Courtesy of Brian M. O’Connor, Connecticut House Democratic Office

Connecticut is better off than it was when he first took office, Governor Ned Lamont told legislators on Wednesday.

Lamont addressed the state on the first day of the 2022 Connecticut Legislative session in his annual “State of the State” address. In the speech, he unveiled his vision for the state in the coming years and called for adjustments in the biennial state budget.

Lamont spoke on a wide range of issues, including the state’s COVID-19 response, proposed tax cuts for the middle class, the state’s business climate, planned improvements in infrastructure, future education enhancements, increased public safety measures, funding and healthcare accessibility.

“Today, the state of the state is better off than it was three years ago, but we still have a long way to go,” said Lamont, who is in the third year of his first term as governor. “This year, my budget cuts taxes for working and middle-class families. We’re also holding down the costs of healthcare, childcare and college tuition, making Connecticut more affordable for everyone.”

Kevin Kelly, the Connecticut State Senate minority leader, told the News in an email statement that he was “disappointed” by Lamont’s budget, viewing many of the proposals in it as “election-year politicking” during a time when “most average Americans are living paycheck to paycheck.

An economy that draws people in

Lamont told the legislature that he is calling on the state to use its $2 billion surplus from the last three years to cut taxes for middle and low-income families, while also increasing investment in different parts of the state’s economy.

When Lamont took office, the state had a $3.7 billion deficit and was standing at the “edge of a fiscal cliff,” but in his three years in office the budget has been balanced, he said. According to Representative Sean Scanlon, House Chairman of the Finance Committee, the basis for this surplus was the 2017 volatility cap which helped stabilize tax collection in the state.

The state has also fully funded its rainy day reserves, according to Lamont, which means the state would be less likely to need to cut services or raise taxes should a recession hit Connecticut’s economy.

Lamont’s budget proposal calls for a hike in the property tax deduction from the current $200 to $300, while expanding eligibility for the property tax credit. The governor told Connecticut residents that the new expansion would double the number of families who receive the credit.

“Our working families and middle-class households deserve a break, especially from Connecticut’s most regressive tax,” Lamont said. “This year I’m proposing meaningful property tax reform worth nearly $300 million dollars. The current property tax credit is too limited, so we’re going to double the number of families who can claim it…plus an additional tax cut for working families worth up to $1,200 a year.”

Currently, only families with dependents or people above the age of 65 can take the property tax deduction; however, with the proposed changes anyone who has a joint income below $130,000 or sole income of $109,000 will be able to claim this deduction.

Moreover, Scanlon is proposing to create a Child Tax Credit in the state to replace the expiration of the national American Rescue Plan child tax credit. The credit will be $600 for each child and will be applicable for the first three children a family has. Joint filers who make less than $200,000 and single filers who make less than $100,000 will be eligible for the cut.

State Republicans are critical of this approach and are instead calling for cuts to the state’s 6.35 percent sales tax.

“Senate Republicans have called for immediate tax relief,” said Kelly. “By cutting the sales tax [we can] address the struggles families are facing every day in the wake of historic inflation. Governor Lamont’s budget may offer tax credits in the future, which Republicans have always supported, but it does not provide immediate tax relief now when people are struggling most.”

In response to this claim, Scanlon told the News that a “credit is a tax cut.”

Lamont also touted the recent passage of paid family and medical programs in the state through the Paid Family Leave Insurance Authority. The new benefits include 12 weeks of benefits over a 12 month period — an increase from the previous standard whereby workers received 16 weeks of leave over a 24 month period.

Another priority that Lamont hopes the state will focus on in the coming year is attracting families, while ensuring that residents who went to different states for their college education return for work. He also hopes to encourage students who study in Connecticut colleges, whether in-state or out-of-state students, to remain in-state as workers post-graduation.

“I want students and trainees to take a job in Connecticut,” said Lamont. “To encourage that, we’re expanding a tax credit for small businesses that help repay their employees’ student loans. More reasons for your business to hire in Connecticut and for graduates to stay in Connecticut — that’s the Connecticut difference.”

Lamont also touted that “28 major employers” including HP, which had originally left the state in 2017, had moved to the state. According to Jeffrey Sonnenfeld, senior associate dean for leadership studies of the Yale School of Management, one of the reasons Lamont ran for governor was to help buoy the state’s economic development following the decision of companies like GE to leave.

