November 8, 2024

In This Issue:

From Paddi's Desk

CT Agency Corner

Municipal Roundup

Inside Scoop

This Day in CT History

This Week's News:


Access Health CT opens enrollment for 2025


GOP challenges one CT Senate result, but Dems keep majorities


Three-night digital art festival kicks off in downtown Hartford Nov. 13

Protecting Connecticut’s Fiscal Guardrails: UT, OH, what now?

This week saw huge shifts in the country’s politics, and for Connecticut, just a bit of a tweak but an important one. The Connecticut State Democrats picked up one seat making it a supermajority and now “veto-proof.”


With the Connecticut House now at 101 (with one current Democratic seat yet to be called and 50 Republican seats, unless they pick up Torrington’s unconfirmed seat) they too enjoy the supermajority status in the House.


Why should folks care about this “insider” tidbit? Why does this matter other than bragging rights?  

Since 2017, Connecticut has been bound by a set of fiscal guardrails aimed at keeping the state’s finances in check, a product of an unprecedented bipartisan alliance that defied conventional party loyalties. These fiscal measures, introduced when a Democratic-led legislature broke when then-Governor Dan Malloy collaborated with Republicans, were designed to prevent the state from falling back into the deficit-ridden cycles of the past. Now, as calls to remove these restrictions grow louder, many worry about the potential for fiscal instability and increased budgetary uncertainty in Connecticut’s future, especially by Governor Ned Lamont.


Bipartisanship set Connecticut up for safe landing in the post-Covid years.

In the summer during the special session of 2017, as Connecticut grappled with deep fiscal challenges, the legislature took an unusual step. Rejecting former Governor Malloy’s proposed budget, a group of moderate Democrats joined forces with Republicans to craft a series of “fiscal guardrails” that aimed to rein in spending and bolster budget stability. This package included measures such as a volatility cap, a revenue cap, limitations on borrowing, and the use of one-time revenue sources.


According to former Republican Senate President Pro Tempore Len Fasano, these guardrails were designed to “provide predictability and discipline to the state’s budgeting process, helping Connecticut avoid the pitfalls of boom-and-bust budgeting.” Democratic leaders also acknowledged that Connecticut needed to change course, with Representative Jason Rojas remarking at the time that “long-term structural reforms were essential to build a more sustainable financial future for Connecticut families.”

 

The Results: A Stronger Fiscal Outlook –Sustainable Fiscal Planning

Since these measures were implemented, Connecticut’s fiscal health has improved significantly. The volatility cap alone has redirected billions from high-income tax windfalls into the state’s rainy-day fund, reducing the pressure to make sudden cuts when revenue dips. As a result, Connecticut now has over $3 billion in reserves, one of the largest rainy-day funds in the state’s history, which has helped maintain services without resorting to severe cuts or tax hikes during economic downturns.


According to data from the Legislature’s Office of Fiscal Analysis, Connecticut saw a reduction in budget deficits and was able to pay down a portion of its long-standing pension liabilities, saving the state millions in interest payments. Governor Lamont has praised these results, stating that the guardrails have “transformed Connecticut’s fiscal foundation” and insisting that “their removal would risk undoing years of hard-fought progress.”


Legislative Pressure to Dismantle the Guardrails

Despite these successes, recently democratic lawmakers and interest groups have been pressing hard to loosen or remove the guardrails. With Connecticut Democrats holding significant majorities, proposals to lift or modify these fiscal restrictions have gained traction. Critics argue that the current constraints limit their ability to address immediate public needs, especially in areas such as education and healthcare, where advocates say funding has been constrained.


However, each time a measure to weaken the guardrails reaches his desk, Governor Lamont has threatened to use his veto power, standing firm on preserving the state’s fiscal stability. “We can’t go back to the days of budget crises every few years,” Lamont has asserted, warning that dismantling the fiscal guardrails “would be a disservice to future generations.”


What can happen with a Supermajority in each house?

The balance of power in the Connecticut Senate has played a crucial role in keeping these protections intact. A veto-proof supermajority would give legislators the power to override the governor’s veto, potentially dismantling or “readjusting” the fiscal guardrails without executive resistance. Analysts estimate that without these restrictions Connecticut could face future deficits nearing $1 billion and increased borrowing to cover shortfalls.


Fiscal policy advocates, such as Carol Platt Liebau of the Yankee Institute, argue that lifting these caps would open the floodgates for unsustainable spending, leading to higher taxes and more borrowing that would ultimately burden future generations. As Liebau stated, “Connecticut’s fiscal stability should be seen as a hard-won legacy, not something to be undone because it feels restrictive at the moment.”


