Connecticut Budget Debate Heats Up Quickly Over Equity
Urban Democratic lawmakers attacked Gov. Ned Lamont’s new budget proposal Thursday, charging the two-year package does little to nothing to reverse long-standing gaps in education, health care and economic opportunity.During a two-hour hearing with Lamont’s budget director, the governor’s fellow Democrats on the Appropriations Committee also questioned whether the $46 billion biennial package sets Connecticut up for another budget crisis after the next state election.
“I am so disappointed in this budget when it comes to human services,” said Rep. Cathy Abercrombie, D-Meriden. “Again, here we are, balancing a budget on the backs of our most vulnerable.”
And in a parting comment, Abercrombie warned the Executive Branch to prepare for intense legislative scrutiny.
“I hope your commissioners are ready for the subcommittee hearings,” she told Office of Policy and Management Secretary Melissa McCaw. “I am appalled by this.”
“What I’m seeing in this budget does not look like equity,” said Sen. Gary Winfield, D-New Haven, who added that Connecticut cannot expect to combat systemic injustice without investing more in core services — and that requires raising more revenue.
Lamont insists Connecticut can’t afford any major tax hikes right now, especially given all of the damage caused by the coronavirus pandemic. Analysts say state finances, unless adjusted, would run more than $2.5 billion in deficit over the next two fiscal years combined.
But many in the governor’s party say Connecticut’s wealthy have fared well since the COVID-19 outbreak began, citing a robust stock market that has driven up state income tax receipts tied to capital gains and dividends.
The governor, a wealthy Greenwich businessman, says that raising state taxes on Connecticut’s rich only would prompt them to flee the state. Wealth redistribution should be done, Lamont adds, through federal taxation, so states aren’t forced to compete with each other.
The governor already is on record opposing two state tax redistribution proposals from Senate President Pro Tem Martin M. Looney, D-New Haven. Looney introduced bills that would increase the state income tax rates on the capital gains on Connecticut’s top filers and also establish a statewide property tax — but only on houses with market values in excess of about $430,000.
The governor’s budget does boost both education and general government aid to cities and towns over the next two years, but it relies chiefly on federal pandemic relief grants and some state borrowing to do so.
At the same time, the administration’s budget suspends for two years an ongoing effort to increase Connecticut’s chief grant program for local schools.
It also leaves in political limbo an initiative to share hundreds of millions of sales tax receipts with cities and towns. That program — which was supposed to pump more than $300 million annually into local coffers — has delivered less than $40 million since 2018.
Progressive Democrats also were disappointed when Lamont’s budget did not increase rates for nonprofit social services or fund an expansion of Medicaid program eligibility standards. The administration also proposed an asset test for one Medicaid program that helps low-income seniors cover expenses not picked up by Medicare.
Sen. Douglas McCrory, D-Hartford, told McCaw he was “embarrassed” that the governor proposed taxing the sale of cannabis for recreational use — and that the bulk of revenues from this venture remain in the state budget. Under Lamont’s plan, $33 million would be generated for Connecticut’s General Fund by 2023 and $6 million for municipalities.
McCrory has insisted that legislation taxing cannabis sales not only expunge the criminal records of most of those convicted of cannabis-related offenses but also channel those resources into urban centers — where many of the marijuana-related convictions occurred.
McCrory, who warned in January that “Frosty the Snowman would have a better chance of passing summer school in hell” than a cannabis bill lacking these features passing in the Senate, told McCaw Thursday that, “I don’t see anything in your budget that is intentional … to serve those who are impacted the most.”
McCaw took issue, though, saying the administration is investing more than $230 million in federal pandemic relief in affordable housing and rent relief. Additional investments were made in social service agencies to reflect higher caseloads, if not to raise rates.
Connecticut still has the most generous Medicaid eligibility standards of any state, she added, and the proposed asset test is more lenient than similar ones in 38 other states.
“I’m not going to sit here as an OPM secretary — and as the first African American OPM secretary — and take shots that the Black woman did not invest in equity,” she said, adding the governor proposed more investments in health care and education through the state’s bond package. “This is about a frank discussion.”
But while McCaw said different policymakers may have different visions of how equity is achieved, Rep. Antonio Felipe, D-Bridgeport, questioned how much sustainable progress toward education equity the governor’s budget would actually make.
For example, Felipe said, local school districts would receive an extra $220 million in federal relief both next fiscal year and in 2022-23 under the governor’s plan. But what happens when that temporary money expires two years from now?
And in the meantime, the state’s Education Cost Sharing grant program for local districts does not continue on its regular growth plan under the governor’s proposal.
But McCaw urged Felipe not to look too far down the road.
The administration is focused now on reviving an economy that still has about 200,000 Connecticut residents receiving weekly unemployment benefits.
Using emergency federal relief to bolster school aid in a public health crisis is one thing, McCaw said, but using state dollars to expand existing programs while faced with a major budget deficit is another.
“It’s like saying ‘I’m going to use my savings to cover my mortgage,’” she added, “’but I’m going to go get another house.’”