phone interview. “You don’t get caught in the president’s cross hairs or you everything fight tooth and nail. Both sides come at this from trying to protect our people. With three-and-a-half years left in his term, if we do not fight, we will not be OK. The worst thing we can do is try to weather the storms.”

On June 8, Lamont joined in a statement from the Democratic Governors Association condemning Trump’s deployment of National Guard troops to Los Angeles. Two days later, he joined Attorney General William Tong in criticizing the action. 

Staff writers Alex Putterman and Paul Hughes contributed to this report.

Original article found on MSN

HARTFORD — On the last day of the legislative session, state lawmakers Wednesday approved capital projects totaling about $6.6 billion for the two-year budget that starts July 1. That bill includes long-term bonding for lowering state energy bills, financing billions in school construction projects and expanding security measures for houses of worship.

The 256-page bond bill passed 144-4 in the House of Representatives and 35-1 in the Senate. Although the bill authorizes the spending, projects and agencies would still face scrutiny from the Office of Policy and Management before funding is authorized by the State Bond Commission, which is controlled by the governor.

Buried in the package are revisions to the state budget bill that passed the House and Senate on Tuesday. One Republican senator railed at the errors that needed correction in the bond act and chastised Democrats for using the package to skirt further debate on several issues.

The bond act includes a variety of legislative initiatives that failed to win approval elsewhere in the hundreds of bills that passed the House and Senate, including new requirements that people who bring more than 2,500 empty cans and bottles to redemption centers would have to present identification, including their residential addresses, in attempt to cut down on fraud from other states that have five-cent deposits.

Taxes, fees going up in $14.3 billion RI budget as federal relief wanesUnmute

“We’re trying to crack down on that,” said Rep. Maria Horn, D-Salisbury, co-chairwoman of the Finance, Revenue and Bonding Committee. “We see a lot of trucks – according to anecdotal evidence – from out of state. That’s really a truck full of bottles. We are also providing resources for State Police to assist in that.”

“This package confirms our commitment to special education, clean water, aging in place for our older adults, childcare expansion, school repairs, school and nonprofit security, affordable housing, new home ownership, community colleges, brown field remediation, work force development and a host of other ideas and initiatives,” said state Sen. Patricia Billie Miller, D-Stamford, co-chairwoman of the bonding subcommittee.

Sens. Derek Slap, D-West Hartford and Ryan Fazio, R-Greenwich, said continued commitments to security at at synagogues is important. “Nobody should be afraid to pray and nobody should be afraid to worship at a place that is holy and special to them,” Slap said during the late-afternoon Senate debate. He noted that dozens of applications have been filed for the support and not all have received money. “Oftentimes on Saturday I will drive down Albany Avenue in West Hartford where there’re many different synagogues and every single one of them, there is an armed guard outside. It’s awful that this is something that’s needed.”

“It is vital that we prioritize, first and foremost, the safety of our residents, especially our Jewish residents who are currently facing the threat of increased anti-semitic attacks,” Fazio said. The bond act includes $10 million a year for increased school security and $5 million a year for non-profits including religious institutions.

Tribe expansion and Capitol improvements

Another provision indicates that the state would challenge attempts by any of the state’s Indigenous tribes if they attempted to acquire more land. “The conversion shall be deemed contrary to the interest of the state and its residents,” the bill said. CT Insider has reported that the U.S. Department of the Interior is reconsidering earlier, failed efforts by state-recognized tribes to finally gain federal recognition.

In another section, a deadline of January, 2026 is set to identify and possibly commission additional statues to be added to the exterior of the State Capitol building “that reflect the diversity, character and accomplishments of the state.”

The bond act, which culminates the state budgeting process includes grants for towns and cities, based on their size, to add to their local budgets. The amounts range from $2,620 for the town of Andover to $13.5 million for Bridgeport, $15 million for Danbury, $10.4 million for Norwalk, $10.2 million for New Haven and $9.9 million for Waterbury.

It also includes a $40 million increase in the current $50 million program for cleaning up old, contaminated industrial sites, said Sen. Ronald Napoli Jr., D-Waterbury, co-chairman of the bonding subcommittee of the Finance Committee. Napoli said that the funding would be distributed based on a formula and individual grants.

Lawmakers on both sides of the aisle commended the bill’s funding to continue security efforts at religious institutions, particularly synagogues that have been targets for extremists. 

More funding will be available for the state’s aging-in-place programs. Converting abandoned retails strips and malls would also see bonding support in a new “Greyfield program” with $50 million for public-private partnerships run by the Department of Economic and Community Development.

 “As the retail mall industry continues to decline nationwide many of our cities and towns are left with large, vacant, grey structures,” Napoli said. He said that the annual aid for town and city roads, has been increased by 30 percent.

