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02/26/2019 12:49 PMOn Feb. 20, Governor Ned Lamont unveiled his first two-year state budget to the General Assembly. The budget, a proposed $43 billion, closes a projected multi-billion shortfall, broadens certain taxes, proposes shifting a portion of teacher pension costs onto towns, and lays the groundwork for tolls in future years.
The proposed budget does not increase the income tax and also eliminates the gift tax and proposes a roll back of the estate tax in future years. However, the budget includes a number of fee increases, an expansion of the sales tax, and “sin” taxes on items like vaping products, sugary drinks, and plastic bags. Notably, the governor did not include the legalization and taxation of retail marijuana in his budget proposal.
Other items of note in the budget proposal include possibly increasing the minimum age to purchase tobacco products from 18 to 21, preparing for a $15 state minimum wage by 2023, and a proposal for paid family and medical leave.
Regarding municipal aid, the budget looks to bump education grants by roughly $63 million over the two-year period, but also asks towns to start paying a portion of the teacher pension costs. Towns would be asked to pay what is known as the “normal cost” of the pension, which is what Connecticut should set aside each year to cover current teachers, and not the ballooning unfunded liability that resulted from decades of underfunding by the state legislature.
The total pension cost over two years to be spread across towns comes to about $71 million, but Lamont said the system would also have wealthier towns carry a large burden of the cost.
In Guilford
The budget proposal includes significant proposed cuts to Guilford’s state aid, particularly with the Education Cost Sharing (ECS) education grant. This year, Guilford received just over $2 million in the ECS grant, but the governor’s proposal would drop Guilford’s allocation down to $1,568,902 next year and then down to $983,156 the following year.
State Representative Sean Scanlon (D-98) said this is just the first step in the budget process and none of these numbers are set in stone.
“While Guilford did see a cut to our aid in his budget, I would remind people that we’ve seen cuts like this and frankly bigger [cuts] proposed in previous years and I’m proud that I’ve been able to reverse those cuts and will fight hard to do the same this year,” he said.
In addition, Guilford would be asked to pick up $166,052 of the teacher pension in the first year of the budget and $342,913 in the second year. Previously, then-governor Dannel Malloy had tried to push some of the teacher pension contribution onto towns without success, but this Lamont proposal has yet to receive as swift a rebuttal from the legislature.
“We need to crunch the numbers and learn what the actual impact to us would be, but the governor’s plan is a much more modest and gradual plan than has been proposed in the past and I look forward to having conversations with our local leaders and teachers about whether some form of cost sharing is something we can support,” Scanlon said.
State Representative Vincent Candelora (R-86) said there should be broader conversations about the teacher pension. However, he said the proposed cuts to education funding won’t help get the pension discussion going.
“I think the governor’s point about towns needing to have some skin in the game for teacher retirement is policy debate,” he said. “I think it’s a fair discussion to have to say, ‘How do we make sure that we are properly controlling our costs on the pensions?’…Hopefully this could spark the appropriate dialog, but given the cuts to education, I don’t believe there is any way we can have that dialog. It makes it a non-starter for communities.”
Now that the governor has made his budget proposal, the General Assembly can begin to build its budget in response. The legislature has to vote a budget by the close of session in early June.