🔒Lamont’s budget dazes and confuses taxpayers

Taxpayers who closely read Gov. Ned Lamont's first-ever budget proposal might have felt like they were in a featherweight boxing match.

The first jab was $797 million in new sales tax revenues. Then Lamont taunted us with nuisance taxes on grocery bags and sugary drinks. Hospitals took a hard shot from the left through the proposed extension of the provider tax, which was supposed to shrink dramatically in the years ahead.

Cities and towns also took a blow, having to potentially pick up part of the tab for the cash-strapped, teachers' pension fund.

The attempted knockout punch was the $800 million proposal to adopt statewide tolling.

So, where does Lamont's $43 billion, two-year spending plan leave beleaguered taxpayers and businesses? Dazed and confused could be an accurate description, but maybe not knocked down for the count.

Lamont's budget has upset those on all sides of the political spectrum. Progressives say the Democratic governor didn't raise taxes enough on the wealthy; conservatives say it's just another example of a Democratic governor seeking tax increases to solve the state's budget crisis.

Here's my take:

To suggest the budget represents a “pro-growth” agenda, as some of the governor's marketing materials say, is political spin at its purest. Any spending plan that will drain hundreds of millions of additional dollars from taxpayers' pockets can't possibly be considered an economic boost to the state.

Lamont's budget will raise the cost of living in Connecticut, making the state a less attractive place to live, especially if his toll proposal wins approval.

That being said, things could have been worse. We all know the fiscal crisis Connecticut faces, largely a result of past politicians not paying into the state employee pension fund, which is now severely underfunded, threatening to cost the state billions of dollars in additional annual payments in the coming years.

In the near-term, Lamont has to close a $3.5 billion deficit over the next two years. And his hands are tied in many ways because of the significant fixed costs in the budget, which legally can't be reduced without going through the collective-bargaining process (More on that later).

The good news is that he didn't raise income or sales tax rates and left intact the state's growing rainy day fund, which is projected to have a $2 billion-plus surplus by the end of this fiscal year. We are going to need those dollars when the next recession hits, which could be right around the corner.

He also proposed a debt diet that reduces annual government borrowing by 39 percent, a good and necessary step following the reckless use of the state's credit card by Gov. Dannel P. Malloy. And the tolls revenue, despite being a taxpayer burden, could help fund needed transportation infrastructure projects.

Other positives from Lamont's budget include restructuring the Teachers' Retirement System, eliminating the gift and business entity taxes, and exempting business-to-business transactions from the expanded sales tax on professional services.

One area where Lamont's budget doesn't go far enough is state employee savings. He did seek concessions that would tie future cost-of-living increases for state employee pensions to the rate of investment returns, but more should be done to reap further savings from a government workforce taxpayers cannot afford.

I understand Lamont's options are limited — a short-sighted 2017 labor concessions deal hatched by the Malloy administration exempted most unionized state workers from layoffs through 2021 — but that doesn't mean the Democratic governor shouldn't push for more savings.

Yes, state employees have agreed to concessions on multiple occasions over the last decade, but what public-sector labor unions often forget is that their members work for taxpayers, not the other way around.

Connecticut can't afford to pay for the services it used to provide, and must continue to prioritize funding it does have, rather than rely on new sources of revenue. Labor agreements shouldn't hold taxpayers hostage.