Veteran state Rep. John Piscopo of Thomaston, a ranking Republican on the bonding subcommittee, said that after years of federal pandemic funding, the state has to cut back. “The ARPA funds during Covid, was money flying in from out of the sky for a lot of our agencies,” Piscopo said. “A few agencies grew their bureaucracy with that money. As that money dried up, we were worried that all the shortfalls were coming to the bonding subcommittee.”

He said that while the rule of government finance is not to bond for ongoing expenses, there are some instances of such tactics in the bond act.

“My idea about bonding is this,” Piscopo said. “If  your town got hit by a flood and saw damage and your town doesn’t have the means to mitigate the damage, you can ask the citizens of the state of Connecticut to help.”

Other items include $75 million for information technology; $5 million for state-wide flood and resiliency mapping; $20 million for the Department of Veterans Affairs to fund renovations and improvements, plus $7.5 million to expand the State Veterans Cemetery in Middletown; and a $40 million program to install solar photovoltaic systems on state property.

The bonding legislation repeals a provision of the state budget bill that reduced the annual interest on municipal tax liens that are sold to debt collectors. The change would have reduced the annual rate from 18% to 12%. But the interest rate would have remained 18% year for liens that were not sold to a third party. In addition, the repealed section would have capped attorney’s fees in connection with each aspect of a foreclosure, sale, or other disposition of these liens.

While Bridgeport lawmakers in recent days attempted to include $100 million to help develop a site anchored by a downtown soccer field, the bond act orders the Department of Economic and Community Development and the Department of Revenue Services to assess the anticipated economic impact of the proposed Connecticut United Football Club stadium, including its economic impact and create a report on the issue by October 1. One of the issues on the development would be “when it is reasonably likely that the state may receive a return on a one hundred twenty-seven million dollar state bonding investment, taking into consideration revenue generated from such proposed stadium via payroll taxes, sales and use taxes and other revenue sources.”

Amendments to previous day’s budget bill

The day after the state budget was approved in the House and Senate, the bonding act would also affect provisions in the previous day’s budget documents.

Conservative state Sen. Rob Sampson, R-Wolcott, focused on a rewritten section involving the price that could be paid for out-of-state fabricating. He noted that it could have cost the state millions of dollars in construction costs, but legislative leaders noticed it and changed it in the bond act.

“This section was a stand alone bill that could have developed a heated and lengthy debate,” Sampson said. “Everyone knows this is a highly contentious issue. The issue is, that this was passed yesterday, as part of the budget, circumventing the minority as I mentioned, but they discovered they made a mistake. They made a mistake by leaving out a word, a word that would have effectively required the state Department of Transportation to end up paying prevailing wage for countless different items in the projects that they perform. That might, in fact result in millions of dollars in additional costs.”

 The bonding bill modifies provisions related to the development of the South Meadows section of Hartford. It requires the state to include the site in the basis for state payments to Hartford until the site is redeveloped and removes a provision specifying that none of the provisions apply to the Hartford Brainard Airport. It also specifies that the newly established South Meadows Development District’s powers or actions do not supersede, or authorize any conflict with, federal law or any federal aviation regulation concerning control of Hartford Brainard Airport.

Another section overturns a provision of the budget bill that reduced the annual interest on municipal tax liens that are sold to debt collectors. The change would have reduced the annual rate from 18 percent to 12 percent, which lawmakers have tried and failed to reduce in recent years. In addition, the repealed section would have capped attorney’s fees in connection with each aspect of a foreclosure, sale, or other disposition of these liens.

The bonding bill also repeals a portion of the budget bill that would have created a working group to oversee and monitor expenditures from each reserve fund of the Connecticut State Colleges and Universities system or the higher education institutions within CSCU.

The bond act delays the effective date of a new property tax exemption for property located on reservation land that is held in trust for a federally recognized Indian tribe by one year to Oct. 1, 2026.

The bonding bill repeals a provision in the budget bill that eliminated both the $150 application fee and $155 annual renewal fee for a paramedic license. Instead, the bonding bill eliminates the $150 application fee but retains the $155 renewal fee for the license.

Lamont’s surprise visits

It’s a semi-tradition for governor’s to address joint gatherings of the House and Senate at the end of the session. This year, Gov. Ned Lamont decided to pay informal visits to first the House and then the Senate, during a quick 45-minute jaunt through the State Capitol. Upon entering the bustling House chamber shortly after 8, Speaker Matt Ritter suggested that Lamont was available for members to detail their grievances.

State Rep. Bill Buckbee, R-New Milford, offered the governor some candy. “We’ve got a budget that I think most of us are proud of, and even if you didn’t support it, proud of the process we went through,” Lamont told reporters. “We did it with good humor with each other. We’re not Washington, we’re Connecticut.”

On the two-year $55.8 billion state budget:

“At the end of the day look at what we did on child care, look what we did on special ed, look at what we did to make a big difference for our towns and cities for years to come.”

Why visit legislative chambers instead of giving a speech?

“Ah, midnight is too late for them and it is much too late for me, and everybody seemed to love that idea.”

