On 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 Madison

In terms of total direct state aid, Madison would drop from $1,341,749 to $1,290,402 in the first year of the governor’s proposed budget and then drop slightly again in the second year to $1,259,480. Over the years, due to significant cuts, Madison has worked to move away from any dependence on state aid. However, State Representative Noreen Kokoruda (R-101) said just because Madison makes smart budget decisions doesn’t mean the state can keep asking for more from the town.

“I heard a new term this week when someone was talking about towns like Madison, we are a ‘Donor Town,’” she said. “That means we send significantly more revenue to the state than we get in support. Madison taxpayers send a little over $60 million to Hartford each year with our income tax. That’s in addition to sales tax and fees. We get about $1.5 million back each year. Next year we will get even less as we cover our share of the teachers pension.

“This small amount of state aid directly impacts our regressive property taxes more each year. We all know that people in this town are very generous and want to help, but right here in this community we have families and seniors who just can’t keep giving. They need our help,” she continued. “It’s about priorities and living within our means. This budget doesn’t do that.”

Madison would be asked to pick up $150,783 of the teacher pension in the first year of the budget and $311,381 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.

Kokoruda said the pension plan is in serious trouble but said towns can’t be asked to carry some of the cost of the pensions unless towns are brought to the table when the contracts are negotiated.

“These are our teachers and it’s important that we support them,” she said. “The problem is that the executive branch has kept our local communities from being part of any pension or health benefit discussion for decades. For too long the state did not invest adequately in these critical programs. Finally in 2008 with the urging of the teachers unions, the state made significant changes. This pension fund has been poorly administered and we find that it will only get worse if we don’t do something now.”

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.