Lamont Budget: Legalize Marijuana, Other Changes Proposed

HARTFORD, CT — Gov. Ned Lamont unveiled his revised budget proposal and goals for the 2020 legislative session Wednesday. He wants to legalize recreational marijauna on a regional basis, make changes to the state’s debt-free community college program and add stricter e-cigarette regulations.

Lamont also wants to add credit card fees to state transactions such as renewing a driver’s license.

The revised budget is for $22.3 billion in fiscal year 2021, which is a 0.6 percent increase over Lamont’s original budget plan enacted last year. The only increased tax rate will be on e-cigarette products to bring them to parity with traditional tobacco product taxes. A planned phase-out of a corporate tax surcharge would also be eliminated under Lamont's plan.

Lamont said Connecticut is in the midst of a turnaround and it’s time for everyone to understand that.

“No more badmouthing the great state of Connecticut. The rest of the country is looking at our state in a new light, and so should its leaders. Optimism can be contagious. No more rose-colored glasses,” Lamont said.

One of the hallmarks of Lamont’s plan is to not touch the state’s rainy day fund, which currently stands at a record $2.5 billion at the end of fiscal year 2019. It is projected to reach $2.8 billion by fiscal year 2021, which would be double what the state had in 2008 prior to the Great Recession, said Office of Policy and Management Secretary Melissa McCaw.

Credit rating agencies have looked favorably on Connecticut's robust emergency savings fund.

“Working together, efforts adopted by the legislature and signed into law are ensuring that Connecticut’s future will no longer be defined by fiscal crisis, and instead our state has entered a new era of fiscal stability,” Lamont said. “Because of a number of new policies and efficiencies that have been enacted, these years will be defined by the largest rainy day fund in Connecticut history, ensuring that our state has a strong fiscal foundation on which to build itself up – and the credit rating agencies have taken notice. Connecticut’s legislature has made reforms that are moving us into the right direction, and I am confident moving forward that we can continue on this path and keep Connecticut in a position of strength.”

Moody’s Investor Service projected that Connecticut would need between 10 and 14.8 percent of a budget reserve to weather a severe economic downturn and Connecticut is on track to have a 15 percent reserve by fiscal year 2021.

The governor previously detailed his plan to get healthcare costs under control and some of his business growth proposals. He is also working with some legislators on tolls.

Credit Card Fees

The state currently pays around $5.2 million in credit card service fees for things like renewing car registrations. Lamont is proposing a two to three percent surcharge for credit card use, which is similar to what municipalities charge to pay taxes online via credit card.

Eliminate Corporate Surcharge Phase Out

Current law would phase out the 10 percent corporate surcharge for income year 2021, but Lamont wants to keep the surcharge indefinitely. It is projected to bring in $22.5 million in fiscal year 2021. The surcharge was reduced from 20 percent in 2018.

The surcharge applies to companies with $100 million or more of gross income.

E-Cigs

Lamont is moving to increase the tax on e-cigarette products to be similar to those on traditional combustible cigarettes. He also wants to ban the sale of flavored products and increase penalties to anyone who sells e-cigarette products to those under 21-years-old.

The governor is also proposing a maximum nicotine amount of 35 milligrams per milliliter in e-cigarette liquid.

Marijuana

Lamont wants to regulate adult marijuana use and sales similar to other neighboring states that have already legalized it. Rhode Island and New York are also considering legalizing it. The plan is to start sales in 2022.

Lamont includes $300,000 in his budget proposal for the Department of Consumer Protection to begin laying out the regulatory framework for legalized recreational marijauna sales.

His proposal would also erase criminal records for those convicted of misdemeanor possession offenses of marijuana.

“Coordinated regional regulation is our best chance to protect public health by displacing illicit sellers with trusted providers,” Lamont said. “And it’s an opportunity to right the wrongs of a war on drugs that has disproportionately impacted our minority communities.”

Debt-Free College

The I-lottery revenue stream that is meant to be used as a means to fund debt-free community college for all high school graduates isn’t nearly enough to cover the expected cost of the current law, McCaw said. The expected cost was $19 million and the I-lottery revenue is below $2 million.

Lamont’s plan would offer debt-free community college to those who have graduated high school in the past 12 months and have a family income at or below the state median income, which is around $75,000 annually.

Child Care Expense Reimbursement For Those Running For Office

Lamont is pushing for those using the Citizen’s Election Program to be allowed to have childcare costs reimbursed when they are incurred in order to campaign.

Economy and Business Bouncing Back In CT, Lamont Says In Speech

“Three years ago, credit rating agencies downgraded our state with headlines like the Wall Street Journal that asked “What’s the matter with Connecticut?” Today, the Wall Street Journal has changed its tone. “The state has dug a deep hole--maybe it has now stopped digging,” Lamont said.

“Rating agencies and investors have upgraded their outlook for Connecticut for the first time in 18 years, from neutral to positive – saving the state and its taxpayers tens of millions in borrowing costs,” Lamont said.

“Economic growth picked up last year. That means businesses and young families are now giving Connecticut a second look. They’re talking about Connecticut—and we’re responding,” Lamont added.

Lamont said there is a lot to be optimistic about concerning the state's business climate.

"In the last year, I have personally visited nearly one-hundred businesses – from our state’s largest employers like Electric Boat – which is boasting over 12,000 Connecticut employees – the most in 30 years – and will be hiring 18,000 over the next decade."

"We’ve also visited smaller start-ups like the Little House Brewery in Chester, one of 100 local craft breweries launched in Connecticut."

"Talk about changing perceptions – Bloomberg News recognized Connecticut as the 4th most innovative economy in the country--and I never stop at 4th best. Here in Hartford, the capital region is home to companies that constantly innovate like Infosys, a global digital services company that has already hired nearly 600 Connecticut employees."

"How about GalaxE Solutions, a pioneer in IT analytics that just announced it is bringing hundreds of jobs to Hartford and helping jumpstart Cigna’s next-gen personalized medicine?"

"Now a short train ride away is New Haven. Yale-New Haven Hospital is breaking ground on a state-of-the-art neuroscience center and commercial developers are connecting the downtown with new buildings that will offer modern lab and incubator space at a fraction of what it would cost in Boston or New York so our STEM students, our PhDs and our emerging companies can achieve their dreams right here. New Haven is exploding with growth, building permits have more than doubled – and 2020 will be the city’s biggest year yet!"

"Over in Guilford, serial entrepreneur Jonathan Rothberg and the ButterflyiQ have the FDA approvals to turn your smartphone into a professional-grade ultrasound imaging device, increasing access to affordable healthcare diagnostics in Connecticut and beyond. Jonathan, thank you for innovating right here in Connecticut."

"Remember those headlines from Stamford about the world’s largest finance trading floor sitting vacant? No longer! World Wrestling Entertainment has taken it over and will be turning it into one of the world’s largest digital production studios. Citywide, there’s more than $6 billion in development underway – just in Stamford, alone!"

“Yes Connecticut, we got our mojo back, but that only matters if we have an economy that works for everybody, starting with a vibrant and growing middle class,” Lamont concludes.