Overall thoughts on the session:

“I think it was pretty good. We’re on time. We have a balanced budget. Compare that to 2017, before I got here. We’re making some strategic investments that I think will make a long term difference. We’re not raising taxes, at least on individuals.”

Original article found on MSN

Connecticut ratepayers are paying slightly more than $1 billion per year in public benefits charges for government mandates and programs through their electric bills, a figure that has escalated rapidly in recent years, according to testimony by both Eversource and United Illuminating before the Finance, Revenue, and Bonding Committee.

That testimony on April 16 was somewhat lost in reports about an exchange between Sen. John Fonfara, D-Hartford, co-chair of the Finance Committee, and Sen. Norm Needleman, D-Essex, co-chair of the Energy and Technology Committee. Fonfara proposed a bill that would essentially remove the public benefits charge from electric bills for several years and authorize a “Green Bond” for up to $800 million annually to continue funding the programs covered under the public benefits charge.

According to legislative testimony, however, even at $800 million per year, the bond fund would not cover the entirety of what Connecticut ratepayers are currently required to pay. Vice President of Distribution Rates and Regulatory Requirements for Eversource Doug Horton testified before the committee that Eversource customers currently cover $800 million per year in public benefits, an increase from $450 million per year just five years ago.

Meanwhile, United Illuminating testified in writing that their customers currently pay roughly $250 million per year in public benefits charges, bringing the total cost to ratepayers to more than $1 billion per year.

Those benefits include government mandated energy procurement requirements for solar energy which, at this point, add up to $380 million per year for Eversource customers, eclipsing the $350 million per year the company spends maintaining and upgrading the electric grid. Horton said that while electric sales remain roughly the same as they were 24 years ago thanks to energy efficiency programs, overall spending has gone up.

“These outcomes aren’t coming for free,” Horton said. “These funds have generated meaningful results in curbing electricity consumption and producing benefits on the macro scale but to realize those benefits come at a cost and come through the public benefits charge on a customer’s energy bill.”

That includes $160 million per year in conservation load management spending, $130 million per year for net metering for solar, and an additional $70 million for “behind the meter” distribution subsidies, mostly for solar energy, Horton said. 

Connecticut’s public benefits charges account for about 57 different programs that range from subsidies and rebates for electric vehicles and new technologies, to procuring energy from particular sources like the Millstone nuclear plant and paying for hardship costs and low-income discounts for customers who can’t pay their bill.

Connecticut is usually among the top two or three states in the country when it comes to the cost of electricity, driven in part by supply constraints and the public benefits charges. While lawmakers and Gov. Ned Lamont often point to Connecticut being on the tail end of the national energy pipeline, Connecticut’s electricity costs are still higher than its New England neighbors.

The high cost has a cascading effect, according to Eversource officials, as those who can’t afford to pay their bill are covered by those who can, or they switch to solar for their homes, thus driving up the public benefits charges for everyone, including those who can’t afford their bill to begin with.

“We have seen in Connecticut the past-due balances of unpaid bills triple in the last five years,” said Jess Cain, vice president of customer operations and assistance programs for Eversource, who said unpaid balances grew from $100 million per year, peaked at $350 million, and has come down to $200 million since Eversource began collections again following the COVID pause.

“The public benefits charge… is regressive,” Cain said. “They don’t vary based on income.”

Both Eversource and United Illuminating were testifying in support of a bill put forward by Fonfara and backed by a bipartisan group of lawmakers that would move the public benefit charges to a state bond and more closely manage the procurement of energy supply.

The public benefits charge, which was recently broken out on customer’s bills to make them more visible, became a political hot potato in the summer of 2024 after the Public Utilities Regulatory Authority allowed those benefit costs to build up over four years, citing COVID hardships. 

The resulting rate increase angered the public and politicians and put PURA and its chairman Marissa Gillett under the spotlight as Connecticut’s major utility companies began to push back on the regulator for cutting their rate requests and ultimately lowering their credit rating. The blowback threatened Gillett’s reappointment to PURA, and reportedly necessitated a backroom deal between the Lamont administration and majority Democrats to make PURA a quasi-public agency and give Fonfara a seat on it.

While the bill appeared to have support among lawmakers and the utility companies, there were many opposed to the legislation, claiming it will gut the state’s push toward green energy like solar.

Mike Trahan, executive director of the Connecticut Solar & Storage Association, said the bill would essentially alter net metering to make it less attractive for homeowners to install solar panels and argued that it was a “myth” that “the tiny fraction of Connecticut property owners who use solar to make their electric power are somehow shifting costs to the other million plus electric customers who do not.”

“This will be a crushing blow to solar in this state,” Trahan said, noting that there is only 4 percent solar penetration in Connecticut, compared to 30 percent in some other states. 

