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Lamont: 'I don’t think we need any new taxes right now'


On Wednesday, Gov. Ned Lamont met via a Zoom conference to discuss fiscal policy issues with the publishers and editors of Connecticut’s major newspapers, including The Day. He said he would not sign a budget with big tax increases, as has been proposed by progressive, Democratic lawmakers. And he predicted the State Pier project in New London would cost less than the $235 million estimate. 

Here are some highlights from that hour-long discussion. Also commenting was Melissa McCaw, secretary of the Office of Policy and Management.

Question: Do you support imposing a digital tax, aimed at major social media companies such as Facebook and Google, given the potential that costs could be passed down to small and mid-sized companies?

Lamont: Before we had the income tax we depended on a corporate income tax that produced 20 to 25 percent of our revenue. And, obviously, it is now down to 5 or 6 percent. The reason is that big profitable companies that do business in our state don’t necessarily have a nexus here, and that includes Google and Facebook.

That is in part what is behind the type of (digital) tax that the legislature is considering. But if it looks like this is a tax that is somehow going to impact small businesses and businesses here in Connecticut — because you’re already paying your corporate income tax and paying the cost of doing business here in Connecticut — then I wouldn’t want to do anything that raises that.

I don’t think we need any new taxes right now but I understand what the legislature is trying to do there.

Q: What are your thoughts on the push, by progressives in the Democratic Party, to increase taxes on the wealthy and corporations, given the potential for those increases to be passed down to consumers and small businesses and inhibit an economic recovery?

Lamont: I’m the guy who doesn’t want to raise taxes. Sometimes that feels a little lonely in this building because we have a long-term habit of doing it (raising taxes). I don’t think we need to raise taxes. We have had a budget surplus two years in a row. We are putting close to a billion dollars into the pension fund this year. On top of that we have another $250 million in surplus, and the largest rainy-day fund in history, plus the additional (federal) revenues we need to make the investments necessary to make sure no one is left behind in this economy.

Q: But would you veto a budget that comes across your desk with new and increased taxes in it?

Lamont: If there are broad-based tax increases like the sales tax and the income tax and such, I would not sign that budget. You don’t need that money. I’ve got $6 billion of federal money. It gives us a chance to be one of the laboratories of democracy, trying some really important things. And if they achieve their goals and make a difference, then we’ll fund them going forward with the federal government.

Q: Why not require COVID vaccines for kids returning to school?

Lamont: I want to do everything I can to encourage people to get vaccinated. We’ve done pretty well, we’re over 70 percent. As for a mandate…I am going to do everything I can through encouragement and see if I can get to 80 to 90 percent of the people vaccinated on a voluntary basis. And if we find we are not getting there, we will have to reconsider.

Q: When you say you will not sign a budget with broad-based tax increases, can you better define that?

Lamont: Roughly speaking, I am thinking about the sales tax, income tax, those taxes that are imposed on the broad majority of Connecticut people.

Q: Do you support the bill creating a state-provided public option in health insurance coverage?

Lamont: The taxpayers end up on the hook for everything where we’re told it is going to pay for itself, then it never quite pays for itself and who ends up picking up the tab? So, I really worry that with this (proposed) pubic option it is the taxpayers who are going to end up picking up a lot of that risk. I’m not going to allow that to happen. If Anthem or Cigna want to manage this and take the investment risk, take the health risk, just like they do now in some sort of preferred network, that doesn’t upset me — that might be a good thing.

And the other thing, is you have to have a level playing field. The public option would play by one set of rules…everyone else would play by a different set of rules. I think those two things (exposing taxpayers to risk and an uneven playing field) would be deal breakers for me.

Q: Why your reluctance to raise taxes and make major state investments to meet social needs? Doesn’t that contrast with the progressive agenda of President Biden — who you endorsed early on for president — and with progressives in your own party who want to tax the wealthy more and use that money to provide more opportunities for people in inner cities and communities of color?

Lamont: I like what Biden is doing. I like that he is seizing the moment. I like the fact that he is making investments that can be transformational over a long period of time, like the rescue plan, like the infrastructure, like how we are able to bolster our day care.

So, thanks to him, and thanks to the federal government and thanks to the rescue plan, we have the most progressive budget this state has ever had. A lot of people are upset at not using state money to do it. Instead, my approach is really focused on the $6 billion we are getting in federal money. But that was part of the plan. That is part of why I supported Biden. I think it is better if the federal government does this rather than Connecticut getting into tax wars and competition with our neighboring states.

I don’t want to raise taxes just to raise taxes and punish people. If you don’t think we’re making the right decisions for the $6 billion in federal money, come to us. We gave the legislature a very clear proposal.

Melissa McCaw, secretary of the Office of Policy and Management: (That federal funding includes) $2.8 billion for state fiscal relief, $1.6 billion at the local level, a billion dollars in additional school funding, $300 million in childcare. We have the resources to make meaningful investments.

Q: The new cost estimate for the State Pier redevelopment project, and preparing its use to support offshore wind-power development, is now $235 million. Can you provide assurances the cost won’t keep rising and do you still consider it to be a sound investment?

Lamont: I still see it as a sound investment. It will come in as less than that number.

OPM Secretary McCaw: And if I could add, for clarification, that this number is now based on final design documents. This is not a cost overrun, this is an updated cost estimate based on final design and a lot of those packages are coming in below cost, so we feel really good about this. It is putting Connecticut on the map in another strong way and will reap a significant return.



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