Lamont Defends Guardrails; Calls Spending Cap ‘Sacrosanct’

by Jamil Ragland CTNewsJunkie

HARTFORD, CT – Gov. Ned Lamont defended the state’s fiscal guardrails before a crowd of hundreds at the Economic Outlook Summit, hosted by the Connecticut Business and Industry Association (CBIA) Wednesday morning, calling the spending cap “sacrosanct” and saying that the guardrails are key to the state’s financial success.

The sold-out event began with opening remarks by Chris DiPentima, president and CEO of the CBIA. He asked that lawmakers focus on making the state more attractive to current residents so that they stay, and attract workers from Connecticut’s neighbors.

“Our overarching message to policymakers this session is a very simple one,” he said. “Everything you do, every bill you review, must be done so with this lens: will it make Connecticut more affordable? Will it lower the cost of living in our state?”

DiPentima pointed to a series of statistics that he said could be challenges for the state going forward. He said that the state’s job growth of 0.6% over the last 12 months was the 46th best in the country, but that the state’s status of having the third oldest workforce did leave room for more job growth as people retire.

He set the stage for the governor to speak by praising the fiscal guardrails.

“The impact in a very short period of time of these guardrails is truly tremendous,” he said. “Financially, as well as the positive energy momentum that’s brought to our state, consider this an additional $7.7 billion was paid into the state employee retirement fund from 2020 to 2023, $7.7 billion, with funding ratios now at two-decade high for that retirement fund, and payments that will save taxpayers $18 billion over the next two decades.”

When Lamont took the stage, he began by outlining some of the unexpected disasters the state had overcome in the past year, including the devastating flooding that hit western Connecticut in August. He thanked the volunteers, banking community, and government workers who came together to respond quickly to the storm.

Transitioning to current challenges, Lamont said that the biggest driver of Connecticut’s high cost of living is electricity. And he said that the only way to deal with the cost of electricity is to reduce demand and expand supply, adding that he wants to focus more on nuclear power as a potential carbon-free option for the state.

“I guess the elephant in the room is always our official situation of where we are financially, and how we’re doing, and the guardrails as well,” Lamont said. “I think overall, I like where we are as a state right now. So I think the question is, what do we do going forward? What do you think about these guardrails? I’ll give you my broad philosophy on this.”

Lamont continued: “Number one is, I think the spending cap has worked. I think it’s sacrosanct. I think it’s really important. As I said before, it’s not a straight jacket. It goes up with income. So it allows us to spend more as we earn more, and I don’t want to play any games with that.”

Lamont also praised the bonding cap, saying that before the cap the state had engaged in a 40-year “bipartisan train wreck” of bonding out projects that would be paid by future generations. He also addressed the volatility cap, saying that it takes risk out of the state’s budget. He pointed to less fixed costs in the budget as a good thing, and said that the cap gives the state breathing room in the case of a recession.

The governor said that the fiscal constraints had been a boon for the state’s economy. 

“We’re going to have an argument in state government in this next budget cycle, not about cutting costs, but how much we increase costs,” he said. “And the reason we’re able to increase investments and spending is because we have a growing economy.”

The governor did take a moment during his address to thank the General Assembly for their help in keeping costs down.

“It’s not easy in the world of politics to save $10 billion, you know? It’s just not in our DNA, you know? It’s just – there’s money, let’s get it out the door. Let’s use it for tax cuts. Let’s use it for more spending, you know, whatever it might be,” Lamont said. “We’ve really worked together collaboratively over the last six years to be able to make a difference that really puts this state in a very different place. I’m looking forward to working with the legislature getting through this, but I really want to thank each and every one of you.”