“People talk today that we’re trying to kill the solar industry, we’re not trying to do that whatsoever,” Fonfara said. “The reality is solar is eating away at [company] revenue and we have to have revenue supplement, if we’re going to continue down this path, more revenue that will outpace costs. That’s how we’ll reduce rates.”

Fonfara’s energy bill was passed out of the Finance Committee and was transferred to the Energy and Technology Committee where Needleman serves as co-chair alongside Rep. Jonathan Steinberg, D-Westport.” Needleman was skeptical of the bill and questioned whether Eversource had written it during the public hearing, leading to a tense exchange. Needleman questioned several aspects of the bill before being cut off for time limitations.

“All I will say is I hope this bill will come to our committee where it belongs and we will have a robust conversation about this,” Needleman said. “But this is not the way to solve these problems and let me say we all care about electric rates. This is not the way to solve it, nor is it procedurally right and the senator to my right knows that.”

Original article found at the Inside Investigator

With a new year beginning, there are a handful of state laws changing things up in Connecticut.

New laws in effect on Jan. 1 tackle labor issues, including phasing-in mandatory paid sick days to more people. There’s also a new law going into effect surrounding elections, including absentee ballot security. And, greater protections are going into effect for home health care workers, along with changes to the state’s minimum wage. Here’s more on some of the new policies going into effect in January 2025. 

The Democratic dominated state Senate, over Republican opposition, on Wednesday approved legislation containing eight separate pieces in an omnibus bill ranging from a lowering of commercial vehicle taxes in some of Connecticut’s higher-taxed communities, to prohibiting state employees from subcontracting school construction projects, and expediting (more…)

Sunday alcohol sales, allowed in Connecticut since 2012, benefited neither supermarkets nor package stores, UConn researchers found, feeding the ongoing debate over grocery store wine sales.

“Using nationwide data from 2004 to 2021, we find a short-term increase in beer sales post-policy change,” researchers wrote in a recently published study, “but no significant long-term economic effects on grocery and liquor stores. Our analysis also shows similar treatment effects for chain and standalone liquor retailers, suggesting limited lasting implications for the liquor retail industry’s performance and conduct after Sunday sale restrictions were lifted.”

The prohibition against selling alcohol on Sundays was one of the last of Connecticut’s puritanical Blue Laws.

The study counters package store owners’ dire predictions about beer sales lost to grocery stores on one of the week’s busiest shopping days. In 2011, when a proposal to allow Sunday sales died in the legislature, Carroll J. Hughes, lobbyist at the time for the Connecticut Package Store Association, called the decision a victory for corner stores throughout the state. Hughes told the Connecticut Post that mom-and-pop packies would have lost major business to supermarkets, forcing hundreds out of work. He also said estimates that the repeal would raise millions in added tax revenue were overstated.

“It doesn’t raise money and it certainly eliminates jobs,” Hughes said of the proposal. “I’ll lose 350 stores, probably 600 jobs in the wholesale-retail sector and we don’t need that right now, just for an experiment that somebody’s saying ‘let’s open up and try it.'”

UConn researchers, however, found “there is no statistical evidence of adverse or positive treatment effects on the long-term economic outcomes for grocery retailers and liquor stores after the policy change.”

Published in January in The Journal of Wine Economics, the study was done by Cristina Connolly, assistant professor of agriculture and resource economics in UConn’s College of Agriculture, Health and Natural Resources, and Ph.D. student Alyssa McDonnell, along with collaborators Sandro Steinbach from North Dakota State University, and Marcello Graziano from UConn’s Connecticut Center for Economic Analysis.

The Connecticut Food Association, an advocacy organization for grocery stores, highlighted the report on its website with the headline, “Study: If You Let People Buy Beer at Grocery Stores, the Liquor Stores Still Survive.” The organization is pressing for wine sales in grocery stores through a website, CT Wine Now, that notes 42 other states allow such sales.

The state legislature is not considering the issue in this session, but supermarket representatives across the state made a big push in 2023 to legalize the sale of wine in their stores. Ultimately, however, Connecticut’s 1,250 package store owners won the day, persuading lawmakers that wine and spirits should remain their market domain.

In an attempted compromise, the 2023 bill said no food store within 1,000 feet of an existing package store would be allowed to sell wine, and all wine in supermarkets would have to be from vineyards producing 100,000 gallons a year or less — about 43,000 cases. CT Wine Now cites the added convenience of wine sales in grocery stores and contends that people would not shop less at local liquor stores.

Advocates point to another UConn study released last year in which the Connecticut Food Association asked researchers to analyze the economic impact of allowing grocery store wine sales. The major findings, which included a household survey, were that a clear majority of almost 82 percent of the general public support grocery stores sales and that the policy would have little impact on consumers’ overall wine buying habits, UConn Today reported.

But package store owners have called the proposal a profit-grab by an industry dominated by national and multinational corporations, including Dutch-owned Stop & Shop.

“Convenience? Are you kidding me? There are package stores in 162 of the 169 towns,” Jean Cronin, a lobbyist and executive director of the Connecticut Package Store Association, said during the debate last year. “That’s a lot of access.”

