Lamont faces months of deliberation over his budget plan
HARTFORD (AP) — Let the deliberations begin.
The release of Connecticut Gov. Ned Lamont's first proposed two-year state budget has set the stage for months of negotiations on potentially hot-button topics, ranging from what goods and services should be taxed to whether cities and towns should pick up part of the tab for teacher pensions.
While the Democrat released detailed proposals in some instances, such as a long list of things that could soon be taxed at 6.35 percent, he skipped over some major issues, leaving it up to the General Assembly to decide how best to proceed. For example, there's nothing in Lamont's plan concerning a possible statewide car tax he supported during the campaign, or the potential legalization of sports and online gambling, or recreational marijuana.
"The governor feels there are ongoing discussions with respect to the legalizing of marijuana. He'd like to continue to have those discussions with leaders," said Melissa McCaw, Lamont's budget director.
A former businessman, Lamont has hinted that he's more collaborative than his predecessor, former Democratic Gov. Dannel P. Malloy, and doesn't expect the daunting task of crafting a new $43 billion two-year budget that covers a projected two-year $3.7 billion deficit will be a top-down process.
"I can't fix this chronically broken budget without each and every one you," Lamont said during his budget address Wednesday. "The legislature is a co-equal branch of government, and I need you at the table."
Lamont and the legislature face a June 5 deadline. Here are highlights of some key, unresolved budget issues they need to tackle:
TO TAX OR NOT TO TAX
Lamont's list of goods and services that should not be exempted from Connecticut's sales tax has sparked criticism, especially from Republicans. The state GOP has already created a social media hash tag: #NewTaxNed.
Given such public opposition, coupled with pushback from the affected industries, it's unclear how successful Lamont will be in his effort to "modernize" the sales tax system. Similar efforts by past governors have fizzled. And various groups, such as the Connecticut Society of Certified Public Accountants, have already registered their displeasure with Lamont's proposal.
"The notion of taxing tax preparation services is fundamentally flawed," said Bonnie Stewart, the organization's executive director.
Besides the sales tax changes, Lamont proposed a 10-cent surcharge for plastic bags; a 1.5-cent per ounce tax on sugar-sweetened beverages; a 25-cent deposit on wine and liquor glass bottles; and a 5-cent deposit for nips.
Democratic House Speaker Joe Aresimowitz urged people to "take a deep breath" and "work through the process" before dismissing Lamont's ideas out of hand.
TOLLING TRUCKS, CARS OR BOTH
Lamont campaigned on tolling only big trucks to generate about $200 million in transportation revenue. But his budget offered lawmakers two options: toll just trucks or toll cars and trucks, a move he predicts will deliver about $800 million annually.
"I've got a different relationship with the legislature than maybe they are used to in the past," he said. "I really want them at the table involved in what we are trying to do."
However, the governor has made it clear he prefers the second option, arguing truck-only tolls would not generate enough money for the state's long-term transportation needs, especially if a court case in Rhode Island limits the tolls to bridges under construction. If lawmakers have alternative ideas, he said, he is open to hearing them.
HOSPITAL TAX CONTINUES
Lamont finds himself in the same battle with Connecticut hospitals as Malloy.
His budget scraps plans to drop a $900 million-a-year state tax to $384 million, arguing the state can't afford the cut. Jennifer Jackson, CEO of the Connecticut Hospital Association, said her members strongly oppose Lamont's plan.
"The current administration is not honoring the bipartisan agreement for this year or the next year, and the budget makes additional cuts to hospitals," she said. "We continue to be willing partners to find a sustainable solution, but this is not it."
The hospitals filed a lawsuit against the state in 2016 challenging the constitutionality of the tax. That suit is still pending.
Lamont is also facing pushback from municipal groups who oppose his plan requiring cities and towns to cover part of the cost of teacher pensions, even though the proposal is less drastic than one offered by Malloy.
"Requiring towns to pick up millions of dollars in teachers' pension costs without giving towns any opportunity to manage these costs going forward is simply unfair," said Betsy Gara, executive director of the Connecticut Council of Small Towns. The proposal is part of Lamont's multi-pronged approach to stabilizing the underfunded teacher retirement plan.
Lamont must also reach an agreement with unionized state employees about his proposed pension changes, such as requiring cost of living adjustments to meet market returns and removing mileage reimbursements from pension calculations. Sal Luciano, president of the Connecticut AFL-CIO labor umbrella group, said he was disappointed Lamont broke a campaign promise not to seek further givebacks from state employees while not asking the wealthy to pay higher income taxes.
"Instead of cutting retirement benefits, we hope the Governor will consider finding smart ways to balance the budget," Luciano said in a written statement.
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