Connecticut’s gross domestic product grew by 7.7% in the fourth quarter of 2021, a fact trumpeted Thursday by Gov. Ned Lamont, whose reelection campaign is framed around the state’s newfound fiscal stability.
Lamont highlighted the release of the GDP estimate by the Bureau of Economic Analysis after presiding over a meeting in which the Bond Commission briskly approved the borrowing of $666.9 million for state and local projects.
Half the funding approved will go to transportation infrastructure maintenance and improvements. A little more than 20% will pay for a long bipartisan list of priorities set by lawmakers for projects in their districts.
“The good news is I think the state has momentum. Our economy is growing and continuing to grow,” Lamont said. “That allows us to make some of the investments in the Bond Commission in a way that will make a big difference in the state.”
The first-term Democratic governor offered a note of caution absent from his first campaign ad now on the air, noting economic growth has come slowly. His ad ends with the line, “Our state is strong and getting stronger.”
Lamont noted economic growth has come slowly, but it is real nonetheless
“This is a state that did not grow as fast as we should for the last three years. But we are right now — 12 highest in the country,” Lamont said, referring to the fourth quarter growth.
The preliminary annual GDP estimates, also released Thursday, showed Connecticut with 4.5% growth in 2021 over 2020.
Lamont readily acknowledged that long-term challenges remain, despite the economic growth and budget surpluses.
“In the near term, we’re doing very well,” Lamont said. “GDP is up, the wind is to our back, a third year of surplus. We’ve been able to pay down billions of dollars in pension obligations.”
The state still has a massive unfunded pension liability, and fiscal analysts warn that the surpluses of today could turn into a nearly billion-dollar deficit by the 2024 fiscal year.
“Look, I’m not putting up the ‘mission accomplished’ banner, because as everybody knows, over the last 40 years or so, we accumulated an awful lot of debt,” Lamont said. “That was pension debt, health care debt and bonding debt. And while we’re beginning to bend the curve, as they would say in COVID days, we still have a way to go.”
Every New England state except Rhode Island and Maine outperformed the 6.9% growth in national GDP in the fourth quarter, the BEA reported Thursday. Results for the first quarter of 2022 will come in June.
The Bond Commission met in person at the Legislative Office Building for the first time since COVID-19 forced much of government to meet remotely, also allowing a resumption of the governor’s traditional post-meeting news conference in the atrium of the LOB.
Rep. Holly Cheeseman, R-East Lyme, who sits on the Bond Commission as the ranking House Republican on the Finance, Revenue and Bonding Committee, complimented Lamont for returning to in-person meetings.
“I think it’s a really important move and helps generate confidence in what we’re doing,” she said.
While the legislature authorizes bonding for specific projects, the money is not formally allocated until a vote by the 10-member Bond Commission, whose agenda is set by the governor’s office. It includes four lawmakers, two Democrats and Republicans in key posts on the finance committee.
All but one of 25 agenda items passed unanimously, a reflection of bipartisan support for the projects to be funded, a mix of state transportation projects and smaller items of intense local interest — most, if not all, sought by one or more lawmakers.
A single agenda item provided $120 million in funding for five dozen urban aid projects, including renovations to theaters and museums such as the Wadsworth Atheneum in Hartford, the Klein Memorial in Bridgeport and the Palace Theater in Stamford.
The Beardsley Zoo in Bridgeport is getting $4.1 million to renovate a tiger exhibit, move a condor exhibit and make other improvements.
The package has $200,000 for a skating rink in New Canaan, $3 million for high school athletic fields in West Hartford, $250,000 for a kindergarten playscape in Stamford, $2 million for a backup generator at RHAM High School in Hebron and $4.3 million for a firehouse in Hamden.
There also is money to help develop housing, spur downtown development and improve pedestrian and driving safety.
“It’s a pleasure to be here today to vote on all these worthy projects,” Cheeseman said.
The only item not getting unanimous support was $10 million to provide low-interest loans to social equity applicants seeking a license to open a cannabis shop. It passed on an 8-2 vote, with Cheeseman and Sen. Henri Martin, R-Bristol, opposed.
Cheeseman said she objected to both the process to be used to issue social equity licenses, as well the notion of legalized sale of cannabis.