About 100 package store owners and employees stood up in the hearing room as hundreds more, perhaps 500 or 600 in all, stood in the atrium downstairs, many of them from the recently formed Indian American Package Store Association of Connecticut. 

Consumers will be hurt, the liquor store representatives said, as the market-setting supermarkets look to sell just a few brands, making it unprofitable for distributors to keep offering some 50,000 varieties of wine in Connecticut stores.

“In many small towns, they are the last small business left on Main Street but this legislation could change all that,” Cronin said. “We are a fragile ecosystem.”

Original article found at CT Insider.

Despite the bipartisan praise lavished on Connecticut’s budget constraints, officials never have fully embraced them, spending hundreds of millions of dollars in recent years outside the “fiscal guardrails” — drawing from short-term sources.

But these temporary wells are running dry faster than many anticipated, setting the stage for a budget showdown this May, with funds for education, human services and health care hanging in the balance.

On one side, Gov. Ned Lamont, other moderate Democrats and most of the legislature’s Republican minority are pushing for stricter adherence to these fiscal controls.

On the other are most of Lamont’s fellow Democrats, who want to spend up to $400 million beyond official limits. But they note that besides shoring up core programs, this still would leave finances projected in the black — and poised to further reduce pension debt.

Options for working around the spending cap are shrinking

“I am not going to ask my caucus to vote for a budget that does not have $300 million to $400 million of extra spending,” House Speaker Matt Ritter, D-Hartford, told The Connecticut Mirror on Thursday.

But that’s not an easy task, given that the preliminary $26 billion budget for 2024-25 — the one that legislators want to enhance — already exceeds the state spending cap by $30 million. In other words, there’s no room to add even $1. And that plan only boosts General Fund spending by 2% above current levels.

Further complicating matters, Ritter’s comment came one day after Lamont’s administration reduced projections for this fiscal year’s operating surplus to just $109 million or one-half of 1% of the General Fund. Eroding sales tax receipts and cost overruns in human service agencies have steadily whittled down the $400 million cushion lawmakers built into the budget when they adopted it last June.

Why does this year’s surplus matter for next year’s budget?

Legislators were counting on that $400 million since carrying operating surplus from one fiscal year into the next is one of the chief tools used to circumvent the spending cap. Because those carry-forward dollars technically were appropriated in a prior year, they don’t count against future cap calculations when they are spent.

The legislature carried about $280 million from last fiscal year’s operating surplus into the current budget. That plan also was backed by $544.3 million of the nearly $2.8 billion in flexible pandemic relief Connecticut’s state government received from Congress in 2021 through the American Rescue Plan Act.

But those ARPA funds, which aren’t subject to the spending cap and are the second tool legislators use to maneuver around the guardrails, have nearly been exhausted.

Lamont’s budget office estimated in early February that only $55.7 million in previously allocated ARPA could be re-directed into the next budget, although that number might be slightly larger. The administration is preparing an updated tally and has asked all agencies to report on unspent funds by March 25.

Still, a $109 million surplus and about $56 million in guaranteed ARPA represents about $165 million that could be added to the next state budget without violating cap rules, far below the $300 million to $400 million legislative leaders insist is needed to address a plethora of issues.

Legislative leaders say available funds under cap aren’t enough

Public colleges and universities, which have been big beneficiaries of funds from these temporary sources in recent years, are projecting significant deficits after July 1, despite tuition and fee increases already ordered at community colleges, regional state universities and at the University of Connecticut.

The private, nonprofit agencies that deliver the bulk of state-sponsored social services estimate they lose $480 million annually because government payments haven’t matched inflation since 2007.

Legislators also want to boost funding for a child care industry that hasn’t fully recovered financially from the worst of the coronavirus pandemic as well as for various health care programs that are facing increasing demand.

And despite the shrinking operating surplus, that doesn’t mean the state finances are heading for a deficit. They may not have gotten worse at all.

Though the operating surplus has dropped from $400 million to $109 million, that’s not the only fiscal safety net Connecticut has.

A second program, which forces the state to save a portion of volatile income and business tax receipts, is expected to collect $480 million this fiscal year. Some legislators expect that number to grow in late April when analysts adjust projections based on income tax filings.

Most of that savings program involves capital gains and other investment-related earnings, and the markets have risen considerably since the fiscal year began.

The Dow Jones Industrial Average closed Thursday at 39,781 points, up 15.7% since last July, while the S&P [Standard & Poor’s] 500 is up 17.8% over the same period, according to marketwatch.com.

“If you look at the overall picture, it’s nowhere near as dire as if you look at isolated pieces,” said Senate President Pro Tem Martin M. Looney, D-New Haven.

But there’s still a problem: While the operating surplus can be carried forward to help next year’s budget, the volatility savings program cannot, except under special conditions.

