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    Friday, March 01, 2024

    Lamont sets right tone for second term

    The big surpluses Connecticut state government has accumulated over the past couple of years are a tempting target.

    After a decade of perpetual budget crises, often leaving it with little or no reserves, Connecticut now has a $3.3 billion budget reserve equal to 15% of the general fund, the maximum allowed by law. The state directed nearly $6 billion in additional surplus money toward paying pension debt, making a significant dent in improving a pension program the legislature had underfunded for decades.

    Connecticut continues to live within its fiscal means, with a $2.8 billion surplus projected for this fiscal year, which ends June 30.

    So why not sharply cut tax rates? And boost the ranks of a state workforce that shrank throughout the past decade? And direct increased state aid for education and various social programs?

    Well, because doing too much of any of that, and not doing it smartly, could quickly return Connecticut to the bad old days. The surpluses could fade as quickly as they appeared. What the legislature giveth, it may soon decide it has to taketh back.

    Given the importance of not squandering the fiscal gains, it was reassuring to hear Gov. Ned Lamont, in his State of the State Address Wednesday, signal his commitment to maintaining the budgetary reforms that made those impressive gains possible.

    “In 2017, the legislature put in place the fiscal guardrails that have allowed us to honestly balance four budgets in a row, and thank you for that,” Lamont said after being sworn-in for a second term. “Thanks to our collective efforts, the era of Connecticut’s permanent fiscal crisis is over. It’s over as long as we maintain the same fiscal discipline that served us so well over the last four years.”

    This does not mean Connecticut cannot afford to cut taxes. It can. It should. The governor called for tax relief, with details to follow.

    “After many years of unfilled promises, now is the time to enact a meaningful middle-class tax cut. That’s a reduction in tax rates,” Lamont said.

    Keeping the fiscal guardrails in place does not mean money cannot be found to mend the fabric of the social safety net where needed.

    It does mean that any tax cuts or expansion in government spending must be done within the restrictions set by the 2017 reforms, passed in the year before Lamont won his first election as governor. Those reforms included volatility and spending caps that sought to prevent — so far effectively — the boom and bust budget cycles Connecticut experienced depending on whether investment income soared or crashed due to financial market phases.

    Lamont reminded the legislature that the best social program is a job, the best chance to escape poverty is education, training and opportunity, and that Connecticut cannot subsidize its way to a better economy.

    “The next four years should focus more on recovery, less on rescue, less need for lifelines, and more focus on ladders. Keep our economy growing, making sure that growth means a ladder to opportunity for everyone regardless of background or zip code,” said the governor.

    “You’ve heard me say it before, ‘I don’t want more taxes, I want more taxpayers.’ More taxpayers will guarantee a bigger economic pie that lets us keep up the progress in progressive. The next generation in Connecticut is all about opportunity, and that opportunity starts with economic growth,” he said. “Fiscal stability is the foundation to inclusive growth.”

    We agree.

    Also important to note was the governor’s recognition that a major impediment to “affordability and economic growth (in Connecticut) is housing, or the lack thereof.”

    Connecticut needs to expand housing, and affordable housing in particular.

    The challenge is great the solutions complex and often controversial. But it begins by acknowledging the problem and committing to addressing it. Lamont did so.

    The Day editorial board meets with political, business and community leaders to formulate editorial viewpoints. It is composed of President and Publisher Timothy Dwyer, Executive Editor Izaskun E. Larraneta, Owen Poole, copy editor, and Lisa McGinley, retired deputy managing editor. The board operates independently from The Day newsroom.

    Comment threads are monitored for 48 hours after publication and then closed.