Gov. Ned Lamont and fellow Democrats in the legislature’s majority are sparring once again over Connecticut’s credit card.
This time the battle pits transportation construction against smaller, community-based projects in legislators’ home districts.
And while neither side has declared an impasse, legislators likely won’t be ready to adopt a complete bond package for the latest budget cycle when they return to the Capitol in special session on Monday.
“No one is walking away from any discussion,” said Senate President Pro Tem Martin M. Looney, D-New Haven, who said a full bonding package “is still to be determined.”
“We were very close to an overall agreement in principle,” said House Speaker Joe Aresimowicz, D-Berlin, but the governor’s insistence on extra borrowing for transportation “kind of muddled up the works.”
While Connecticut will spend $21 billion this fiscal year and $22 billion in 2020-21 to operate state government, there’s a second key fiscal plan yet to be resolved.
The governor and legislature also must approve a two-year bonding plan that involves billions of dollars in borrowing for municipal school construction, transportation upgrades, economic development initiatives, state building maintenance, some municipal aid — and possibly for smaller projects in lawmakers’ districts.
That last item, though smaller than most of the others, often is the most controversial. These smaller projects can entail athletic fields and swimming pools, repairs to historic buildings and community centers, aid to nonprofit social services and youth programs and assistance for various other local programs.
Critics call this “pork-barrel” spending, noting that most funds go to Democrats’ home districts and are designed to keep the majority party in power. Supporters say the funds typically support important programs in cities and towns, many of which could not otherwise afford them.
And while Lamont hasn’t weighed in on the “pork-barrel” debate or criticized any specific project, the Democratic governor says he is trying to reverse borrowing habits that have gotten out of hand.
“We cannot squander our progress by repeating bad habits of the past,” Lamont’s budget director, Melissa McCaw said Thursday. “We are still negotiating in good faith with our colleagues in the legislature and are confident they too will prioritize the state’s long term fiscal stability on behalf of our residents and businesses that rely on us.”
Lamont proposed a “debt diet” in February and recommended that the legislature authorize slightly less than $1 billion per year in new general obligation bonding, two-thirds of what it issued, on average, between 2012 and 2019.
General obligation bonds are the principal means used to finance municipal school construction, college and university projects, state building upgrades — and smaller projects in legislators’ districts.
They’re repaid with income tax receipts and other revenues from the budget’s general fund. By comparison, Special Tax Obligation bonds, which are repaid primarily with fuel tax receipts, are the chief means of funding transportation projects.
The governor recently offered to accept as much as $1.3 billion per year in general obligation bonds — provided legislators would agree to dedicate $100 million of those funds to complement the transportation bonds dedicated to transportation.
But Looney said Democratic legislators want $1.3 billion in general obligation bonding for other priorities — school construction, colleges and universities, building maintenance, economic development and local projects.
In other words, if the governor wants $100 million in G.O bonds for transportation, then Democratic legislative leaders say the overall G.O bonding level should rise to $1.4 billion per year.
Lamont also has asked Democratic leaders to consider a new tolls proposal his administration is developing.
Rather than setting up electronic tolls on Interstates 84, 91 and 95 and the Merritt Parkway — as Lamont recommended earlier this spring — the new plan only would involve tolls at strategic locations, such as aging bridges in need of repair.
Looney and Aresimowicz said Democratic legislators are willing to consider this proposal, but still are awaiting more details from the administration, and that also is slowing bond package negotiations.
Looney and Aresimowicz added that legislators likely would be ready to vote on some bonding on Monday. A bill approving financing for municipal school construction is expected to be adopted.
Legislators will be at the Capitol on Monday for the constitutionally mandated special session to reconsider bills vetoed by the governor.
State government should only be providing critical services at this point. ALL OTHER investments need to go into programs to become a more competitive place for large employers. The most direct way to do this is by drastically cutting taxes on the middle class and reducing the cost of living so we can regain a competitive edge over NY and MA. Nothing else matters right now but these democrat “leaders” still don’t get it. Amazingly stupid to spend and borrow even more on Pork Projects when Moodys’ said that Connecticut’s debt — even when compared with surging tax revenues — is worse than almost all states except Illinois who seems to be slipping into insolvency.
Good points, Justin. It’s shameful how easily they do things that hurt the middle class. Lamont and his supporters insistence on tolls is a prime example. Those are regressive taxes that hurt middle and low income people the most. Regressive taxation is not a traditional Democratic principle.
One compromise for the Governor and legislators to consider: provide some bonding for local projects that legislators love, and offset that by requiring that towns and cities pay 90% of the cost of building new schools or rehabilitating old schools in their districts. It is common knowledge that in many communities, one of the principal arguments favoring construction of a new school is: “not a problem – the State is going to pay ‘X’ % of the cost! ”
A twist on this proposal could be that the State might pay a larger percent of construction or rehabilitation of schools that promoted multi-district mergers – but the State would still realize savings on new bonding – an essential part of getting a grip on State finances.