It will be fascinating to see how the governor and legislative leaders will “do the dance” of negotiations on the fiscal restraints and the arrows in the Governor’s quiver that will put pressure on the Senate and House to keep the guardrails in place. Some believe he will have a very popular State Comptroller on his team as someone who actually looks at the day-to-day spending and revenue shifts and is mandated to keep the state budget in balance at all times.


A Debate Far From Over

With the 2025 legislative session approaching, Connecticut has a critical decision to make. The debate around these fiscal guardrails raises important questions about the role of long-term financial planning in government and the balance between flexibility and discipline. While the guardrails have certainly constrained spending, they’ve also helped secure the state’s financial future, setting a precedent for responsible budgeting.


In a recent statement, Governor Lamont urged lawmakers to “think of these fiscal guardrails as not just limitations, but as guardrails that keep Connecticut on the right road, providing stability and sustainability for all residents.” For now, these fiscal constraints remain, but the future could bring a new wave of debate and, potentially, significant change.


Back in 2017, the bipartisan efforts in the legislature demonstrated the power of working together. It produced Connecticut's fiscal guardrails and the improvements seen since their implementation, as well as the potential consequences of removing them.


“Those who cannot remember the past are condemned to repeat it.” Attributed to philosopher George Santayana, this adage highlights the importance of learning from past mistakes. Connecticut’s financial struggles are well-documented, and this saying should remind lawmakers to remember why the guardrails were put in place in the first place.


Hopefully, despite the power shift on this issue, Connecticut will be lucky and the supermajorities will carefully, and with the consent of the Governor, craft a budget that meets the needs of the residents while maintaining a stable and balanced future.  



Hold on I’m sure we're gonna see some fireworks before it’s over and done. 

Agencies asked for reduced budget options 


After the politics and celebrations, the sobering news of the state budget awaits anxious lawmakers who will need to make decisions on shortfalls in the budget and the fiscal guardrails adopted two years ago.


The once healthy surplus has now been lowered to less than $100M (approximately $67M according to the State Comptroller) which is down dramatically only five months into the fiscal year. These challenges will become more dire as the session begins since the projected deficit will likely be realized in quarter three, but there are some silver linings assisting legislators:


  • The Rainy Day Fund balance is currently $4 Billion which is a state record and allowable for usage under the rules of the fiscal guardrails for current spending.


  • Built into these assumptions are long term debt obligation payments which are also being paid off at the fastest rate in state history.


  • Despite the deficit increase, the collection of revenue has only slightly tapered off which shows healthy forecasting for the next seven months.


Agencies are preparing for these shortfalls by offering “budget options” to the Governor’s budget office, the Office of Policy and Management (OPM). Part of the budget option process includes OPM asking state agencies to offer up to 5% reductions in their overall budget. While some agencies can likely offer options, others, such as DSS (Department of Social Services), are experiencing huge shortfalls and will need all the relief possible.


The process for budget options begins now and concludes in January in preparation for the Governor to issue his budget by February 5th. 

During this week’s election, a notable surge of inactive voters appeared at the polls. Despite the introduction of a two-week early voting period, many residents showed up on Election Day, only to discover their status as inactive due to factors such as irregular voting habits or failure to respond to official notices. Branford saw about 210 same-day registrations during early voting and 245 on Election Day, significantly exceeding the usual numbers. This influx was influenced by the heightened voter interest linked to the presidential election.


In Middletown, similar issues arose, partially due to redistricting changes that took effect three years prior. Republican Registrar George Suoto explained that voters affected by these changes received notifications, but many only vote during presidential elections, which led to their automatic shift to inactive status in the state’s Centralized Voter Registration System. Election officials in both towns worked diligently to reactivate these voters and ensure they could cast their ballots.


Moving briefly away from the elections, the Region 20 Board of Education in Litchfield has initiated its search for a new superintendent by hiring the Connecticut Association of Boards of Education (CABE). This decision followed the recommendation of a committee that reviewed CABE alongside two other firms. Region 20, formed from the merger of Region 6 and Litchfield schools, has been without a permanent superintendent since its inception on July 1, following the unexpected resignation of Christopher Leone. Assistant Superintendent Kristen Della Volpe has served as acting superintendent since July.


During the board meeting, a $1,000 Amazon gift card from former Superintendent Leone was accepted for use by the library staff at Plumb Hill Middle School, though board member John Morosani expressed reservations due to ongoing budget challenges. Projections indicated the Litchfield budget overspending by nearly $900,000 and Region 6 facing over $400,000 in unpaid bills. Morosani suggested delaying acceptance of the gift until an audit of the budgets is completed in December. However, other board members, including Jannelle Carroll and Matthew Terzian, supported accepting the gift as a gesture from a parent, emphasizing fairness given prior donations from other parents. Board Chairwoman Tiffany Parkhouse confirmed that there were no legal issues with accepting the gift.

