This is the last of a six-part series on the constitutionality of the state’s “budget guardrails.” Here are Parts One, Two, Three, Four and Five.
If Connecticut’s budget guardrail statutes were determined to be unconstitutional, what are the implications for state budget policy? The following outcomes seem most likely and desirable:
1. The guardrails statute in Public Act 23-1 would revert to the status of ordinary legislation, amendable by majority votes and subject to gubernatorial veto.
2. The spending cap in the Connecticut Constitution, including the three-fifths vote “escape clause” and the three adopted definitions in state statute, would remain in force without alteration.
3. The three-fifths supermajority vote requirement in the guardrail statutes would be severable from the remainder of the statute.
4. Absent the severed supermajority vote provisions and the nullified bond covenant, the remainder of the fiscal statutes would continue to be implemented as currently done by the Office of Fiscal Analysis and the Office of Policy and Management, unless and until these statutes are amended.
5. The priority funding of the rainy day fund and prepayment of pension debt would continue under the status quo, unless and until amended by law.
6. The budget impacts of revising the guardrails will be determined by future actions of lawmakers. All the statutory caps in P.A. 23-1 could be amended by a majority vote except to the extent covered by the constitutional spending cap in article Third, Sec. 18c.
Alex Knopp7. The General Assembly and governor would be expected to carefully project how their fiscal decisions going forward will impact Wall Street’s credit rating agencies.
8. The bond lock should be recognized as “null and void” by legislative repeal or by exercising the “escape clause” to avoid unintended consequences.
9. The State Treasurer should seek immediate legislation relieving him of the obligation to insert the bond lock covenant in future bond sales.
10. Assuming that there is at least some consensus of good faith acknowledgement of constitutional flaws in the statutory guardrails, the threshold question of whether any changes should be made will have been definitively answered, allowing everyone to move on. In response, House Speaker Matt Ritter, Senate President Martin Looney and Gov. Ned Lamont might convene an “all parties” negotiation to address post-guardrail changes to the FY 26-27 state budget and to hammer out new flexible fiscal policies to replace the old inflexible statutory guardrails.
The prospects for a successful negotiation seem high despite current bickering because there is ample political and policy consensus that some level of fiscal controls should remain in place. The CT Voices report and the Yale Tobin/Connecticut Project report both propose sensible fiscal revisions, but neither group advocate for eliminating fiscal controls all together. Governor Lamont in particular should take credit for the fact that “guardrails” of some type have now become a permanent part of Connecticut’s fiscal infrastructure because of his insistence.
The General Assembly should now approve what it neglected to do in 2017 or in 2023: adopt a “best practices” approach by establishing a new permanent Fiscal Commission of budget experts, stakeholders, and representatives of municipal, business and nonprofit leaders, to monitor on a regular basis the productivity, responsiveness and efficiency of ongoing fiscal policies. The Commission’s reports should contain fiscal analysis on the authoritative level of the OFA’s Fiscal Accountability Reports and recommendations on the data-driven policy level of the recent guardrail reports from the Yale Tobin Center and CT Voices for Children.
Consequences for bond purchasers
What might be the legal consequences for bondholders and the state if the bond lock covenant is unconstitutional?
Experienced bond counsel would need to be consulted about extracting the state from these entanglements. The following assurances could minimize if not eliminate any serious risk to the state from a bondholder lawsuit.
First, bondholder investments are sufficiently protected under the conventional bond covenant from the State of Connecticut to pay principal and interest on the bonds, guaranteed by the full faith and credit of the state. The primary security pledge received by the bondholders has not been impaired.
Second, bondholders will still receive extra protection from the risks of the normal state budgeting cycle by the constitutional spending cap which exempts in article Third, Sec. 18b “expenditures for the payment of bonds, notes or other evidences of indebtedness” from the cap.
Third, the exercise of a public entity’s sovereignty in limited circumstances has been upheld by courts as a defense or justification for post-sale changes to bond covenants. A well-known example excused a municipality’s non-performance with its pledge to dedicate casino revenues to pay bondholder debt service after the city’s approval of construction of a new casino was rejected by a voter referendum. A finding of unconstitutionality would leave the debt service obligation intact even if the bond lock were nullified.
Fourth and most importantly, the General Assembly was never constitutionally authorized under the “anti-delegation legislative rule” to issue the bond lock covenant in the first place. There is no “breach” for damages if the covenant was void from the start and there is no claim for “damage” if the debt service is paid.
