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Lawmaker Admits State Worker Pension Debt is a “Fiscal Albatross”

In an op-ed published on Friday (Dec. 1), Rep. Josh Elliott (D-Hamden) correctly characterized the state’s unfunded pension obligations as the “primary fiscal albatross around Connecticut’s neck”; but he contends that the fiscal guardrails implemented to address the problem are a “cure worse than the disease.” 

The guardrails — or “handcuffs” as Elliot calls them —  consist of the spending cap, the revenue cap and volatility cap. 

Since its implementation in 1991, the spending cap limited growth in state spending from one year to the next. Concurrently, the state personal income tax was enacted to prevent legislators from runaway spending with their new source of revenue. However, Elliott says, “We have been anchored to that limit with marginal yearly increases since.”  

He adds that “costs don’t necessarily follow the metric that the spending cap does” and that the cap makes it hard to fund the core functions of the government “let alone enactment of new programs.” 

Crafted with the intent of preventing legislators from creating budgets with little room for fiscal error, the revenue cap presently constrains annual appropriations to 98.75% of revenue. 

The volatility cap establishes a limit for certain types of unpredictable revenue sources, such as the income tax, which can experience fluctuations from year to year. Any surplus from these revenue streams is required to be allocated to the rainy-day fund or towards addressing the state’s underfunded pensions for teachers and state employees. 

As the state works on digging itself out of its financial hole, Elliott believes these guardrails are being done on the “backs of the working poor and the middle class,” and that the “fiscal constraints are excuses for not doing the right thing.” 

Elliott suggests looking at Connecticut’s tax laws to reduce the state’s dependence on property taxes and shift towards a greater reliance income tax. This involves raising taxes on the state’s top earners. Additionally, he implies that the existing fiscal safeguards are inequitable, suggesting that it is unjust “for the current generation to be fully on the hook for multiple generations of irresponsibility.” 

But this opinion is nothing new for Elliot. In May, he announced the formation of the Tax Equity Caucus, aiming to redistribute state and municipal tax burdens. The caucus contends that the singular focus on mounting debt leaves individuals facing financial challenges, particularly given the escalating costs of housing, childcare and basic essentials. 

Yet his Democratic colleague, Speaker of the House Matt Ritter (D-Hartford) — a key figure in establishing the fiscal guardrails — expressed a different perspective. According to Ritter, the guardrails are crucial to what he views as positive fiscal transformation in Connecticut, emphasizing that the fiscal discipline has proven beneficial for the state. 

Nevertheless, eliminating the fiscal guardrails will jeopardize the current favorable financial trends experienced in the state. Reverting back to reckless spending and disregarding fiscal discipline will have adverse financial consequences for the state. 

Surprise! Gas Car Ban Not Going Anywhere and of Course the State Will Need More Revenue 

In a press conference on Tuesday (Nov.28), Gov. Ned Lamont, alongside agency and legislative leaders, reinforced their commitment to a regulation aiming to ban the sale of gas cars in the state by 2035 — and it will cost taxpayers. The announcement came only a day after the governor decided to pull the plug on the regulation because the Legislative Regulation Review Committee (LRRC) was poised to reject it. 

Gov. Lamont and Democrat leaders in both the House and Senate signaled that the regulation will be under consideration in the General Assembly during the 2024 session, which begins on February 7. House Speaker Matt Ritter (D-Hartford) emphasized that the General Assembly must address genuine concerns regarding affordability of electric vehicles (EVs) and the challenges of setting up the infrastructure to make the transition from gas-powered vehicles feasible. 

Senate President Pro-Tempore Martin Looney (D-New Haven) said, “We are going to need a significant state investment in infrastructure to implement where we hope to be by 2035.” He highlighted that, “we are going to have to put a lot more state money into building charging stations in areas of the state.”  

Sen. Looney went on to hint that taxes will increase to pay for this regulation: “The state is going to have to spend a lot of money on that. The state is also going to have to spend more money in terms of giving tax breaks for the foreseeable future for people who buy electric vehicles. So that has to be factored into our revenue structure. We will need, of course, additional revenue.” 

After weeks of asserting that the regulation is not a ban on gas-powered vehicles, lawmakers have now openly acknowledged that it is, indeed, a ban. Sen. Christine Cohen (D-Guilford) clarified, “We adopted California emission standards, and as such, they have banned the combustible engine by 2035, so our regulatory framework needs to be in line with those emission standards.” 

Cohen further stated that there is “no plan to do away with the ban.” 

Speaker Ritter said his members plan to meet on Monday to deliberate potential legislation addressing concerns surrounding the regulations. 

Gas Car Ban in NJ? State Senator says, Fuggedaboutit! 

A day after Gov. Ned Lamont announced he was pulling the plug on banning gas cars, New Jersey Senate Deputy Majority Leader Paul Sarlo (D-Wood-Ridge) told a crowd at the New Jersey Business & Industry Associations’ annual Public Policy Forum on Tuesday (Nov. 28) that banning gas cars by 2035 is not feasible. 

“I know everybody in this room fully understands the need to invest in green energy and move in that direction — I don’t think anybody here is opposed to that,” Sarlo said. “However, to be practical about it, 2035 is not happening.” 

Echoing similar challenges faced by Connecticut regarding the proposed ban, Sarlo emphasized that the Garden State lacks the charging infrastructure, and its power grid is not equipped to handle the additional load. He also added that car manufacturers lack the capacity to produce the number of cars needed to replace the gas cars consumers will no longer be able to purchase. 

Sarlo conveyed to the audience that implementing such a policy would require a significant sum of federal funding. And a lot of it. He also remarked that the New Jersey Department of Environmental Protection “thought this was a great idea to get a great headline, but it’s not practical and we know that.” 

This Week on Yankee’s Podcast Y CT Matters

Video evidence of multiple people dumping votes into absentee ballot dropboxes in Bridgeport ignited controversy, a trial, and a new mayoral primary. But the perpetrators have not faced direct charges. So a group of city residents have filed a lawsuit on Nov. 21 demanding them to be arrested for ballot fraud. Cameron Atkinson, a criminal defense and civil rights attorney, is leading the suit on behalf of Fight Voter Fraud, Inc., a Connecticut-based “non-profit, non-partisan” group created to “advocate on behalf of all disenfranchised voters, regardless of party affiliation.” He provides insight into the suit and the upcoming primary, as well as protecting the voting process. Learn more in Connecticut Inside Investigator’s coverage, here.

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Meghan Portfolio

Meghan worked in the private sector for two decades in various roles in management, sales, and project management. She was an intern on a presidential campaign and field organizer in a governor’s race. Meghan, a Connecticut native, joined Yankee Institute in 2019 as the Development Manager. After two years with Yankee, she has moved into the policy space as Yankee’s Manager of Research and Analysis. When she isn’t keeping up with local and current news, she enjoys running–having completed seven marathons–and reading her way through Modern Library’s 100 Best Novels.

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