CT Economy 'A Coiled Spring' As Coronavirus Wanes: Lamont

CONNECTICUT — As the state economy prepares to make its next big lurch forward toward normalcy, Gov. Ned Lamont said his biggest worry is a new coronavirus variant as yet unseen in the state.

The new player, named B.1.526, is "coming in through New York City," Lamont said, and contains a mutation that may weaken the effectiveness of vaccines.

Lamont said he remained confident that the move to eliminate capacity restrictions for businesses and restaurants beginning Friday was the right one, as "the most vulnerable in our population have been vaccinated, or will be vaccinated in less than a week."

Coronavirus cases have "trended up" over the past few days Lamont said, but concluded "we are going to have a pretty good spring-summer." He defended his "simpler" age-based vaccine rollout as "a lot less open to the 'games' that are going on elsewhere," noting that getting the vaccines to "underserved populations" remained his top priority.

Lamont made his remarks during the annual Connecticut Business Day web conference, hosted by the Connecticut Business and Industry Association on Tuesday.

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"The number one priority for me is our schools," Lamont told the business leaders. "Our job now is to get kids who are reluctant back into schools despite their parents who are reluctant to get them vaccinated."

Lamont said he hoped to start the school year up again in July, but "not necessarily in the classrooms."

"A lot of that is going to be tied to internships, workforce and summer camps,"Lamont said. He asked the CBIA members to think about ways school children could be "introduced to what you do with your business, make that part of their they're learning, going forward."

The governor said he was resolved not to raise taxes, despite how the landscape was shifting in neighboring states.

"We don't need higher taxes, I know New York and some other places are pushing that way hard," Lamont said.

He singled out the so-called "mansion tax" bill, introduced by Connecticut Democrats, which would create a $1 million state-wide tax on residential and commercial real estate properties. If signed into law, the tax could generate almost $70 million for the state, according to its proponents. Lamont said the proposed tax is not needed, and "is not going anywhere" within the legislature.

A large contributor to the governor's tax confidence was the cash injection promised by the American Rescue Plan Act, he said. The new legislation represents around $10 billion to the State of the Connecticut, although most of that comes as direct payment to residents in the form of stimulus checks and enhanced unemployment benefits.

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Lamont says he will be working very closely with state legislators, school superintendents and mayors to ensure that the money the state receives as part of the American Rescue Act is allocated wisely. There's no rush to budget it all immediately, as the Feds are allowing time for the funds to make their way onto the ledger: two years for education, and three years for the state and municipal budget lines.

The 50,000 people who moved to Connecticut last year are another source of fiscal confidence, Lamont said. All those new residents will grow the tax base and obviate the need for new tax increases, according to the governor, who envisioned the influx to continue over the next year as the "big millennial cities" lose their allure.

The new taxpayers may foot the bill for much of the future, but they won't slay all the old nemeses.

"I still have to figure out how to pay for our Transportation Fund," Lamont said. "All of our gasoline tax revenues are going to pay off past due bonded expenses."

He said he anticipates a "significant" transportation bill to be shepherded into law by Transportation Secretary Pete Buttigieg that will ease some of the pain, but that the state still lacks a scheme for recurring revenue.

The governor said the state's goal was to inject some "predictability and stability" into the business community, even while the state debt and pension fund remain "unfunded liabilities."

"Another big thing we are getting out of this federal money is childcare and day care," Lamont said, asking the business leaders to help state officials formulate how the money could best be applied in those sectors to swiftly get residents back to work.

"For the near term, we can pay for that," Lamont said, and called his state's economy "a coiled spring" on the verge of snapping back over "the next 3-6 months."

The state "got hit" in the restaurant and hospitality sectors, according to Lamont, which had a big effect on unemployment. Connecticut's December 2020 seasonally adjusted nonfarm employment monthly levels were also revised down by 20,000, according to the latest report from the state Department of Labor.

But that's nothing, compared to what happened to the other guys.

"In terms of GDP, we have much more of our economy open than our peer states," Lamont said. "That's helped our income tax, that's stabilized our sales tax. From a budget point of view, we're in good shape.