For more than 30 years, one of the single largest factors shaping Connecticut’s budget has been its spending cap.
Legislatures and governors have trimmed countless programs to stay under the cap, crafted several maneuvers to circumvent it, and — on some occasions — exceeded it in a very public and legal fashion.
Here’s what you need to know about the cap that some officials love, others hate, and everyone has voted to keep in place, at least through 2028.
Legislators, anticipating public outrage over the new broad-based state income tax, enacted a statutory system that capped most areas of state spending based on formulas tied to annual growth in household income and inflation. Officials can use which metric allows the most growth in any given year.
And to assure voters these new controls were here to stay, lawmakers also endorsed a constitutional amendment mandating a cap on the 1992 election ballot.
A cap in statutory form could easily be repealed or revised simply with the passage of another law. But an amendment only can be removed or modified with another amendment.
But the 1992 amendment didn’t spell out the full cap system. It set out the basics. General budget expenditures would be controlled in some way involving income growth and inflation. Payments on bonded debt would be cap exempt.
The amendment added that it would be up to the General Assembly to define the details by law.
By 1993, the General Assembly hadn’t yet implemented a new constitutional cap. That year, then-Attorney General Richard Blumenthal wrote in an opinion that legislators, having neglected to create a new system, had made the original, statutory cap into the constitutional cap by default.
The original version of the spending cap allowed for the legislature and governor to legally exceed it if the governor declares a state of emergency and receives approval by a three-fifths vote from both the House and the Senate.
During the tenure of Gov. John G. Rowland, who served from 1995 until he resigned in 2004, the legislature used that mechanism multiple times to spend surplus dollars near the end of a fiscal year.
By the mid-2000s, growing pension costs and modest economic growth were making it harder to live with the cap.
In both 2005 and 2007, Gov. M. Jodi Rell and legislators launched new biennial budgets that legally exceeded the cap from the first day of the fiscal cycle. That tactic had not been used before and has not been used since.
This was done to bolster new initiatives for health care, social services and municipal aid.
Jepsen disagreed with Blumenthal and ruled that the 1991 statutory cap did not carry the full weight of a constitutional amendment — rather, it was simply a law that could be repealed or amended at any time (such as, for example, by passing a budget that went over the spending cap’s limits.)
He said legislators can’t implement a spending cap amendment by default; rather, they must proactively implement one. The constitutional cap actually had never been fully established by the legislature.
As majority Democrats struggled to adopt a new state budget in what would become a nine-month-long struggle, Republicans would agree to help craft a bipartisan compromise.
One of the GOP’s conditions was a tighter series of fiscal guardrails. The new spending cap would eliminate an older exemption for aid to poor communities, and would phase out another exemption for contributions to pension funds.
But while Democrats and Republicans wanted to ensure future legislatures couldn’t easily repeal this new cap, neither side wanted to attempt another constitutional amendment.
They found their solution in the billions of dollars Connecticut borrows annually by issuing bonds on Wall Street. The money is used to fund initiatives like road and highway projects, municipal school construction and capital projects at public colleges and universities.
Those bonds include covenants that spell out interest rates, how funds will be repaid, and other details. These covenants effectively are contracts between the state and its investors, and, typically, one legislature cannot simply revise a contract established by previous lawmakers.
Lawmakers wrote into those bond covenants that their new fiscal guardrails would remain in place and, with limited exceptions, not be adjusted for five years.
The guardrails were bond locked into place through June 30, 2023. Last February, the legislature unanimously voted to extend the guardrails with a 10-year provision that the legislature can abandon after five years by passing a resolution.
Keith M. Phaneuf and Gabby DeBenedictis are reporters for The Connecticut Mirror (https://ctmirror.org/ ). Copyright 2024 © The Connecticut Mirror.
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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