Lame Duck


What a week! There is so much to unpack from the last few days. Close races, popular incumbent losses, new faces in the State Legislature and statewide reactions, but let’s jump into another big topic, the next few weeks before the end of the year. The upcoming block of legislative session days in Washington are critical to the state of Connecticut as the federal government returns for the lame duck session. This period of time, between Election Day and when the new president takes office the following January, occasionally produces some interesting surprises on the federal side. With Republicans winning the presidency, the Senate, and what looks like the House, the next few weeks will bring a lot of drama. There are two wonky and major concerns, the Farm Bill and the federal budget. Not passing either of these, with a long term focus, will have a serious impact on our state. Let’s dive into why.


On December 7th of this year, government funding runs out. When I worked for the federal government, they ran out of money in my sixth month due to an inability to come together to pass a budget. This resulted in delayed paychecks and a stern discussion with my landlord. This year, specific federal injections of money (earmarks) for hundreds of Connecticut organizations hang in the lame duck balance. Inability to pass a budget means those earmarks (otherwise known as Congressionally Directed Spending) do not make the cut.


The Farm Bill is passed or reauthorized every few years. It remains in conference between the House and Senate and its main task is to reauthorize programs within the U.S. Department of Agriculture for five years. Connecticut is a huge beneficiary of those programs and there have been some serious problems with that bill most notably around nutrition programs and conservation dollars. This important bill hangs in the balance due to the lame duck session that is fast approaching.


These aren’t the only issues coming in the lame duck session. Environment, healthcare, transportation, and foreign policy all hang in the balance during the next few weeks. The Inflation Reduction Act and the Bipartisan Infrastructure Law are potential targets for the Trump administration along with funding for our state (look for a lot of the dollars to be expedited these next few weeks). There is also a significant bill that would overhaul insulin prices capping Medicare copays, funding for Israel and Ukraine, and also the push for the Senate to confirm judges before the next administration rolls in.


What happens in the next few weeks on the federal side will have a serious impact on our state. We will be following along as we get closer to the end of the year.  

Election HQ Updates


In Connecticut an automatic recount for primary elections is triggered when the margin is less than 0.5% of total votes cast for office but not more than 1,000 votes, or fewer than 20 votes. A recount is also required in the event of a discrepancy in vote totals. These races were either too close to call at the time or had a recount over the last few days.


Below are the official results.


S29- Brooklyn, Canterbury, Killingly, Mansfield, Pomfret, Putnam, Scotland, Thompson, Windham


Mae Flexer*- 49.78%

Chris Reddy- 48.41%



S8- Avon, Barkhamsted, Canton, Colebrook, Granby, Hartland, Harwinton, New Hartford, Norfolk, Simsbury, Torrington


Paul Honig- 52%

Lisa Seminara*- 48%



H22- Farmington, Plainville, Southington


Rebecca Martinez- 51.75%

Francis Cooley*- 48.25%



H102- Branford


Robin Comey*- 53.72%

Ray Ingraham- 46.28%

11-08-cwm-2014-full-sail image

November 8: The Last Surviving Wooden Whale Ship Permanently Anchors at Mystic


Today in 1941, the last remaining wooden whale ship in the world made her permanent home in Mystic, Connecticut. The Charles W. Morgan was a massive vessel with a deck measuring over 110 feet in length and a main mast rising 110 feet into the air. It once numbered among a combined fleet of 2,700 active whaling ships in the mid-to-late 19th century when the American whaling industry was at its peak.


Built in New Bedford, Massachusetts, and launched in July 1841, the Charles W. Morgan (named after its original owner) was an active whaling ship for 80 years, undertaking a total of 37 commercial whaling voyages. Most of these voyages lasted for years at a time, and brought the Morgan to every corner of the world’s oceans in search of lucrative whalebone and whale oil. During those 80 years, the crew of the Morgan survived countless storms and hurricanes at sea, treacherous icebergs in the Arctic, and even an attack from cannibalistic natives in the South Pacific.


As synthetic and cheaper substitutes for whale oil became more widespread in the early 20th century, the American whaling industry experienced a sharp decline, and by the 1920s, the Morgan had retired from the business and was displayed in Dartmouth, Massachusetts until 1941, when the Marine Historical Association (better known today as Mystic Seaport, America’s largest maritime museum) offered to purchase the ship from its private owners. On November 8, 1941 — 100 years after it first set sail — the Charles W. Morgan arrived at Mystic Seaport, having been towed and escorted by a small fleet of boats including a Coast Guard cutter. The handsome vessel has served as the centerpiece of the Mystic Seaport maritime museum ever since, welcoming over 20 million visitors on board to tour the floating historical exhibit. A national treasure found its new home in welcoming waters — on this day in Connecticut history.



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

Sullivan & LeShane, Inc.
www.ctlobby.com | (860) 560-0000