Build Back better infrastructure improvements

Lamont plans to make New Haven’s Union Station the state’s “central transportation hub,” promising that from this year on there will be express one-hour trains from New Haven to New York City. Lamont also heralded New Haven’s Tweed Airport, where Avelo airlines continues to invest in the airport as its East Coast hub.

The state hopes to increase investment in clean wind energy while revitalizing ports. Moreover, Lamont announced that the state’s grid would soon be carbon-free and that the transportation system would follow suit. The budget adjustments for this year also provide for hundreds of electric charging stations to encourage Nutmeggers to transition to all-electric vehicles.

“We are making the biggest investments in our roads and bridges, in generations, certainly since Ike — and I like Ike —,” said Lamont. “[These changes will allow] us to speed up our commutes, decongest our choke points, strengthen our Eisenhower-era bridges and give you another reason to call Connecticut home.”

The state’s infrastructure plans also include the expansion of broadband to rural and urban areas “cut off by the digital divide.”

Two years of pandemic experience

Thanking state residents for the authority and trust they put in him, Lamont told the state that Connecticut had one of the best vaccination rates in the nation and that the state had been able to weather the Omicron surge.

Lamont has asked the state legislature to weigh in on the last emergency executive orders and has recently announced the end of the statewide mask mandate. The Connecticut legislature plans to vote on the end of the statewide mask mandate later this week and early next week.

“We had been faced with a huge deficit and a global pandemic that uprooted all of us,” said Lieutenant Governor Susan Bysiewicz. “Our governor, since that time, has been just a strong leader in managing our public health and safety and keeping our economy open.”

Regarding healthcare, Lamont declared that “health insurance should not be a deterrent for those young entrepreneurs with a dollar and a dream.”

Touting Covered Connecticut, a healthcare program that last year’s budget created, Lamont told the state that 40,000 more state residents had received health care and subsidies.

“Subsidies help, but we must address the underlying cost of health care,” Lamont said. “That’s why I’m proposing legislation to make prices more transparent, safely re-import lower-cost prescription drugs from Canada and cap run-away prices on prescription drugs here at home.”

Public safety efforts increase

While Lamont pointed out that the state is one of the safest in the country, he also believes that the “COVID-19 hell” has led to a surge in some crimes.

Because of this, he is calling for the investment of hundreds of millions of dollars in “education, workforce development and mental health.” He is also calling for the expansion of the controversial Project Longevity program in cities like New Haven which try to increase dialogue between police and community members in cities. This is on the heels of New Haven’s highest murder rate since 2011.

Lamont also spoke about increasing police presence across the state.
“I want more cops on the beat,” said Lamont. “Our ten largest cities and towns alone are training and hiring nearly 400 new cops in the next two years. We’ve made sure they have the budget to do it. As I have done with our state police, they are adding more female recruits and creating a more diverse police force. Community policing that is of, by and for the communities they serve.”

Lamont is calling on the state to work to lower the number of illegal guns in the state. His budget proposes a “special illegal gun unit” which, in concert with neighboring states, will work to track down big gun traffickers. He also called on the state legislature to quickly confirm his judicial nominees, while also supporting his calls for increases in funding for prosecutors and public defenders.

Republicans criticize tax credits and the sidestep of state budget cap provisions

According to Kelly, the state lags behind the rest of the nation in recovering jobs lost during the pandemic. Kelly criticized Lamont for playing a “high stakes shell game” because Lamont has proposed a “10 percent spending increase,” which totals almost $2 billion. Kelly argued that these increases were leading to an abandonment of the “very protections that turned our state’s financial health around.”

“Governor Lamont’s proposed budget adjustments, laid out in his 2022 State of the State address, fall short,” said Kelly. “The Governor’s proposed $336 million in mostly tax credits do not even begin to scratch the surface to undo the nearly $2 billion in tax increases approved by Connecticut Democrats since Gov. Lamont was first elected. The Governor is engaging in typical election year politics, promising eventual tax relief and increasing spending with no concern for the pain it will cause taxpayers in the future.”

In response, Scanlon told the News that the state has a $2 billion dollar surplus and the tax credits the Democrats are proposing are “responsible” and necessary.

However, Kelly did applaud Lamont for identifying priorities “that are in line with policies Senate Republicans are advocating for.” Kelly added that he wishes to work with Lamont on priorities like fighting fentanyl, improving access to mental health care and addressing healthcare accessibility.

The Connecticut State Assembly sits in Hartford, Connecticut.