Fifth, future assessments by Wall Street’s credit rating agencies will largely depend on the budget policies adopted in the post-guardrail period. No other state has adopted a bond lock covenant. Wall Street has welcomed Connecticut’s fiscal results but has not been clamoring for other states to replicate the bond lock.
Sixth, a final option for the state to extricate itself from the any bond covenant contract disputes without even the appearance of a technical default is for the General Assembly and the governor to exercise the bond covenant’s procedural “escape clause” for each of the remaining fiscal years on the 2024-2028 covenants and not to renew the covenants in 2029 for the optional second five years.
Conclusion and a note of judicial caution
In this series of opinion essays I have presented a “big picture” analysis of the unconstitutionality of the budget guardrails to stimulate the kind of legal research and discussion that regrettably has been avoided since 2017. As an obvious caveat, these essays were never intended to take the place of a legal brief.
Asking a Connecticut court to declare a state statute unconstitutional can be a daunting task. A 1986 court ruling stated: “It is well settled that a party who challenges a statute on constitutional grounds has no easy burden, for every intendment will be made in favor of constitutionality, and invalidity must be established beyond a reasonable doubt.”
That is why, in the end, it is my hope is that without formal judicial intervention the General Assembly and the governor will find either in these essays or in a legal opinion from the Attorney General or in an advisory opinion from the Legislative Commissioner’s Office enough of a persuasive legal rationale to conclude that the Connecticut Constitution requires a different process to adopt future state budgets, unencumbered by questionable statutory budget guardrails that may be out of date or out of order.
Seeking to have the guardrails recognized as unconstitutional is a weighty matter not to be undertaken frivolously. But continuing to adopt state budgets outside of the bedrock rules enshrined in the state constitution also carries serious risks and is likely to cause damage to trust in government and lead to more factional disunity.
Although the guardrails deserve their share of recognition for addressing the depleted rainy day fund and advancing payments of pension debt, let’s not forget that fiscal performance improved in every state between 2021 and 2023. During that period, 48 states cut taxes, and many built up their rainy day funds. Only Connecticut imposed a bond lock.
Connecticut does not need to choose between respecting its Constitution and enacting fiscally responsible budgets. It can and should do both. The statutes, guardrails and budgets reviewed in this opinion series are important elements of governing, but in the end the most precious commitment that all state elected officials make is the oath they take to “support” the Connecticut Constitution.
It’s a scheme made famous by a nearly 30-year-old episode of the sitcom Seinfeld.
Hoping to earn a quick buck, two characters load a mail truck full of soda bottles and beer cans purchased with a redeemable 5-cent deposit in New York, before traveling to Michigan, where they can be recycled for 10 cents apiece. With few thousand cans, they calculate, the trip will earn a decent profit. In the end, the plan fell apart.
But after Connecticut raised the value of its own bottle deposits to 10 cents in 2024, officials say, they were caught off guard by a flood of such fraudulent returns coming in from out of state. Redemption rates have reached 97%, and some beverage distributors have reported millions of dollars in losses as a result of having to pay out for excess returns of their products.
On Thursday, state lawmakers passed an emergency bill to crack down on illegal returns by increasing fines, requiring redemption centers to keep track of bulk drop-offs and allowing local police to go after out-of-state violators.
“I’m heartbroken,” said House Speaker Matt Ritter, D-Hartford, who supported the effort to increase deposits to 10 cents and expand the number of items eligible for redemption. “I spent a lot of political capital to get the bottle bill passed in 2021, and never in a million years did I think that New York, New Jersey and Rhode Island residents would return so many bottles.”
The legislation, Senate Bill 299, would increase fines for violating the bottle bill law from $50 to $500 on a first offense. For third and subsequent offenses, the penalty would increase from $250 to $2,000 and misdemeanor punishable by up to one year in prison.
In addition, it requires redemption centers to be licensed by the state’s Department of Energy and Environmental Protection (previously, those businesses were only required to register with DEEP). As a condition of their license, redemption centers must keep records of anyone seeking to redeem more than 1,000 bottles and cans in a single day.
Anyone not affiliated with a qualified nonprofit would be prohibited from redeeming more than 4,000 bottles a day, down from the previous limit of 5,000.
The bill also seeks to pressure some larger redemption centers into adopting automated scanning technologies, such as reverse vending machines, by temporarily lowering the handling fee that is paid on each beverage container processed by those centers.
The bill easily passed the Senate on Wednesday and the House on Thursday on its way to Gov. Ned Lamont.
While the bill drew bipartisan support, Republicans described it as a temporary fix to a growing problem.
