🔒Lamont’s first year takes a political toll

Gov. Ned Lamont had a bumpy first year in office scoring a few political victories but getting rebuffed on arguably his most significant policy push.

The political novice delivered on a variety of campaign promises, including increasing the state’s minimum wage and creating a paid family medical leave program for private-sector workers — both controversial policies opposed by the state’s top business lobby.

To soothe their angst, Lamont delivered on his pledge to eliminate or reduce several “nuisance taxes” on businesses, and hold income and corporate tax rates steady, despite needing to tackle a multibillion-dollar deficit.

The former entrepreneur, who is married to venture capitalist Ann Lamont, has many successful and wealthy business people in his orbit, but he held firm on the worker-focused policies.

Lamont said he views the paid-leave program, which will start in early 2022, as the only realistic way small employers will be able to offer the benefit to new parents and workers who need to care for sick loved ones.

“I said I was going to do it, I did it and I did it on purpose,” Lamont said in a recent interview with HBJ in his state Capitol office.

He noted that the paid-leave program is entirely employee funded through a new payroll tax and if the benefits cost more than the tax brings in, tweaks can be made.

“If the numbers are off, we reduce the benefit, we don’t raise the fee,” he said.

Legislative traffic jam

While he backed a number of major legislative proposals in his first year, Lamont also rode a political roller coaster after waffling on his position on tolls.

In his second month in office, after he campaigned on trucks-only tolling, the governor rolled out a much broader plan to toll cars and trucks, raising $800 million annually.

He faced fierce opposition and the proposal failed, as did other tolls plans throughout the year.

Ultimately, Lamont was forced to revert back to supporting trucks-only tolls and he’s hoping for a January legislative session to vote on that scaled-down proposal, which would generate $187 million in annual revenue, helping to finance $19.4 billion in transportation improvements over a decade.

Lamont said attempts to create a reliable funding stream to improve Connecticut’s roads and bridges has been a slog. It’s also made him an unpopular governor, with an approval rating of 24 percent as of October, according to a Sacred Heart University/Hartford Courant poll.

Other issues where Lamont failed to muster support included increasing property tax credits for middle-class voters, legalizing recreational marijuana, and working out a deal allowing for another casino and sports betting in Connecticut.

His successes include settling a long-running dispute with the state’s hospitals over the provider tax; ramping up Connecticut’s renewable energy push by putting an enormous wind-power contract out to bid; and negotiating a restructuring of payments to the state employee and teachers’ pension funds, producing hundreds of millions of dollars worth of short-term savings.

Scoring his performance

When HBJ interviewed Lamont in late 2018 about the year ahead he laid out several overarching goals: Help to drive a turnaround in how Connecticut is perceived from the outside and within, and push for a state budget that would provide as much certainty to employers and others as possible.

Reflecting on his experience 11 months later, Lamont said he certainly made progress.

The two-year, $43.5 billion budget was “a good start,” he said. It didn’t raise rates on major taxes, although it did raise hundreds of millions of dollars in new revenues through new and higher fees and a broadening of the 6.35 percent sales tax.

The budget was also signed on time, which has become a rarity in recent years.

“That was driving everybody crazy,” Lamont said. “We got it done on time; that doesn’t always happen.”

The state is also in a better position when the next recession hits, because it has built up its reserves (to nearly $3 billion) and reduced borrowing. Meantime, when it comes to perception, there’s plenty of self-loathing within Connecticut, Lamont says.

But bringing more business leaders into his administration’s orbit, including through the re-organized Connecticut Economic Resource Center and the recently convened Governor’s Workforce Council, raises the state’s stature with outsiders, he said.

So too does a change in the state’s debt rating outlook, fueled in part by Lamont sticking to his guns on reducing borrowing through his self-described “debt diet” and refusing to drain the state’s budget reserves, despite steady appeals from nonprofits and myriad others.

Finally, Lamont pointed to his efforts to meet with the Wall Street Journal’s famously conservative editorial board, which gave him some mostly favorable ink in September, detailing the deep fiscal hole he’s inherited and giving him credit for not making matters worse.

“I’ll take these things when it comes to perception,” Lamont said. “That was really important when it comes to the folks who I’m trying to get to take a second look at the state.”

As Lamont heads into his second year, he says his biggest priorities include workforce development and continuing to chip away at the state’s fiscal challenges.