Connecticut
The history of Connecticut’s spending cap, explained
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.
The spending cap first was enacted as a companion to the new income tax in 1991.
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A cap in statutory form could easily be repealed or revised simply with the passage of another law.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.
More than 80% of Connecticut voters approved the constitutional amendment mandating a spending cap.
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.
Legislators and governors have routinely struggled to live within the cap’s limits.
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.
In 2015, then-Attorney General George Jepsen ruled that the statutory cap is unenforceable.
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.
In 2017, legislators passed a more stringent spending cap, and used a new tactic called “bond lock” to protect it from tampering.
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.
Connecticut
Map shows where police say CT man set house fire, led cops in chase amid crime spree
Jalen Rasheed Skeete, 24, of Bridgeport, is accused of eluding state police multiple times Friday morning, including a during a police pursuit that began in Newtown and ended in Brookfield, according to state police.
State police said Skeete is also a suspect in Friday’s home invasion and fire at a home in the 100 block of Sylvan Avenue in Waterbury.
Waterbury Police Sgt. Joseph Morais said the incident remains under investigation.
Responding firefighters found heavy fire in the back part of the house, overtaking both the first and second floors, according to fire officials.
Fire officials said the house was left uninhabitable but is not a total loss. It has heavy damage in the back and smoke and water damage everywhere else, they said.
Earlier in the day on Friday at around 7:15 a.m., Skeete allegedly fled from police in the parking lot of a Prospect school and struck a police cruiser.
After the fire, state police said he again evaded capture during pursuits in Newtown before being stopped in Brookfield.
Skeete is being held on $250,000 bond on charges by state police in the evading in Prospect and the pursuit in Brookfield. He is charged with first-degree reckless endangerment, interfering with police, reckless driving, engaging in a police pursuit and evading responsibility.
Connecticut
16-year-old New Haven girl seriously injured in Route 15 moped crash
NEW CANAAN, Conn. (WTNH) — A New Haven teen suffered life-threatening injuries after being thrown from a moped on Route 15 Monday afternoon, according to Connecticut State Police.
State police said the 16-year-old girl was a passenger on a black moped being driven by a 17-year-old boy, also from New Haven.
They were driving southbound on Route 15 when the driver lost control of the moped while moving into a lane for the Exit 13 off ramp.
As a result of the collision, the 16-year-old passenger was thrown from the moped.
She was transported to Norwalk Hospital first, then Yale New Haven Hospital for a higher level of care, state police said.
The driver had no apparent injury, according to a report from state police.
Route 15 South was closed for more than three hours as the incident was investigated. The collision remains under investigation.
Connecticut
Study: Resource scarcity, bureaucracy barriers to natural gas use
Last week, the Connecticut Office of Legislative Research published a report about the hurdles to expanding natural gas use in Connecticut.
“There are obstacles to increasing Connecticut’s natural gas supply at each stage of the supply chain,” the report, which is authored by Senior Legislative Attorney Jessica Schaeffer-Helmecki, states. “The largest obstacle to increasing natural gas production is the fact that, due to Connecticut’s geology, it has minimal natural gas resources that are highly unlikely to be developed. The New England region is also geologically unable to store natural gas underground for use during periods of peak demand.”
Schaeffer-Helmecki found that, because of the limited natural gas resources in Connecticut, the state would have to rely on interstate pipelines to expand its natural gas use. This would require navigating multiple federal and state agencies, which is difficult, both because of the bureaucratic process and changing regulations. It also might require seizing land through eminent domain, which is another protracted process that would have to go through courts. Finally, Schaeffer-Helmecki predicts both public pushback and difficulty securing a customer base, meaning future projects may not be financially viable.
There are currently three pipelines that carry natural gas to Connecticut: the Algonquin Gas Transmission, which originates in New Jersey, the Iroquois Gas Transmission System, which originates in northern New York, and the Tennessee Gas Transmission, which draws natural gas from multiple places in the Gulf of America. Additionally, there is a proposed pipeline called the Constitution, which would run 125 miles from New York to Pennsylvania.
“Local distribution company (LDC; e.g., CT Natural Gas or Eversource) demand can be difficult to predict,” Schaeffer-Helmecki’s report states. “The largest natural gas takers (electric generators) typically do not enter into long term capacity agreements.”
Despite this, demand for natural gas in Connecticut is growing, especially in the winter, according to an S&P Global study that was published earlier this month.
This study identified some of the same obstacles that Schaeffer-Helmecki’s report did, including limited resources in the region and minimal construction.
“In the past, Connecticut created an initiative aimed at encouraging natural gas transmission pipeline companies to increase their capacity into the state and region by limiting some of the financial risk of the expansion,” Schaeffer-Helmecki’s report states. “However, the multi-state procurement process did not occur once a court overruled Massachusetts’ participation in it, and the Public Utilities Regulatory Authority (PURA) cancelled the customer conversion program in 2022 finding, among other things, an insufficient number of new customers enrolled in the program to justify the level of ratepayer subsidies that were needed to continue it.”
This S&P Global study found that, if the barriers to constructing the Constitution can be overcome, the pipeline would save ratepayers in the region a net $8.5 billion in its first 15 years of use. It would also generate an additional $8.5 billion in revenue for businesses in Connecticut, Rhode Island, New York, and Massachusetts during that time period.
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