House Minority Leader Vincent Candelora, R-North Branford, called the switch to 10-cent deposits an “unmitigated disaster” and said he believed out-of-state redemption centers were offloading much of their inventory within Connecticut.
“The sheer quantity that is being redeemed in the state of Connecticut, this isn’t two people putting cans into a post office truck,” Candelora said. “This is far more organized than that.”
The impact of those excess returns is felt mostly by the state’s wholesale beverage distributors, who initiate the redemption process by collecting an additional 10 cents on every eligible bottle and can they sell to supermarkets, liquor stores and other retailers within Connecticut. The distributors are required to pay that money back — plus a handling fee — once the containers are returned to the store or a redemption center.
According to the state’s Department of Revenue Services, nearly 12% of wholesalers reported having to pay out more redemptions than they collected in deposits in 2025. Those losses totaled $11.3 million.
Peter Gallo, the vice president of Star Distributors in West Haven, said his company’s losses alone have totaled more than $2 million since the increase on deposits went into effect two years ago. As time goes on, he said, the deficit has only grown.
“We’re hoping we can get something fixed here, because it’s a tough pill to be holding on to debt that we should get paid for,” Gallo said.
Still, officials say they have no way of tracking precisely how many of the roughly 2 billion containers that were redeemed in the state last year were illegally brought in from other states. That’s because most products lack any kind of identifiable marking indicating where they were sold.
“There’s no way to tell right now. That’s one of the core issues here,” said state Rep. John-Michael Parker, D-Madison, who co-chairs the legislature’s Environment Committee.
Parker said the issue could be solved if product labels were printed with a specific barcode or other feature that would be unique to Connecticut. Such a solution, for now, has faced technological challenges and pushback from the beverage industry, he said.
Not everyone involved in the handling, sorting and redemption of bottles is happy about the upcoming changes — or the process by which they were approved.
Francis Bartolomeo, the owner of a Fran’s Cans and Bart’s Bottles in Watertown, said he was only made aware of the legislation on Monday from a fellow redemption center owner. Since then, he said, he’s been contacting his legislators to oppose the bill and was frustrated by the lack of a public hearing.
“I know other people are as flabbergasted as I am because they don’t know where it comes out of,” Bartolomeo said “It’s a one sided affair, really.”
Bartolomeo said one of his biggest concerns with the bill is the $2,500 annual licensing fee that it would place on redemption centers. While he agreed that out-of-state redemptions are a problem, he said it should be up to the state to improve enforcement.
“We’re cleaning up the mess, and we’re going to end up being penalized,” Bartolomeo said. “Get rid of it and go back to 5 cents if it’s that big of a hindrance, but don’t penalize the redemption centers for what you imposed.”
Lynn Little of New Milford Redemption Center supports the increased penalties but believes the solution ultimately lies with better labeling by the distributors. She is also frustrated by the volume caps after the state initially gave grants to residents looking to open their own bottle redemption businesses.
“They’re taking a volume business, because any business where you make 3 cents per unit (the average handling fee) is a volume business, and limiting the volume we can take in, you’re crushing small businesses,” Little said.
Ritter said that he opposed a move back to the 5-cent deposit, which he noted was increased to encourage recycling. However, he said the current situation has become politically untenable and puts the state at risk of a lawsuit from distributors.
“We’re getting to a point where we’re going to lose the bottle bill,” Ritter said. “If we got sued in court, I think we’d lose.”
NEW BRITAIN, CT — Stanley Black & Decker on Thursday said it has decided to close its manufacturing facility in New Britain.
Debora Raymond, vice president of external communications for the manufacturer, said the decision is a result of a “structural decline in demand for single-sided tape measures.”
The New Britain facility predominantly makes these products, according to Raymond.
“These products are quickly becoming obsolete in the markets we serve,” Raymond said, via an emailed statement Thursday.
The decision is expected to impact approximately 300 employees, according to Raymond.
“We are focused on supporting impacted employees through this transition, including providing options for employment at other facilities, severance, and job placement support services for both salaried and hourly employees,” Raymond said.
As of Thursday at 4:30 p.m., no Worker Adjustment and Retraining Notification (WARN) Act notice had been filed with the state Department of Labor.
The company’s corporate headquarters remains at 1000 Stanley Dr., New Britain.
Gov. Ned Lamont released the following statement on the decision:
“Although Stanley has made the decision to discontinue operations for manufacturing outdated products, a change in workforce opportunities is difficult for employees, their families, and any community.,” Lamont said. “However, I am hopeful that these skilled workers will be repurposed with the help of Stanley Black & Decker, a company that will still proudly be headquartered here in Connecticut. My administration is working closely with local and state leaders to support affected workers and to reimagine the factory site so it can continue to create opportunity and strengthen New Britain’s economic future.”