Even if its potential growth in April outstrips the reduction in the operating surplus, the volatility savings program can’t help education, health care or social services. Under the guardrails system, the funds must be used to reduce pension debt or to increase the rainy day fund.

Connecticut already has a record-setting $3.3 billion budget reserve and has paid down an extra $7.7 billion in pension debt since 2020. Over the past four years, 21% of all revenues — excluding those assigned to special budget funds — have gone into the pensions.

Many of Lamont’s fellow Democrats say this system over-prioritizes debt reduction, and that they don’t want to stop saving — but just seek a more balanced approach.

Lamont and GOP say CT can’t lose sight of long-term challenges

Lamont and Republican legislators counter, though, that Connecticut is not out of the fiscal woods from a long-term perspective.

The state failed to save properly for pensions for more than seven decades prior to 2011, forfeiting billions of dollars in potential investment earnings — a gap current and future taxpayers must plug. The state’s unfunded pension obligations remain huge, topping $37 billion entering this year, according to the administration.

What happens if the global economy slides into recession next year, or if Washington begins to pull more funding for states back to pre-pandemic levels, as it did this past year with winter heating assistance, Republican state legislative leaders have asked.

If Connecticut Democrats increase spending as pandemic grants are exhausted, it will be even harder to sustain those investments if future challenges arise, said House Minority Leader Vincent J. Candelora, R-North Branford.

“The fundamental question that Democrats always seem to ignore around spending is sustainability, and that’s why the caps are there,” Candelora said. “If you can’t keep up with those spending levels year to year, you’re putting yourself in a long-term deficit. … This is the behavior we saw 20 years ago and we’re seeing today.”

“One thing that we can’t do is play fiscal gimmicks with these guardrails,” added Senate Minority Leader Stephen Harding. “We’ll be in far worse shape in the long run.”

The Lamont administration also hasn’t shown interest in carving out new ways to work around the cap.

“Any additional state funds that the General Assembly provides in any FY 25 budget adjustment will need to be consistent with a balanced budget that complies with all statutory and constitutional caps,” Chris Collibee, Lamont’s budget spokesman.

Democrats insist that whatever they do will absolutely be legal. The question, for some, is whether it will comply with the intent of the guardrails system.

The preliminary budget for 2024-25 has a built-in operating surplus of $300 million and expects to save another $450 million through the volatility program. Democrats say they don’t want to tap anywhere close to all of that $750 million projected cushion.

They’re exploring an “intercept” of revenue, an accounting maneuver that technically assigns a portion of some revenue source — tax receipts, interest earnings, fees — outside of the budget, as well as an expense that these intercepted revenues would cover. When the spending occurs outside the budget, it no longer counts against the spending cap.

Legislators and governors have used this technique before. A revenue intercept of roughly $150 million to $200 million, coupled with remaining ARPA funds and this year’s $109 million operating surplus, might be enough to resolve the next state budget before the regular legislative session ends on May 8.

To those who say this is a gimmick, Ritter’s response is: Check your history.

Democratic and Republican legislators both gave ground at the end of a nine-month-long budget debate seven years ago to establish unprecedented budget constraints.

“What has made Connecticut move since 2017 has been the compromises, the give and takes,” he said.

Some Democratic legislators insist closer to $1 billion needs to be added to the next budget, Ritter said, adding that caucus leaders, trying to compromise, already have shaved that down to $300 million to $400 million. But that’s as far as they will go.

“If people don’t like what we have, and don’t have better ideas,” the speaker said, “we will pass it [anyway] and see what they do with it.”

Original article found at CT Mirror.

Gov. Ned Lamont stayed well within Connecticut’s fiscal guardrails Wednesday, recommending a $26.1 billion budget that erases $500 million in bonded debt and invests in child care and education while largely holding the line in most other places.

The spending plan for the fiscal year starting July 1 increases base aid for public colleges and universities but reduces overall support despite warnings that it would leave higher education institutions in deficit and forced to trim staff and programs.

The package bolsters K-12 education, though not as quickly as legislators want, scaling back planned increases for magnet, charter and vocational schools. It also bolsters a planned increase in Education Cost Sharing grants from $68.5 million to $74.2 million and keeps universal school meals afloat for another academic year.

Lamont would create several new posts to monitor health care quality and finances but declined to recommend increases for the hundreds of private nonprofit agencies that deliver the bulk of state-sponsored social services. The administration also wants to tighten Medicaid eligibility on the HUSKY program and require some poor adults to acquire 100% subsidized coverage through the state’s health insurance exchange.

And while the plan doesn’t include any major tax cuts — following two years of hefty reductions — the administration is pitching a new plan to try to secure hundreds of millions of disputed tax dollars from Connecticut residents who work remotely for businesses in New York.

The governor’s proposal would boost spending 3.1% over the current spending level and add just $89 million to the preliminary, $26 billion budget he and lawmakers adopted last June for the 2024-25 fiscal year. And much of that spending added onto the preliminary budget involves a nearly $80 million increase in the required state contributions to public-sector pension funds.

