Emphasizing a need for collective bargaining and compromise, Connecticut Governor Ned Lamont presented his first budget proposal to the General Assembly Wednesday. It comes as the state’s new fiscal year beginning July 1 is projected to be $1.5 billion dollars in the red, while fiscal year 2021 is expected to have a $2.2 billion dollar deficit.
The Democrat presented his $43.2 billion, two-year budget proposal as more of a “budget-in-progress.” While past budgets have sparked bitter debate and negotiation in Hartford, Lamont expressed a desire for what he calls a “Connecticut Moment,” where lawmakers could come together and compromise.
“Let’s try a different type of politics, and let’s not wait for the summer to do it," Lamont said. "If you hate my proposal today, don’t wait ‘till June to tell me what to do. Let’s sit down tomorrow and get to ‘yes’ sooner rather than later.”
The governor proposed stretching out payments to teachers’ and state pensions, among other changes that would require permission from unions and the Teachers Retirement Board. Lamont also floated two options for tolling on the state’s highways: one affecting only trucks, and another applying to all vehicles. Lamont opposed any plan that would apply to all drivers during his campaign, but he was more receptive this time around – pending a discount for E-Z Pass holders and frequent drivers.
“And by the way, it is estimated that over 40 percent of tolling revenue would come from out-of-staters. We foot the bill when we drive through their neighboring states, it’s time for those out-of-state drivers to help foot the bill for fixing our roads and bridges," said Lamont.
The governor’s proposal does not include an increase in Connecticut’s income or sales taxes. But it would expand the sales tax to include digital goods and consumer-oriented services.
“Our current sales tax is designed for a Sears-Roebuck economy, driven by over-the-counter sales. Today we live in an Amazon economy, which is driven by e-commerce, digital downloads, consumer services," said Lamont. "For example, movie theatres charge a tax – why shouldn’t Netflix be treated the same?”
State Senate Republican leader Len Fasano says he can’t embrace taxes and tolls.
Also Wednesday, Secretary Melissa McCaw of the Office of Policy and Management foresaw such opposition.
“This would include legal accounting, personal services, dry cleaning – these are tough decisions, but the governor feels very strongly that it is time for us to level the playing field," said McCaw. "And so he is putting forth a bold proposal.”
The budget would also place a 10-cent surcharge on plastic bags, and a 25-cent deposit on wine and liquor bottles. The plan revives attempts to tax sugary drinks, this time at 1.5 cents per ounce, and taxes nicotine liquids for e-cigarettes at 75 percent of the wholesale price. McCaw says the measures are just a start to encourage healthy behavior.
“We are proposing to be the first state in the country to raise the age to 21 for electronic cigarettes and tobacco products," announced McCaw. "This results in a revenue loss, [but] the governor feels very strongly about setting the tone and for Connecticut to be a leader in this regard.”
Also in the proposal are paid family leave and “significant investments” to digitize government operations. Not on the table? Significant bond authorizations. While the state has authorized bonds on an average of $1.6 billion a year since 2012, Lamont’s plan shaves that to just under $1 billion, placing the state on what he calls a “debt diet.” While lawmakers may agree with the diet in principle, Lamont admits some will feel differently when it affects funding for their own local projects.
“So be forewarned: if it’s not tied to workforce and economic development, or cost-saving shared services, Connecticut is on a debt diet and I’m gonna make sure we stick to that plan," Lamont assured.
Lamont also used the proposal to start conversation on issues like sports betting and legalizing marijuana, without specifics.
“Politics in Washington D.C. right now is a dysfunctional mess," said Lamont. "Let’s show that here in Connecticut we can work together on an honest budget, on time – one that gets the state moving again. And when we disagree, you don’t go to the microphone – come to my office, let’s talk, the door is open. Let’s get it done.”
Full details from the governor's budget proposal can be found here.