In This Issue:

From Paddi's Desk

On The Marble

Municipal Roundup

Federal Focus

CT Agency Corner

This Day in CT History

This Week's News:

CT Health Care Cabinet appoints 21 to Connecticut AHEAD Advisory Committee

Critics, backers of CT’s budget ‘guardrails’ want transparent debate

Connecticut: A Strong State Requires Fiscal Balance

A couple weeks ago, we discussed Connecticut’s fiscal guardrails, a framework of spending and revenue constraints adopted in 2017 to stabilize state finances. These measures—comprising a volatility cap, revenue cap, and spending cap—have helped achieve budget surpluses and bolster a $3 billion rainy day fund. However, a recent debate challenges the future of these guardrails.



Since then, there has been a lot of discussion about the Connecticut Mirror opinion piece critiquing the state’s 2023 Tax Incidence Study, arguing it overstates the regression of Connecticut’s tax system. The unnamed author notes that higher-income residents contribute significantly, with the top 2.5% of filers shouldering 41% of income tax revenue. This underscores the progressive nature of Connecticut's tax system but also its vulnerability. Any policy changes driving these earners to tax-friendly states could destabilize Connecticut’s fiscal health.

Balancing Progressivity and Competitiveness

Connecticut’s income tax system, with rates between 2% and 6.99%, aims for equity. Yet, business organizations highlight the mobility of top earners, warning that further tax increases could prompt relocations to states like Florida or Texas.

Governor Ned Lamont has emphasized caution: “Connecticut’s financial stability hinges on thoughtful decision-making. Guardrails like those implemented in 2017 have brought us fiscal discipline and credibility.” Similarly, Republican Senate Leader Steve Harding has noted, “We must strike a balance—providing essential services without jeopardizing the recently improved financial backbone of our state.”

The Guardrails Debate

Legislators now face a pivotal decision: loosen fiscal constraints to increase funding for education, mental health services, and affordable housing, or retain them to safeguard economic stability. Proponents of change argue the state needs flexibility to address urgent needs, while critics caution against repeating past cycles of deficits and tax hikes. There are others who remind policy makers that opening the barn door is a dangerous action given Connecticut’s history with the slow but definitive “unringing of many bells of fiscal restraints.”

Lessons from 2017

Looking back to pre-2017, CT suffered a decline in tax revenue from the top100 filers causing significant budgetary constraints, highlighting the risks of over-reliance on a small group of taxpayers. This historical perspective underscores the importance of a stable and predictable tax environment.

At the time, William Buhler, a fiscal policy analyst, warned, “Connecticut’s wealthy taxpayers are highly mobile. Any perception of fiscal irresponsibility could prompt them to leave, taking their economic contributions with them.” Such economic contributions go beyond income and sales tax revenue and include thousands of employment opportunities, charitable sponsorships, support for community and civic events/programs, and service on local and state committees, commissions and advisory boards within both government and nonprofit organizations.

Striking the Right Balance

While loosening the guardrails could fund critical programs, it might also deter top earners by signaling a return to fiscal instability. Investments in education, infrastructure, and public safety are vital, but they must be balanced against fiscal discipline.

Republican House Leader Representative Vincent Candelora puts it succinctly: “We can’t afford to risk our recent progress. Connecticut is only as strong as its weakest link, and that includes both our social safety net and our financial foundation.”

As the Connecticut legislature and governor begin to navigate these troubled waters this session, let’s not forget the upcoming statewide elections in 2026. With both a veto proof House and Senate, the governor will have to carefully weave a workable consensus that sticks to his principles while building bipartisan collaboration and a balanced approach to providing solutions to Connecticut’s troubling social safety net.

Let the process begin. 

Advice for the New Year

The Capitol and Legislative Office Building certainly picked up in intensity after the holiday malaise burned away. Folks began the big charge towards the opening day of session on January 8th.

This column, for the rest of the year, will feature perspectives on the most notable topics in Hartford. Despite that, I thought for today it would be nice to share a segment from authors at the New York Times on their top phrases of advice going into 2025. Hope you enjoy this break from the Capitol news and look forward to working together this next year:

“If you focus on the error, you’ll continue to hurt. If you focus on the lesson, you’ll continue to grow.”

“Never be afraid to enter into a new venture but always be aware that you’re going to pay a dumb tax.”

“You can be the safe harbor or you can be the storm. But you can’t be both.”

“When someone says thank you, just say you’re welcome.”

“Never crouch with spurs on.”

“What other people think of you is none of your business.”

“Practice doesn’t make perfect. Practice makes permanent.”

“Raise the child you have, not the child you want.”

The town of Simsbury is exploring zoning changes to address its affordable housing shortfall, including easing regulations for in-law apartments, introducing smaller lot sizes in a new R-8 zone, streamlining workforce housing rules, and mandating that 15% of units in developments with 10 or more homes be set aside for lower-income earners. While planners aim to increase housing diversity and affordability without drastically altering the town's character, residents have raised concerns about the potential impact on neighborhood aesthetics, property values, and the lack of public input if hearings are eliminated. Critics argue that the proposed affordable housing requirements, especially for single-family developments, may hinder new projects due to unfeasible cost constraints. The proposals will undergo further review in January.

As we turn the page on 2024, many communities are focusing on what success looks like for them in the New Year. In Danbury, Mayor Roberto Alves has outlined priorities for 2025 focusing on the successful opening of the new Danbury High School West campus which includes staffing, utilities, and preparations. He also plans to launch a citywide road repaving initiative, funded by bonds approved by voters, aimed to be the most extensive paving effort in years. Alves highlighted renewable energy projects, particularly for the city’s largest electricity consumer, the Public Works facility, to reduce costs and generate revenue. He aims to complete delayed fiscal audits and encourage responsible growth to expand the grand list without burdening taxpayers.