New Britain Mayor Bobby Sanchez said he is “deeply disappointed” the company will be closing its Myrtle Street operations.
“For generations, Stanley Works has been part of the fabric of our city, providing good-paying jobs, supporting families, and helping build New Britain’s proud reputation as the ‘Hardware City,’” Sanchez said.
According to the mayor, his office’s immediate focus is on helping affected workers and their families. The mayor has been in contact with Lamont’s office, and they will be working closely to make sure employees have access to job placement services, retraining opportunities and support, Sanchez said.
“We will continue aggressively pursuing economic development opportunities and attracting businesses that are looking for a true community partner, a city ready to collaborate, innovate and grow alongside them,” Sanchez said. “New Britain has reinvented itself before, and we will do so again.”
Stanley Black & Decker, founded in 1843, operates manufacturing facilities worldwide, according to its website. It reports having 43,500 employees globally, and makes an array of products, such as power tools and equipment, hand tools, and fasteners.
Newly released police video shows former WWE executive Vince McMahon ram his luxury sports car into the rear end of another vehicle on a Connecticut highway last summer as he was being followed by a state trooper.
McMahon, now 80, was driving his 2024 Bentley Continental GT at more than 100 mph on the Merritt Parkway when he crashed in the town of Westport, according to state police.
A trooper’s dashcam video shows McMahon accelerating away, then braking too late to avoid crashing into the back of a BMW. The Bentley then swerves into a guardrail and careens back across the highway, creating a cloud of dirt and car parts.
“Why were you driving all over 100 mph?” state police Detective Maxwell Robins asked McMahon after catching up to the wrecked Bentley, which can cost over $300,000.
“I got my granddaughter’s birthday” McMahon replied, explaining he was on his way to see her. The encounter was recorded on police bodycam video.
No one was seriously injured in the July 24 crash, which happened the same day that WWE legend Hulk Hogan died of a heart attack in Florida.
Besides damage to the rear of the BMW, another vehicle driving on the opposite side of the parkway was struck by flying debris. The driver of that third car happened to be wearing a WWE shirt, according to the police video.
McMahon was cited for reckless driving and following too closely. A state judge in October allowed McMahon to enter a pretrial probation program that will result in the charges being erased from his record next October if he successfully completes the program. He was also ordered to make a $1,000 charitable contribution.
McMahon’s lawyer, Mark Sherman, said the crash was just an accident.
“Not every car accident is a crime,” Sherman said. “Vince’s primary concern during this case was for the other drivers and is appreciative that the court saw this more of an accident than a crime that needed to be prosecuted.”
State police said Robins was trying to catch up to McMahon on the parkway and clock his speed before pulling him over. They said the incident was not a pursuit, which happens when police chase someone trying to flee officers. They also said it did not appear McMahon was trying to escape — though in the video the detective suggests otherwise.
“I’m trying to catch up to you and you keep taking off,” Robins says.
“No, no no. I’m not trying to outrun you,” McMahon says.
An accident information summary provided to the media shortly after the crash did not mention that a trooper was following McMahon.
The Associated Press obtained the videos Wednesday through a public records request. They were first obtained by The Sun newspaper.
The trooper’s bodycam video also shows him asking McMahon whether he was looking at his phone when the crash happened. McMahon said he was not and adds that he hadn’t driven his car in a long time.
After Robins tells McMahon that his car is fast, McMahon replies, “Yeah, too (expletive) fast.”
The videos also show McMahon talking to the driver he rear-ended. Barbara Doran, of New York City, told the AP last summer that McMahon expressed his concern for her and was glad she was OK. She said she was heading to a ferry to Martha’s Vineyard at the time of the crash.
After McMahon was given the traffic summons, he shook hands with Robins and another trooper and they wished him well.
McMahon stepped down as WWE’s CEO in 2022 amid a company investigation into sexual misconduct allegations. He also resigned as executive chairman of the board of directors of TKO Group Holdings, the parent company of WWE, in 2024, a day after a former WWE employee filed a sexual abuse lawsuit against him. McMahon has denied the allegations. The lawsuit remains pending.
McMahon bought what was then the World Wrestling Federation in 1982 and transformed it from a regional wrestling company into a worldwide phenomenon. Besides running the company with his wife, Linda, who is now the U.S. education secretary, he also performed at WWE events as himself.
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