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Lamont’s new $46 billion budget focuses on defeating COVID

February 10, 2021 GMT

HARTFORD, Conn. (AP) — Defeating COVID-19 tops the priority list for Connecticut Gov. Ned Lamont, who unveiled a new two-year, $46 billion state budget on Wednesday.

The plan includes using state and federal funds to keep rolling out testing and vaccinations, provide interim rate increases for nursing homes, and give financial support for health care providers, all while keeping schools open.

In a 25-minute virtual message to the General Assembly and the general public, the Democrat explained bluntly why crushing the virus still remains the No. 1 issue: “Because if we don’t, nothing else matters,” he said.

Lamont’s proposed budget predicts it could take several more months before there is widespread accessibility to vaccines and herd immunity in Connecticut. That means pandemic-related expenses, as well as lagging state revenues, could stretch beyond the current year.

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“COVID-19 continues to throw wild cards into the deck, but the federal government is getting much closer to deciding how it will support our state and local municipalities,” Lamont said in his address. “Connecticut will have to remain agile in meeting these changing circumstances, but that being said, I would not change our hand with any other state in the country.”

Yet some Republican and Democratic legislators believe industries and groups impacted by the pandemic don’t receive enough attention in Lamont’s budget.

House Minority Leader Vincent Candelora, R-North Branford, said “Main Street businesses,” including restaurants, are still struggling because of restrictions and need more help. Also, he said local health districts need more funding to administer vaccines and public schools must address an achievement gap that he said has widened.

“We have had children that have been learning in isolation for an entire year,” said Candelora, who called Lamont’s budget mediocre. “We need planning and that planning needs to start now for summer school, for programs to try to get these kids caught up.”

Meanwhile, Sen. Cathy Osten, D-Sprague, co-chair of the General Assembly’s Appropriations Committee, said she was concerned Lamont’s budget doesn’t increase funding for nonprofit agencies, which have complained for years about underfunding by the state and have seen an uptick in clients and increased costs during the pandemic.

The Connecticut Community Nonprofit Alliance has called for increasing state funding by $461 million over the next five years for the agencies that provide state services ranging from prison reentry programs to domestic violence shelters.

“Without providing them with that funding, it’s clear that some of them will fail,” Osten said.

Despite the criticism, Lamont said Connecticut is currently “one of the best-positioned states in the country,” noting the steps his administration has taken to mitigate the spread of COVID-19 and how the state has “begun to find its economic footing.” Recent projections show Connecticut may end the current fiscal year with a small budget surplus. The state also still has more than $3 billion in its budget reserves.

Lamont acknowledged the state’s budget is still “burdened” with high fixed costs, including large pension liabilities. Also, while the budget plan closes a nearly $4 billion two-year budget gap in fiscal years 2022 and 2023, there are still deficits projected in the following two-year budget.

However, the Democrat said there are no broad-based tax increases or changes to income or sales tax rates in his budget proposal, despite calls from some politically progressive Democrats to impose higher personal income taxes and a 5% capital gains surcharge on high-earners and other tax changes to generate $3 billion. They say it’s needed to address long-standing economic disparities and provide immediate virus-related relief, including stimulus payments to people who have lost their jobs during the pandemic.

“This is an emergency that requires bold leadership. A timid response will just mean this crisis lasts even longer. And the working people of this state will suffer longer as a result,” said Sal Luciano, president of the Connecticut AFL-CIO, criticizing Lamont’s proposal for not focusing more on food insecurity and the thousands of who have lost health care coverage and employment.

The governor is hoping that the state’s economy will continue to improve and the Biden administration and Congress will ultimately approve “unrestricted aid to the states” to help cover the drop-off in revenues that’s because of the pandemic. The budget plan assumes Connecticut will receive $1.75 billion, money the state would spend over two years. If the federal funds don’t materialize, Lamont has recommended partially drawing down the state’s budget reserves.

Lamont is receiving pushback for at least one new revenue-generating proposal. He wants to create a mileage-based “highway use” tax on tractor-trailers, where the weight of the trucks determines the rate paid. The initiative is modeled after programs in New York and Oregon and is projected to generate $90 million annually to help shore up the state’s financially troubled transportation fund.

Joe Sculley, president of the Motor Transport Association of Connecticut, called the proposal “disheartening, but not surprising,” noting the governor’s previous, unsuccessful truck-only tolls plan.

“The Connecticut trucking industry pays $301 million annually in state and federal road taxes. This proposal will specifically tax in-state businesses, while out-of-state trucks will simply evade this new tax,” Sculley said. “Rather than targeting the industry, the governor should simply thank truckers for their role in surviving the pandemic, and leave us alone.”

Lamont’s budget also assumes the state will finally legalize sports betting and internet gambling, even though the governor has not yet reached an agreement with the state’s two federally recognized tribes who contend they have exclusive rights to offer such gambling. Also, the governor has proposed legalizing the recreational use of marijuana for adults, suggesting some of the money from pot would benefit distressed communities. Bills addressing both issues have failed to clear the General Assembly in past sessions.