In Brookfield, First Selectman Steve Dunn seeks to address environmental concerns about the proposed expansion of a natural gas compressor station, advocating instead for electric compressors. The town is also developing its Plan of Conservation and Development, incorporating resident input amid the development boom on Federal Road. Additionally, Brookfield is considering converting the former Center School into a community center. Meanwhile, New Milford Mayor Pete Bass prioritizes infrastructure projects, environmental safety, and mental health initiatives for youth. In Ridgefield, First Selectman Rudy Marconi focuses on constructing a public safety building, new school facilities, and possibly revising the town’s governance structure while forming a senior tax credit committee to support its aging population.

Connecticut Agencies and Federal Funding

In the state of Connecticut, our dependency on federal funding resources over the past few years has not been a secret. From COVID relief funds, grant resources from the federal government, to agency support, our state is heavily leveraged on influxes of federal money. We are entering a crossroads for Connecticut around federal spending and our state dependency on those dollars. With ARPA money now long gone, our focus has turned to the incoming budget proposal from the soon-to-be-inaugurated administration. Just about every one of our state agencies depends on some sort of federal injection of funds. The Trump Administration, specifically the Department of Government Efficiency (DOGE) working with the budget department in Washington DC, is being tasked with delivering a report to the president about how best to shrink federal spending. What does that mean for our state? Let’s take a look.

There will be certain grants and programs that make it through the next few years, specifically the Bipartisan Infrastructure Law and many of the programs our municipalities can depend upon, many of those funds were authorized for a few more years. Connecticut has benefited from this type of federal support and sometimes that support goes beyond municipalities and directly to our state agencies. Take the EPA grant our Department of Energy and Environmental Protection received a few months ago. Specifically $450 million, the second largest injection in the country, through the Climate Pollution Reduction Grants that picked a group of applicants led by Connecticut DEEP. On the Agriculture side, Connecticut’s Department of Agriculture has been a big beneficiary of federal support over the past few years. In August, Connecticut Department of Agriculture received over $400 thousand to disseminate through via US department of Agriculture. USDA, FEMA, DOT, HHS, you name the federal agency and you will find a deep connection between them and supporting our state agencies and staff., We are not saying this funding is going away, but all signs point to cuts ready to be proposed by the Trump Administration to federal agencies that support our state agencies. Next week, we enter a new legislative session in Connecticut with all eyes on our budget. Let’s not forget about the deep connections our state agencies (and their incoming state agency proposals) have with the federal government’s agency budgets. 

New year, new 2025 state agency legislative proposals? Not yet.

Agency proposals are a “wish list” of policy priorities they hope the legislature will take up on their behalf, typically released in the weeks leading up to the start of the legislative session. But with just five days to go until next session kicks off, the Office of Policy and Management (OPM) has yet to post a single one to their website. Having the proposals available in advance is helpful for a number of reasons:

1. It gives OPM time to review what they would like to support on behalf of the agencies;
2. It allows Committee Chairs time to digest how the agency proposals fit into their legislative agendas;
3. It gives OPM time to work with Committee Chairs to understand the budget implications tied to each agency proposal;
4. It gives industries time to determine if, and how, an agency proposal will impact their business.



The team here at S&L will keep refreshing OPM’s website, but we don’t expect to see these proposals until Wednesday morning. Once we know if a legislative proposal is tied to your area of interest, we’ll reach out to talk through next steps for engagement. 

December 31: Cutting-Edge Teamwork Turns A Starr Into a Star

As a major in the Continental Army, Nathan Starr forged and repaired weapons as part of his service during the Revolutionary War. After the war was over, Starr returned to his hometown of Middletown, Connecticut, and made a living manufacturing blades of a different sort: mostly agricultural tools like scythes for local farmers.

In 1798, however, Starr found himself once again forging tools of war, receiving the federal government’s first-ever contract for sword production. In response to increased international tensions between the young United States and the empires of Britain and France, the U.S. government sought Starr’s assistance in producing 2,000 cavalry sabers. In order to meet his deadline, Starr subcontracted out various stages of manufacturing to other local craftsmen — men he knew and with whose work he was familiar. On December 31, 1798, Starr received a payment of $2,000 from the federal government for his delivery of 2,000 quality sabers, delivered well ahead of schedule thanks to his method of “piecing out” the manufacturing process to skilled local craftsmen.

The very next year, Starr used the profits from his first government sword contract to buy a parcel of prime land along the banks of the Coginchaug River in Middletown, where he eventually built a sizable factory to house his ongoing weapon-making operations. In 1808, Starr received another massive government contract for 2,000 cutlasses and 2,000 pikes for the expanding U.S. Navy, and once again, he delivered his arms far ahead of schedule. In the hands of thousands of American sailors, Starr’s short, narrow naval sword became known as “the cutlass that fought the War of 1812.”

By the end of the War of 1812, Starr, together with his son Nathan Starr Jr., had firmly established themselves as one of the foremost arms manufacturers in the United States, producing not only swords, sabers, and cutlasses, but muskets and rifles as well. Starr also had the honor of creating the elaborate ceremonial swords awarded to some of the most famous heroes of the War of 1812, including Commodore Isaac Hull and General Andrew Jackson. Starr’s commercial fortunes began to decline on the eve of the Civil War, when the U.S. government started producing its own weapons at federal armories instead of relying on private contractors. Still, Starr’s blades saw plenty of action in the Civil War as freshly-recruited Union soldiers frequently carried them into battle. Over the approximately fifty years that Nathan Starr was actively producing arms for the federal government, he helped to arm thousands of American soldiers and sailors and helped establish Connecticut’s national reputation as a hub of quality weapons manufacturing — a reputation that persists well into the present day.

To view the full story on the CT Historian's website, click here.