But while Lamont repeatedly urged lawmakers recently to embrace Connecticut’s spending cap and other programs that have secured big surpluses, his own plan relies on a commonly used end-run around the guardrails.

Lawmakers often carry surplus funds from one fiscal year to the next because these “carryforwards” then can be spent without counting against future cap limits. Lawmakers already planned to carry $95 million from this fiscal year’s $645 million surplus into 2024-25. The governor would boost that to $140 million.

“For the first time in a generation, the state of Connecticut is not lurching from one financial crisis to the next,” the administration wrote in its budget introduction. “The state’s financial position is stable, and, unlike other states, we are not facing deficits that would result in deep cuts in spending or substantial increases in taxes.”

“Today we have more people working, more people starting businesses, more people joining labor unions with better pay and better benefits, more of our graduates staying in Connecticut, and more out-of-staters wanting to move here,” Lamont said in his budget address to the legislature.

The governor drew mixed reviews Wednesday from legislative leaders.

House Majority Leader Jason Rojas, D-East Hartford, said Lamont offered many good ideas but added he was disappointed not to see more funding for higher education. “We’re trying to fund a system that was built for Connecticut 50 years ago,” he said. “We really need to do a little bit of recalibrating.”

Senate Minority Leader Kevin Kelly, R-Stratford, predicted much of Connecticut’s middle class would appreciate Lamont’s adherence to the spending cap and other budget controls.

“Those guardrails have really brought fiscal stability to the budget,” Kelly said. “That signals to people who create jobs that Connecticut’s a place to do business because you have a stable financial picture.”

House Minority Leader Vincent J. Candelora, R-North Branford, said “overall I’ve found the budget to be reasonable,” but added House Republicans still believe government can afford to provide additional state tax relief – and that many families still need it.

Candelora’s caucus called last week for a new state income tax deduction for households with children, and for a modest reduction in the payroll tax that supports the paid Family and Medical Leave program.

Transportation program debt

The fiscal guardrails have helped state government since 2017 to amass a $3.3 billion rainy day fund and pay down an extra $7.7 billion in pension debt.

But Lamont also has been accused of accumulating too many surplus dollars when it comes to the budget’s $2.1 billion Special Transportation Fund.

This subset of the state budget fund is on pace to close $241 million or 11% in surplus when the fiscal year ends June 30, according to Lamont’s budget office.

And it finished the 2022-23 fiscal year with a 15% surplus, equal to $277 million, according to final numbers from the state comptroller’s office. And that was despite a 13-month gasoline tax holiday that returned about $330 million to motorists. Most of that cost, $240 million, occurred during the 2022-23 fiscal year.

The administration estimates the STF’s reserves — the fund that holds all its annual surpluses — will total $911 million after this fiscal year, a tally that exceeds more than 42% of the entire STF.

The transportation fund is supported by two fuel taxes, a portion of the sales tax and a recently added highway mileage levy on commercial trucks.

Republicans have accused the Democratic governor of hoarding too much revenue and urged him to repeal the highway mileage tax.

Construction industries and trades have urged Lamont and the state Department of Transportation to launch more capital projects. The STF funds DOT operations and pays the debt service on the annual state borrowing that, coupled with federal grants, finances repairs to Connecticut’s highways, bridges and rail lines.

Lamont’s budget does assume annual borrowing for capital work will grow from $875 million this fiscal year to $1 billion in 2024-25.

But he also would take $500 million from the STF reserve and use it to reduce Connecticut’s more than $7.4 billion in outstanding transportation bonding debt.

With more than $80 billion in unfunded pension and retiree health care benefits and bonded debt combined, Connecticut is one of the most indebted states, on a per capita basis, in the nation.

The administration estimates that wiping out this much bonded debt at once will reduce debt service costs by $26 million next fiscal year and by roughly $60 million in 2025-26.

“This proposal builds on Connecticut’s recent budgetary successes by leveraging our current financial position to pay down transportation debt now and generate years of savings,” said state Treasurer Erick Russell, who crafted the debt reduction plan in cooperation with the Lamont administration. “This plan will strengthen the [transportation] fund and leave the state well-positioned to take on transportation projects essential to our economic growth and the quality of life of our residents.”

Lamont’s budget also assumes Connecticut will borrow $1 billion for transportation capital projects next fiscal year, a major jump from the $875 million in financing estimated this year.

But the administration has dangled higher investments before and not delivered.

This fiscal year, for example, it also projected $1 billion in borrowing, but that projection has since gone down by $125 million.

The administration projected $1.2 billion in 2022-23 and borrowed $830 million; and projected $875 million the year before that — and borrowed $500 million.

