🔒Proposal would restore $152M in casino revenue aid to all municipalities

A bipartisan group of state lawmakers has backed legislation that would significantly increase and redistribute municipal aid linked to tribal casino revenue, restoring funding to dozens of municipalities that have gone without it for years. Senate Bill 388, which has 20 co-sponsors from both sides of the political aisle, would overhaul the state’s Mashantucket Pequot and Mohegan Fund by setting a fixed annual distribution of about $152 million that would be divided among all 169 municipalities. The proposal marks a significant change from the current system, approved in 2019, under which roughly $52 million is distributed and 44 towns receive no funding. The fund is financed by slot revenue payments from the Mashantucket Pequot Tribal Nation, which operates Foxwoods Resort Casino in Ledyard, and the Mohegan Tribe, which operates the Mohegan Sun Casino in Montville. Lawmakers altered the distribution formula in 2019 amid declining casino revenues and persistent state budget deficits. Faced with less money and competing fiscal pressures, legislators reduced the overall amount sent to municipalities and redirected some revenue to the state’s General Fund. They also shifted toward a more targeted aid model, eliminating payments to dozens of smaller and midsize towns and concentrating funds elsewhere. During a public hearing on the bill held March 12, elected and administrative officials from 25 municipalities submitted testimony in support of the bill. Most of those who submitted testimony said that by increasing funding for the grant and distributing it to all municipalities would provide “needed non-property tax revenue,” which would help reduce some of the pressure on local property taxes. Among those who submitted testimony were Ledyard Mayor Fred B. Allyn III and Montville Mayor Leonard G. Bunnell Sr., whose communities each host one of the tribal casinos. Both said allocating the annual funding to all municipalities would return the fund to its original intent. In addition to the municipal officials, testimony in support of the legislation was submitted by the Connecticut Conference of Municipalities, Connecticut Council of Small Towns, Lower River Valley Council of Governments and Northeastern Connecticut Council of Governments. The biggest beneficiaries would be the 44 municipalities that currently receive no funding. Towns including Litchfield, Middlebury, Oxford, Southbury and Woodbury would see aid restored, creating new revenue for local budgets. Smaller and rural communities across the state also stand to gain as the overall funding pool would nearly triple, increasing baseline allocations even for towns that already receive aid. Although most municipalities would see increases, some that benefited from special adjustments or larger shares under the current system could see their relative advantage shrink under a more uniform formula. While only three people submitted testimony opposing the bill during the March public hearing, one of them was Joshua Wojcik, acting secretary of the state Office of Policy and Management. Wojcik raised concerns about the bill’s impact on the state budget, especially for the current fiscal year. The bill requires increasing the amount transferred from the General Fund to the tribal fund by $100 million in fiscal year 2026, which “would bring the state budget out of compliance with the constitutional spending cap and would divert resources potentially needed to balance the General Fund, impacting FY 2027 and beyond,” he said. State Comptroller Sean Scanlon said last week the latest budget projection showed a $6 million shortfall for the current fiscal year. While that amounts to a tiny fraction of the $27.2 billion General Fund budget, it would be the first deficit under Gov. Ned Lamont. Wojcik also said the bill would require the legislature to approve an emergency certification to reduce the transfer from the General Fund to the tribal fund, limiting the state’s flexibility in making budget adjustments. “It is for these reasons that the governor vetoed SB 1213 in 2023, which largely resembled the bill before you now,” Wojcik said. The Appropriations Committee on April 1 voted 51-0 with two legislators absent to approve the bill, which has been sent to the Legislative Commissioners' Office.