- Governor Ned Lamont proposes two-year, $46 billion state budget for Connecticut
- Measures include legalized marijuana, mileage tax on truckers, gaming expansion, and climate initiatives to generate revenue
- Lamont sees growing economy, federal aid, or drawing on rainy day fund to offset anticipated deficit
Describing Connecticut as “one of the best positioned states in the country” on managing its budget and addressing the COVID-19 pandemic, Governor Ned Lamont outlined his budget priorities for the next two years on Wednesday.
Lamont said his two-year, $46 billion budget is anchored in five priorities: defeating COVID-19, improving affordability in Connecticut, modernizing its state government, investing in infrastructure improvements, and supporting equitable economic growth.
Lamont praised the state’s residents for their response to the pandemic, saying that they have “[taken] public health precautions seriously” and as a result Connecticut has been able to maintain a low infection rate without imposing new business restrictions. The state has been in Phase 2.1 of its reopening plan since November, permitting most businesses to continue operations with limited capacities and health safety measures.
While the previous two-year budget resulted in surpluses in each year, Connecticut is forecasted to run a deficit in the next two years. Lamont says this projected deficit has been reduced to under $1 billion, and the gap could be closed by an improving economy, state and local aid from the federal government, or a partial drawdown from Connecticut’s $3.5 billion rainy day fund.
To generate new revenues and find efficiencies, Lamont is seeking the legalization of recreational marijuana use and sales, a mileage tax on tractor trailers, sports and online gaming, and partnerships with neighboring states on economic and climate initiatives.
The budget provides for the legalization of recreational marijuana, which is estimated to generate $30 million for the fiscal year beginning in July 2022. Lamont said Connecticut residents have been courted by Massachusetts dispensaries after recreational marijuana sales began in that state in 2018, and this action will help regulate the sale of marijuana and keep revenues in Connecticut.
The budget proposes that half of these revenues be dedicated to payment in lieu of taxes payments, with a 3 percent local excise tax option. Lamont is also seeking to automatically erase the criminal records of any residents with marijuana-related drug possession, convictions, and charges.
Lamont is pursuing a mileage-based fee on heavy tractor trailers, saying this would apply to the vehicles that cause the most wear and tear on Connecticut roads. The fee would generate $90 million a year and allow Connecticut to leverage an estimated $1 billion in infrastructure projects over five years. Similar measures have been put in place in New York and Oregon. The trucking industry has criticized the proposal, saying it would create an extra burden on Connecticut drivers while out-of-state truckers would likely be able to avoid it.
The budget proposal includes another anticipated $80 million from joining the Transportation Climate Initiative. This measure would require large gasoline and diesel suppliers to purchase allowances to account for pollution caused by fuels sold in Connecticut, Massachusetts, and Rhode Island. The initiative is predicted to reduce greenhouse gas emissions by 26 percent between 2022 and 2032 while generating $3 billion in revenues.
Lamont is also planning to support legislation pursuing sports betting and online gambling in Connecticut, seek investments in transportation and broadband infrastructure, and reduce the state’s reliance on coal and trash-to-energy power plants. In workforce development, Lamont plans to work with community colleges as well as state colleges and universities to build on certification programs for skilled workers in fields such as advanced manufacturing, coding, construction, nursing, and digital media.
Lamont is pledging to commit $100 million to 25 distressed cities and town in Connecticut to help them meet budget challenges created by revenue shortfalls during the pandemic. The budget also includes an increase in PILOT funds.
