(The Center Square) — Connecticut Gov. Ned Lamont is calling for changes to his two-year budget that includes wiping out $500 million in bond debt while making key investments in childcare and education.
Lamont’s $26.1 billion proposal, unveiled on Wednesday, would boost spending by 3.1% over the state’s spending level, adding $89 million to the fiscal year 2024-25 budget, adopted last June. Much of the new spending is devoted to a proposed $80 million increase in the required state contributions to state retirement funds.
The plan doesn’t include any tax increases and keeps the expenditures under the state’s cap on spending.
Lamont also calls for repurposing $500 million from the state’s Special Transportation Fund reserve to reduce transportation bond debt as part of a broader plan to whittle down the state’s outstanding financial obligations.
“Paying down our debts and a robust rainy day fund doesn’t short change our programs, it has resulted in six years of consistent increases in our key social programs, rather than the herky jerky boom and bust cycles of yesteryear,” Lamont said in remarks on Wednesday.
But the spending plan is facing strong headwinds from Democrats, who control the state Assembly and Senate and want to increase spending by $300 million to $400 million over his proposed adjustment.
On Thursday, Lamont’s budget chief was peppered with questions from members of the General Assembly’s Appropriations Committee, who criticized the plan for a lack of new spending on higher education and homelessness, as well as plans to spend $56 million in pandemic relief money.
For one, Lamont’s budget update calls for flat funding for public colleges and universities, which critics say will mean potential deficits and program and service cuts.
“I’m kind of stunned and disappointed,” state Rep. Gregg Haddad, D-Mansfield, said in remarks on Thursday, citing rising tuition rates and spending cuts at the University of Connecticut in his district. “We have a crisis. And this administration has no plan to address that concern.”
Lamont’s budget plan also calls for repurposing $56 million in unspent federal American Rescue Plan Act grants, which is also catching heat from lawmakers over how the money will be spent.
Republicans, calling for tax cuts as part of the budget adjustment, caution Democrats to keep spending within the state’s fiscal guardrails. Some Democrats have talked about tweaking the law to squeeze in more spending.
“The fiscal guardrails are working,” the House GOP caucus posted on its Facebook page. “Democrats, always eager to spend more, will flush these important financial controls the first chance they get. Given the budgetary turmoil our state has experienced over the last 15 years, it’s clear that these strict measures should be protected.”
Last year, Lamont signed a $51 billion, two-year state budget that includes the “largest” income tax cut in state history.
As he seeks approval for updates to the spending plan, Lamont is touting the tax relief as a sign that Connecticut is shaking off its high tax reputation and emerging from the COVID-19 pandemic in a strong fiscal position. He argues that’s making the state attractive.
“Unlike our neighboring states which are losing population, Connecticut has gained population over the last few years,” he said in Wednesday’s remarks. “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.”
