Hartford Business Journal

22 HARTFORDBUSINESS.COM | DECEMBER 19, 2022 5 WE WATCHED Gov. Ned Lamont in his state Capitol office in Hartford. HBJ PHOTO | STEVE LASCHEVER Coming off reelection, Lamont eyes tax cuts in 2023 as he touts budget stability By Greg Bordonaro gbordonaro@hartfordbusiness.com G ov. Ned Lamont points to several significant accomplish- ments over the past year, but there's little doubt about what stood out most — his wide-margin electoral victory in November over GOP guber- natorial candidate Bob Stefanowski that secured his second, four-year term in office. "I think the vote reflects the fact that people feel like the state is on a good trajectory, that we're slowly getting our fiscal house in order," Lamont told the Hartford Business Journal in a recent interview. "People recognize that we're slowly creating jobs instead of shedding jobs. We're slowly getting new businesses, not less businesses." As he prepares for his second term in office, Lamont is working behind the scenes on a new legislative agenda, where several key issues are likely to be addressed. Lamont told HBJ he is considering several tax policy proposals next year, including allowing the expiring corporate business tax surcharge, an extra cost the business community has long lobbied against, to sunset. He also said he is considering a middle class income tax cut proposal, likely targeted at people who earn up to $150,000. Lamont said his main priority in 2023 will be to promote economic growth and prosperity, and the poten- tial tax cuts are part of that effort. He also expressed the importance of keeping the state's fiscal house in order as a precondition to growth, and cautioned that any tax cut proposals will need to be negotiated with the state legislature. "I want to focus everything we do on economic growth," Lamont said. Looking back The Lamont administration points to several key successes in 2022, including working with the Demo- crat-controlled legislature to pass several tax-relief measures. Most recently, Lamont signed into law a bill that extends through December Connecticut's gasoline tax holiday, which waives the state's 25-cents-per-gallon retail tax on gasoline. After that, the tax will be gradually reinstated by May 1. The bigger splash occurred during the 2022 legislative session, when Lamont and the legislature approved $600 million in tax cuts, including increasing the child tax credit and cutting the maximum car tax rate from 42 mills to 32.46 mills. Lamont has said another key accom- plishment was continuing to oversee budget stability. The state reported a $4.3-billion surplus in fiscal 2021 and has a $3.3-billion rainy day fund. By the end of this year, the state will have also paid down over $5 billion in long-term pension debt. That included a $2.8 billion pension payment made in September — the largest ever in state history. Connecticut is also on pace for another 10-figure surplus in the current fiscal year. Wall Street has looked fondly on the state's newfound fiscal stability. Standard & Poor's in November raised Connecticut's general obli- gation bond credit rating, following similar moves made in 2021 by Moody's, Fitch and Kroll. Filling jobs Workforce development was also a key focus over the past 12 months, especially with Connecticut employers reporting over 100,000 job openings throughout 2022. Lamont last summer announced the launch of the $70-million Career- ConneCT program, which offers free job training in high-demand industries and promises to graduate workers quickly for immediately available jobs. The program — administered by the state Office of Workforce Strategy and funded by federal American Rescue Plan Act dollars — gives potential job seekers access to reskilling or upskilling in manufac- turing, information technology, health care, infrastructure and clean energy. It also provides connections to support services like child care, transportation and career advising. "We are building CareerConneCT to become one of the largest work- force development initiatives ever executed in Connecticut," Lamont said. The governor also backed a $150- million investment in the state's early childhood system, in part to expand the number of child-care options available in the state. Lack of afford- able child care became a major issue during the pandemic and has been blamed as one of the causes of the labor shortage. Some pushback The business community hasn't viewed all of Lamont's accomplish- ments as positives. In fact, the Connecticut Business & Industry Association in May called the 2022 legislative session a "disap- pointment," particularly for small businesses, despite a historic tax cut that largely benefited residents. The CBIA criticized Lamont and the General Assembly for not setting aside more money to pay down the state's COVID-related unemployment insurance debt and failing to restore the pass-through entity tax credit to its original level. The CBIA also recently joined a federal lawsuit challenging the state's recently passed captive audience law, which prohibits employers from holding mandatory employee meet- ings addressing unionization. Lamont supported the measure. The business group did credit Lamont and the legislature for the tax cuts, budget stability, long-term debt reduction, workforce develop- ment investment, and expansion of the small business manufacturing apprenticeship tax credit. NED LAMONT Governor State of Connecticut Education: Bachelor's degree in sociology, Harvard College; MBA, Yale School of Management Age: 68

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