Melissa McCaw, Gov. Ned Lamont's budget director, testified Wednesday before the legislature's Finance Committee.
Melissa McCaw, Gov. Ned Lamont’s budget director, testified Wednesday before the legislature’s Finance Committee.

Gov. Ned Lamont’s budget director, Melissa McCaw, ran the gantlet Wednesday as she discussed tolls and taxes with the legislature’s Finance, Revenue and Bonding Committee.

Republican legislators charged the new Democratic governor with straying too far from his campaign promises. 

McCaw countered that Lamont wants to end Connecticut’s cycle of deficits, and said legislators have a bad habit of promising programs and tax cuts in future years — with no plan for how to pay for them.

Lamont, who said during the campaign that he would support tolls only on trucks, not only offered an option last week to toll all vehicles, but also argued that the trucks-only option doesn’t work financially.

At the same time, he also proposed canceling nearly $270 million in vehicle sales tax receipts pledged to the transportation program over the next to years.

“How is the governor justifying that with what was passed at the polls?” asked Rep. Chris Davis of Ellington, ranking House Republican on the finance panel.

Davis was referring to a new constitutional amendment ratified by nearly 90 percent of voters last November that creates a legal “lockbox” to prevent transportation revenues from being used for other purposes.

Lamont’s recommendation to keep the car sales tax receipts in the General Fund is legally permissible. The lockbox rules wouldn’t apply to this sales tax transfer until July 1, when the new fiscal year begins.

But Davis also questioned whether this violates the spirit of the amendment, if not the letter of the law.

This proposal of the governor is “essentially making it meaningless, or certainly not achieving what was proposed and passed by the people of Connecticut,” he said.

Rep. Chris Davis, R-Ellington (file photo)

McCaw responded that unless the legislature acts, the state will face a budget deficit of $3.7 billion  over the next two fiscal years. And part of that problem, she added, was caused by prior legislatures promising transfers to the transportation program — with no plans to “backfill” the hole it creates in the General Fund.

“The legislature passes laws on a regular basis that make future promises,” she said, adding if there is no plan to pay for these promises and keep the budget balanced, the governor “finds that to be problematic.”

To avert the projected deficit, Lamont also wants to cancel dozens of sales tax exemptions. Connecticut has billions of dollars of sales tax exemptions on the books — a system long criticized by many on both sides of the political aisle as unfair.

Lamont “preferred not to pick winners and losers,” McCaw said, adding that a more equal sales tax base should strengthen Connecticut’s economy in the long run.

But Rep. Holly Cheeseman, R-East Lyme, balked at proposals to end the exemption for winter boat storage and repairs, predicting it would lead Connecticut boaters to Rhode Island next winter.

“The loser here seems to be the state of Connecticut and the individual boat owners,” Cheeseman said.

Sen. Henry Martin, R-Bristol (file photo)

Sen. Henri Martin, R-Bristol, objected to Lamont’s recommendation to suspend previously approved income tax cuts for seniors. This relief — enhanced exemptions on Social Security income, pensions and annuities — was enacted 16 months ago, but scheduled to take effect in 2019.

“It just seems counterproductive to the message we are trying to send to the general public, that we are trying to get our fiscal house in order and we don’t want you to leave the state of Connecticut,” Martin said.

Davis also questioned why Lamont didn’t follow through on a campaign pledge to reduce the state’s capital stock tax. Also known as the capital base component of the corporation tax, it is a tax on a business’s net worth or capital holdings.  Connecticut imposes the nation’s highest rate at 0.31 percent. 

But McCaw said closing the projected deficit simply took top priority. “I think that the challenge was … to solve the $3.7 billion gap,” she said. “There has to be a shared sacrifice.”

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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6 Comments

  1. Well Connecticut, you elected all Democrats. Reap what you sow.

    But ask yourself – why is it Democrats can only talk about raising taxes and not cutting expenses? This state literally is living paycheck-to-paycheck while the rest of the country is banking for retirement.

  2. More “shared sacrifice” while state workers get a 5% salary increase, seniors get taxed on more of their income, and regressive tolls to the working class kick in. How about some spending sacrifices in the budget for a change? Does all of the sacrifice have to involve tax increases?

    While these “shared sacrifices” may balance a budget, it will only continue to drive people and business out of the state. Lets see who’s left to share in the sacrifice when we’ve taxed and spent ourselves into newfound “prosperity.”

  3. Typical Democrat approach to solving budget woes – more taxes. No discussion of cutting spending. It is always – “this tax will fix our budget woes once and for all.” Remember when Weicker promised an income tax would solve Connecticut’s budget shortfall? LMAO! Now it is tolls and eliminating sales tax exemptions. Every penny added to the tax burden drives another middle class family out of the state.

  4. Time to “get woke” folks. Pretty much EVERY other state utilizes electronic tolls to help support well-maintained highways that are in far better shape than Connecticut’s. And states that rely less on income taxes accomplish that through the following mechanisms – a) VASTLY increased reliance on computer-based, automated interactions/transactions between individuals or businesses and government agencies, b) VERY expansive application of state sales tax, c) increased efficiencies via REGIONALIZATION (usually based on county boundaries), d) ability of counties, regional entities and municipalities to tack their OWN sales taxes onto state sales taxes, e) state arrangements with municipalities and regional government entities to serve as consumer and business points of contact for routine state business that genuinely requires “in-person” contact, and f) literally piling on taxes and fees upon taxes and fees on ALL utility bills.

    The money has to come from somewhere; the only real differences in this regard among the states is how they collect it. A buck’s a buck, and there’s no free lunch.

    1. We are already being taxed into oblivion without regard for any cuts in our budget. I’m awake and I’m leaving this tax and spend “utopia” as soon as I can. Enjoy.

    2. Tolls ARE taxes. Were this state run properly (since you are comparing us to “every” other state) I think the population would accept tolls just fine. However it is not well run.

      Connecticut
      already has the fourth highest tax burden in the nation, just behind New York, California and New Jersey. Connecticut leads
      the country in income tax collection at $2,279 per person. A just released Tax Foundation study found Connecticut’s
      property tax collections were the overall highest in the nation. As of January 2019 our tax on gasoline is the 7th highest in the nation. As a bonus – our state pensions are one of the worst funded in the nation, at an average of $10,300 owed per citizen.

      Connecticut, ranked as the sixth most expensive state to live in, already pays for it’s lunch AND dinner – it is just that us taxpayers don’t get to eat it.

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