February 26th, 2021
In This Issue:
From Paddi's Desk
CT Agency Corner
Municipal Roundup
From Inside The Golden Dome
Behind the Scenes
This Day in CT History
Who gets the credit for the budget stability that so many states are seeing across the country? The honor goes to (drumroll, please) Robin Hood!

You might remember, as the legend goes, he was either a nobleman or a member of the yeoman class. Dressed in green clothing, wearing a hat with a feather, he robbed from the rich (Peter) and gave to the poor (Paul). His “Band of Merry Men” along with the ever-present Maid Marian were all part of the transfer of money from one to another.

So how does this relate to state budgets across the country, including Connecticut?
According to a recent survey by the National Conference of State Legislatures (NCSL), most states are enjoying stable revenue conditions, with only a few likely to continue to face serious revenue challenges. This is a much different story than a year ago when the vast majority of states were looking at rocky financial roads, local economies were lagging, technology was disrupting the jobs of the last decade and the stock markets were incrementally improving.

March 11, 2020 hit hard when the World Health Organization declared a pandemic over COVID-19. It wasn’t long before nearly all states declared a state of emergency and braced for dire financial straits as the weeks and months dragged on with little or no letup in the pandemic.
In stepped (drumroll again, please) Robin Hood, a.k.a. the federal government.
By last August 31, the federal government forked over a whopping $1.3 trillion in aid packages, with a significant amount of $150 billion going directly to state and local governments. Between unemployment assistance, “PPE” assistance, disaster relief help and rental assistance, an additional $500 billion found its way to the 50 states. Indirectly, the first phase of the Payroll Protection Program infused more than $525 billion in local state coffers and the local economy. As states became fortified with the help of the federal government, the federal deficit grew by 2% or an additional $4.7 trillion.


With Robin Hood’s largesse having been spent, what’s a state to do? According to the NCSL survey, many states aren’t faring as well as Connecticut. Listed in the danger zone are Alaska, Hawaii, New Jersey, Maine, New Mexico and New York. A strong cohort. Those states are exploring enacting unitary tax models, taxes targeting CEO pay and high-income citizens, as well as increasing corporate taxes and expanding taxes on all kinds of services and remote transactions. Interestingly, Connecticut has many of those taxes in our tax structure already—except for taxes on high-income earners.
Governor Lamont all but promised in his budget address that he would not support any form of taxes that would incentivize high-income earners to leave the state. His solution was to increase the “use tax”—meaning legalize the use of recreational marijuana, the use of sports betting and taxing the use of our highways by commercial trucks. Meanwhile, some members of the Democratic party—which has strong majorities in the legislature—support taxes on the high-income earners and other taxes the Governor opposes. It remains to be seen if they are willing to take on a fairly well-liked Governor who is adamantly against those ideas. 

That leaves some to wonder: Will Robin Hood return?

It’s very likely that he will, and expect that he’ll look an awful lot like Joe Biden. The president has proposed stimulus relief of $1.9 trillion, including an additional $350 billion for state and local governments.

While we wait, the state budget process marches on. And outside Connecticut, one of the nation’s most accurate predictors of financial and technology trends is suggesting that the national economy may not be as stable as some think. Jeff Brown—who is best known for predicting the tech bust in 2000, the housing bubble, the strange movement in bitcoin and other such notable economic shifts over the past decade and a half—is predicting that the economy is on the cusp of something not seen in 20 years. Brown predicts some of the tech stars will go the way of the fax machine and drop dramatically. He sees a splintering in the markets and that a small segment of the tech world will rise as other more traditional techs will falter. Yikes!

As scary as that is, it should not be a surprise if you consider how COVID 19 has changed the world forever. Seniors (the largest age demographic in the country) who a year ago didn’t know the difference from Amazon or Netflix; a like or a share; FaceTime or Zoom, now do their banking and buy their food, books and movies online. So many things are available online and can be bought from any corner of the world with a click, and those new habits we’re all learning are disrupting local commerce, especially our local retail stores, food establishments, entertainment venues, etc.
Buying local supports local jobs, the local and state economy and state tax models are built on harnessing revenue from the economies in their borders. So even if Robin Hood rides this one more time, Connecticut’s leaders are going to have to look to longer-term solutions than a generous fellow in green tights.

Just this week the Connecticut legislature took the first step in that direction when the House passed a Lamont administration initiative to position Connecticut as a driver of data center economy. Just as former Governor Malloy was departing for office, he endorsed and supported an energy and innovation hub in New Britain, anchored by a fuel cell-powered data center. This tweaked the interest of other interested data center developers to take a second look at Connecticut as a home base. The emergency bill that passed this week in the House will take a huge step toward transforming our economy, attracting the large “cloud” companies that rely on large data centers that this legislation will draw.

So while Connecticut’s state and local budgets await a second visit from Robin Hood, we can take heart that the Governor and an overwhelming bipartisan majority in the state House took swift action to seize the opportunity to harmonize tax policy with a transformative economy that may yet help Connecticut sustain and thrive through dramatic shifts in the markets and the economy at large. 
Desegregate CT Sees Movement on Zoning Reform

The NY Times today released a thorough glance of the Desegregate CT movement that's being launched in Connecticut by advocates that wish to reform towns who have restrictive zoning codes against multifamily homes.

The report, which can be found here, outlines other coalitions such as the Open Community Alliance, that have gone as far as to file lawsuits on the basis of housing applications being denied in towns like Woodbridge. The application, which was file by their director Erin Boggs, was promptly died when filed with the town and that same day the declaration was made by the alliance that a lawsuit was imminent and that this would be replicated in other communities in the state.

