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Conflicting opinions on state's financial future Fiscal guardrails hot topic at chamber meeting

Updated: Mar 5




A shot of the Waterbury Clock tower looking down onto the supreme court building on a nice summers day

Members from the business and nonprofit sides of the Waterbury Regional Chamber offered conflicting opinions Friday to Gov. Ned Lamont on following the state's so-called "fiscal guardrails.” 

Lamont credited the budget caps on appropriations, spending, and borrowing for keeping Connecticut operating in the black while many other states are running in the red in a keynote speech to the business group's annual legislative breakfast. 

"I like the fact that our budget is still in the black compared to a lot of peers right now," Lamont said. 

The latest budget estimates are projecting a surplus between $160 million to $169 million for the current 2024 fiscal year that ends June 30. 

Lamont and the state legislature agreed last year to extend a five-year commitment to the bond market to follow the fiscal controls for five more years, with the option to extend them for another five years. 

A year later, Lamont is facing pressure from some members of the Democratic majorities and advocacy groups to loosen the budget caps to allow more for a variety of legislative priorities. He continued to show no sign of relenting during Friday's appearance at the Wyndham Southbury. 

"I want to disabuse people of one thing: I think the guardrails are important," Lamont said during his keynote remarks. "Not only have we had fiscal stability six going on seven years, but it also allowed us to make the biggest investments in our history in education, and daycare, and universities." 

He said towns and cities have benefitted from the stability at the state level because the flow of state funding is more consistent and predictable. 

In introducing Lamont, Webster Regional President Michael L. O'Connor praised Lamont for his steadfast dedication to the fiscal guardrails that limit how much revenue is available to be appropriated, how much spending can increase per year, how much surplus funds may be set aside, and how much can be borrowed through state bonding. 

When Lamont took the audience questions later, Wellmore Behavioral Health CEO Gary Steck urged Lamont to reconsider his stance because he said the fiscal guardrails are blocking needed additional funding for cash-strapped nonprofits, including for increasing Medicaid rates for mental health services. 

"The nonprofit community is suffering," he told Lamont. 

Lamont pointed to the bipartisan two-year, $51.1 billion budget that he signed last year that includes more than $400 million for nonprofit community providers, plus $50 million in bond funding for the Nonprofit Grant Program for capital needs. 

He said the state government is also analyzing the adequacy of Medicaid rates paid to nonprofit providers. 

"We're taking a good hard look at that. We spend as much on Medicaid as just about any state in the country," Lamont said. "We have a lot of utilization." 

Three of the Waterbury Regional Chamber's legislative priorities are expanding the use of nonprofit organizations and businesses to deliver state services, fully fund Medicaid 

reimbursement and increase provider rates, maintaining current funding levels for behavioral health care, and opposing further reductions. 

Another legislative priority is responsible management of budget surpluses. The state government has amassed $11 billion in budget surpluses since the 2018 fiscal year when the fiscal guardrails went into effect, including a record $4.3 billion in the 2022 fiscal year. 

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