Connecticut issued an annual average of $725 million in transportation bonds between 2015 and 2018 under Gov. Dannel P. Malloy, according to debt reports from the state treasurer’s office. During Lamont’s first term, the annual average ticked upward just 2.6%, reaching an average of $744 million — even though STF revenues grew 22% over those four years.

But the third year has just begun on a five-year federal program to invest $1.2 trillion in the state’s transportation projects, and construction industries and trades both said Wednesday that Lamont can’t afford to wait any longer to get significantly more projects underway.

“Everyone knows infrastructure investments are the highest return on investments,” said Don Shubert, president of the Connecticut Construction Industry Association, who added the state should be borrowing and investing closer to $1.5 billion annually in transportation projects. “And failing to maximize all available federal funding and failing to invest at this point is a tremendous, missed opportunity for the state.”

Nate Brown, president of International Union of Operating Engineers, Local 478, said hitting the $1 billion borrowing target isn’t sufficient.

“We have to exceed the target,” he said. “We have the opportunity of a lifetime. There’s people and contractors who are more than ready to go.”

Travis Woodward, president of CSEA-SEIU Local 2001 and a supervising engineer with the state DOT, said the department has too many vacancies in engineering and other key professional posts. “We desperately need to hire before the next retirement wave hits,” he said.

Battling NY for tax dollars

Lamont’s new budget doesn’t include any major tax cuts — which was expected given the huge reductions he and the legislature approved in each of the past two sessions.

Low- and middle-income households are expected to save about $460 million next fiscal year from the largest income tax cut in state history. The changes, approved last year, include both rate reductions and several enhanced credits.

The governor did recommend about $3.5 million in fee reductions, removing initial application fees in understaffed fields including nurses, teachers and child care workers.

But the administration hopes to bolster the state’s coffers by as much as $200 million annually in future years, by challenging controversial “Convenience of the Employer” rules in New York state.

Connecticut officials argue that New York rules unfairly require many Connecticut residents who work remotely from home for New York-based employers to pay taxes to the Empire State.

Lamont is urging residents to challenge the New York rules in court. Those that are successful and receive a refund from New York would then owe taxes to Connecticut.

Lamont proposes to add a 50% income tax credit to those challengers and to waive any penalties Connecticut could claim against them.

A spokeswoman for N.Y. Gov. Kathy Hochul could not be reached for comment Wednesday morning.

Federal COVID relief

Lamont’s proposal also hinges on repurposing $55.7 million in unspent federal COVID-relief grants, which provide great fiscal flexibility because they can be spent outside of the cap system. But the shifting of these American Rescue Plan Act funds is expected to spark many questions from legislators, specifically: How much money have state agencies that received federal grants left unspent?

All states must designate how these funds will be used and must spend them by Dec. 31. Any entity hired by a state with ARPA dollars can spend them as late as Dec. 31, 2026.

Legislators also are expected to press Lamont over how much of this fiscal year’s surplus can be used to support the next state budget. Even though the governor recommended boosting the planned “carryforward” from $95 million to $140 million, his fellow Democrats in the House and Senate majorities have suggested using between $200 million and $300 million to support numerous initiatives in health care, social services and education.

Lamont also may face criticism for sweeping more than $16 million from a program that shares a portion of state sales tax receipts with cities and towns. The administration says this transfer would not impact municipal grants in the upcoming fiscal year, but it was not clear Wednesday whether that could trigger challenges a few years down the road.

Other changes

Lamont also proposed folding the Connecticut Port Authority into the Connecticut Airport Authority, consolidating the management of the state’s harbors and aviation facilities under one umbrella. 

David Kooris, the current chairman of the Connecticut Port Authority, mentioned the potential merger between the two quasi-public agencies during a meeting last fall, but little has been mentioned publicly about the plan since then.

The Port Authority has been an issue for the Lamont administration for years, largely because of the escalating cost of the redevelopment of the State Pier in New London. That project, which is now reaching completion, is meant to transform the port facility into a launching pad for offshore wind projects in the Atlantic. But the cost of the project ballooned from an estimated $93 million to more than $300 million. 

The Lamont administration also proposed restructuring payments into the pension plan for state judges to save $14.3 million next fiscal year. Connecticut restructured payments into the state employees’ pension in 2017 and 2019 and contributions to the teachers’ pension in 2019.

The governor would make several small adjustments to economic development initiatives, including an additional $1 million for the state tourism office’s marketing efforts. That additional support could generate an estimated $389 million in local spending by visitors to the state, according to the proposal.

The budget adds $280,000 to expand labor department efforts to coordinate more apprenticeships and $100,000 to create a career center within the state’s technical school system, to be situated at Vinal Technical High School in Middletown. And it maintains the current level of funding for various job training programs including the Office of Workforce Strategy, the Building Trades Training Proram and the Manufacturing Pipeline Initiative. 

The CT Youth Employment Program – which expected $10 million last year, but received only $5 million after late-stage negotiations among lawmakers – will not see its budget increase under Lamont’s proposal this year.

Original article found at CT Mirror.