The Desegregate movement is taking a different approach by trying to establish criteria where towns would have to be more flexible with the development of affordable housing. These standards include being within a half mile of mass transit and also not have large clustered housing being built exclusively in one area of a town.

According to the report, one of the coalition’s more surprising members is the Connecticut Conference of Municipalities, which advocates for municipalities across the state. In the past, Joe DeLong, the executive director, acknowledged that the organization has “vehemently” protected local control and local decision-making for years, but said that more recently, it has begun focusing on racial equity in a number of areas.
The Assembly Takes on PILOT Funding

The CT house of representatives met this week and took up a number of measures including one that has a tremendous impact on local governments, who are all in varying levels of budget preparation. The house voted to make changes to the long running system for making state payments in lieu of taxes (PILOT). These dollars are meant to partially supplement cities and towns for lost property tax revenue not received from nonprofit properties like state property, hospitals and community organizations that are exempt. The numbers or “runs” have not been finalized, but early discussions have New Haven receiving an additional $49 million and Hartford receiving an additional $22 million. All of the bills that were passed in Wednesdays house session are still pending approval by the Senate and a signature from the Governor.
There is also some good news for teachers, local school administrators and children this week. The Governor announced early this week that along with his change to the roll out of vaccines which will now be based on age, school employees will be able to start receiving vaccinations on March 1st. This comes on the heels of a great deal of pressure from associations representing these teachers who, in some cases, may not have been in a classroom since last March. 
The Recreational Marijuana Debate is On
There was a lot of talk this week in and around the CT General Assembly about whether or not to legalize the use of recreational cannabis. Governor Lamont’s bill, SB 888, had a public hearing today in the Judiciary Committee. From 10 a.m. until almost 2 pm, a panel of twenty members of the Governor’s senior staff including the Chief of Staff and a number of agency commissioners fielded questions from legislators about the proposal.

While many are expressing concerns, particularly from a public health perspective and concerning youth use of marijuana, some others who are supportive of legalization are criticizing the Governor’s bill for not doing enough to address equity, particularly related to criminal justice reform and allowing communities that have been negatively impacted by black market sales to be the ones receiving most of the revenue generated in a new legal market.

There are other recreational marijuana proposed bills that differ from the Governor’s proposal being considered by Democratic leaders, notably a bill in the Labor committee, HB 6377, which is supported by members of the Progressive and the Black and Puerto Rican Caucuses.

Earlier this week, Governor Lamont held a roundtable open to members of the press to highlight this bill before it's public hearing. The roundtable included comments from leaders representing local government, manufacturing and the need to address equity. These speakers talked about three main components of the bill, (1) decriminalization of possession of certain amounts, (2) regulation, largely based off the current medical marijuana industry in CT, and (3) revenue generation. The Lamont administration is projecting that in Fiscal Year 2023, recreational cannabis will bring in $33 Million.
Freshmen Legislator Profile: Stephanie Thomas (D-Norwalk)

Stephanie Thomas is a first-term State Representative proudly serving the 143rd district in Norwalk, Wilton, and Westport. She is Vice-chair of the Government Administration and Elections (GAE) Committee, and serves on the Commerce and Transportation Committees. So far this session, we've seen Rep. Thomas in action as an active participant in GAE Public Hearings as the committee considers many bills that would make changes to voting laws in Connecticut.

In this new role, Rep. Thomas wants to be a champion for everyone, helping build a stronger, fiscally solvent, and more equitable Connecticut. She is the first person of color and first Norwalk resident to hold the 143rd House Seat since redistricting in 1973. After narrowly losing the election in 2018, Rep. Thomas was successful in the 2020 election cycle winning a seat previously held by a Republican since 2010.
Rep. Thomas is the owner of a small business that provides strategy and fundraising consulting to nonprofit organizations. She brings with her over three decades of experience helping hundreds of organizations who serve the working poor, homeless, disadvantaged students, and many others left behind when government fails to strengthen all its members.

She also serves as a member of the Norwalk Zoning Commission and Democratic Town Committee. She received a bachelor’s degree in sociology from New York University, a master’s degree in nonprofit management from New School University and resides in Norwalk with her husband.
February 26th, The Rise and Fall of Manchester's Silk Industry

Of all the many factories and diverse industries that sprang up across Connecticut during the Industrial Revolution of the early 19th century, one of the longest lasting was the silk-spinning industry, which coalesced around the Cheney Brothers silk mills in Manchester.

Opening their first silk-processing mill in 1838, the Cheney brothers sought to capitalize on a money-making fad that had taken New England by storm: sericulture, or the cultivation of silkworms and the mulberry trees they fed upon. American cloth production had soared ever since the late 18th century, when innovative New England manufacturers started taking full advantage of the region’s abundant water power to drive their machinery. Silk cloth was consistently far more lucrative than cotton, wool, or linen, and for decades New England farmers had tried to import and cultivate mulberry trees to raise silkworms, whose cocoon thread they could sell to silk companies for a high price.

The mulberry tree craze was grinding to a halt just as the first Cheney silk mills were being established, thanks to a series of harsh winters that wiped out most of the delicate trees. The demand for silk, however, was as high as ever. The Cheney brothers began importing raw silk from overseas, which allowed them to focus on improving the quality of their finished silk products instead of worrying about an inconsistent local supply chain. Over the 19th century and continuing well into the 20th, the Cheney Brothers Silk Manufacturing Company grew into a massive corporation, the largest provider of silk thread and silk products in the United States.

Here is a link to the full article - Provided by CT Humanities Council.
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