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Lamont's strong case for holding line on taxes

In a meeting with editors and publishers from newspapers across the state Thursday, Gov. Ned Lamont sent the clear message that he does not consider an increase in broad-based taxes to be justified or a good idea. If the legislature sends him a budget built on such tax increases, he won’t sign it.

By broad-based, Lamont said he means the primary revenue sources for state government — the income tax and sales tax.

He left himself some wiggle room. Lamont has, after all, signed off on the idea of legalizing cannabis for recreational use and allowing sports betting and casino gaming, in person and digitally. These would be taxed and generate substantial revenue. And Lamont’s two-year budget proposal includes a highway usage fee on large trucks that is based on the vehicle’s size and miles traveled. In other words, a tax. It would bring in $90 million annually, the administration estimates.

But Lamont’s approach would seem to rule out the hefty tax increases on the rich that his fellow Democrats in the progressive wing of the party have proposed, led by Senate President Pro Tempore Martin M. Looney (D-New Haven) and Senate Majority Leader Bob Duff (D-Norwalk). They would use the $1 billion in projected new revenue to create the Equitable Investment Fund, supporting social programs, educational initiatives, small-business loans, and job training programs in the state’s cities with the intent of lifting thousands out of poverty.

In this intra-party battle, Lamont has both the right approach and the political high ground.

There is no justification for demanding more of state taxpayers, at any income level, when Connecticut is receiving $2.8 billion in direct aid to state government through the federal American Rescue Plan; when it has a record-setting $3 billion budget reserve; and when the administration expects to end the fiscal year with an $800 million surplus.

“I don’t want to raise taxes just to raise taxes and punish people,” Lamont told the editors.

Tax increases could also prove to be self-defeating. With neighboring states, such as New York, boosting taxes, Connecticut could find itself at a competitive advantage. The best way to lift people out of poverty is to expand the economy and create jobs.

Lamont has vowed to direct federal resources to the types of programs that the progressives say they want to target with their Equitable Investment Fund. In his recommendations to the legislature for use of the federal funds, Lamont recommended investment in criminal justice reform, early childhood education and daycare, work-training programs, providing access to and helping students succeed in community college, and targeting small business support in distressed communities.

This approach is open to criticism that the governor wants to use a one-time revenue source to get programs started, with no assurance the financial means will be available to continue them. But Lamont makes a valid point that if these investments prove successful, then a case can be made to continue funding them with future federal and state dollars. It could well be what the 2022 election is about, nationally and in the state.

Politically, the progressive wing does not have the votes to override a Lamont veto if he stands firm in his opposition to broad-based tax increases. With his strong approval ratings, the governor will face no pressure to buckle.

“I’m the guy who doesn’t want to raise taxes,” said Lamont when peppered with questions about the various tax increases being debated in the legislature.

Politically, it’s great to be that guy. But, in this case, it also makes for sound policy.

 

The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Editorial Page Editor Paul Choiniere, Managing Editor Izaskun E. Larrañeta, staff writer Erica Moser and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.

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