Originally published on the Hartford Courant website
Gov. Ned Lamont released his new, two-year state budget Wednesday, a plan that seeks to close $1 billion deficits in each of the two upcoming years through a combination of state budget reserves, federal aid and targeted new revenue sources like legal marijuana and sports betting while avoiding significant tax hikes or spending cuts.
Lamont’s prerecorded budget address was broadcast beginning at noon followed by a briefing with his budget director. Here are some of the highlights:
No broad tax increases
Even before releasing his budget, Lamont had repeatedly said he did not plan to include any significant tax increases, a theme he touched on several times during the address.
“I’ve always said, we don’t need more taxes, we need more taxpayers,” Lamont said.
The budget does, however, delay some previously enacted tax cuts, including for retired teachers.
“Such policies are currently unaffordable and if allowed to proceed, would necessitate raising other taxes or cutting services in order to accommodate their implementation,” according to budget documents.
Legal Marijuana
Lamont made a direct appeal for the legalization of recreational marijuana in his budget address, saying lawmakers should not let other states in the region continue to reap the benefits of legal and regulated cannabis sales.
“Our neighboring states are offering recreational marijuana on a legal and regulated basis,” he said. “Massachusetts dispensaries are advertising extensively here in Connecticut. And, rather than surrender this market to out-of-staters, or worse, to the unregulated underground market, our budget provides for the legalization of recreational marijuana.”
Legislation submitted by Lamont calls for legal marijuana sales beginning in May 2022. Tax revenue in the first year of sales is estimated at $33.6 million, growing to $97 million in three years. Half of the money raised by an excise tax on marijuana sales (an estimated $26.8 million in the 2026 fiscal year) would be set aside for municipal aid to cities.
Sports Betting and Online Gambling
Lamont is hopeful he will be able to reach a deal with the tribal operators of the Foxwoods and Mohegan Sun casinos to offer sports betting and online gambling in Connecticut for the first time. Long-running talks with the tribes have centered around whether they would have exclusive rights to the new forms of gambling or whether other operators like the Connecticut Lottery Corp. or Sportech, which operates off-track betting in Connecticut, would be allowed to participate.
“Our neighboring states are moving forward with sports betting and i-gaming, and Connecticut should not leave these opportunities for other states to benefit from our inaction,” the governor said during Wednesday’s budget speech. “My administration has been in active negotiations with our tribal partners to bring the state’s gaming economy into the digital age. And I am submitting legislation which reflects what I believe to be the best bet in ending this stalemate of inaction in a way which is in the best interest for the entire state.”
Lamont’s team expects to raise $47.3 million in the second year of the budget from expanded gambling.
New Fees on Tractor-Trailers
After legislators balked at Lamont’s proposal for electronic highway tolls, he has proposed new mileage fees on tractor-trailers as part of his budget to help shore up the state’s special transportation fund, which is in danger of going bankrupt without new revenue.
“The mileage fee would raise $90 million annually and apply only to those larger heavy-weight trucks, which can cause the vast majority of the damage to our highways,” Lamont said in his budget address. “Mayor Pete, our new transportation secretary, as well as top Republicans in Washington, support this approach to funding transportation investments. And this funding allows Connecticut to leverage for $1 billion worth of projects over the next five years.”
Broadband Expansion
Throughout the pandemic Lamont has frequently talked about the importance of access to high-speed internet with more individuals working and learning from home. He also sees it as a selling point to get people to relocate to Connecticut if their job offers the ability to telecommute.
“If you can do everything ... from Brooklyn, Connecticut, that you can from Brooklyn, New York, you’re going to have a lot more young families, a lot more vibrancy,” Lamont said last month. “You don’t have to be in that big city five days a week.”
During his budget address Lamont said he would be sending a bill to lawmakers to expand broadband access “for those communities large and small which have been left behind in the digital revolution.” That legislation would require cable companies to build out broadband infrastructure in unserved areas with a goal of having universal access to gigabit internet by 2027.
The budget includes $2.85 million in new funding each year to help state agencies that will oversee broadband expansion efforts.
Ban on Flavored Vaping Products
Tucked into Lamont’s budget is a ban on flavored vaping products that is expected to result in a decline in cigarette tax revenue of $4.4 million over two years. The move comes as lawmakers on the legislature’s public health committee are debating a bill that would ban sales of all flavored tobacco products — including menthol cigarettes.
The conservative Yankee Institute think tank took offense to the inclusion of the ban, with President Carol Platt Liebau saying in a written statement that it “will damage an industry with small business locations throughout Connecticut.”
Russell Blair can be reached at rblair@courant.com.