Keith M. Phaneuf
Gov. Ned Lamont faces a tricky situation.
He has a statutory duty to present his latest budget and bonding proposals Wednesday to the legislature. But if he releases too many details — specifically any financing for recreational, social service or other community projects benefitting legislators backing his truck-tolling plan — then the latter could be at risk.
Lamont held up passage of a two-year bonding plan last May because, he said, the state couldn’t commit to long-term borrowing infrastructure projects until they knew how much revenue could come from a proposed tolling bill.
He said it made no sense to resolve bonding before transportation, because without tolls to support an infrastructure rebuild, Connecticut likely would have to redirect bonding away from other areas, such as municipal school construction and capital projects at public universities.
There will be “no bonding bill, certainly, until we know how we’re going to pay for transportation,” Lamont told reporters as late as Monday.
The governor, whose original proposal to toll cars and trucks bogged down last May, has been trying since late November to win support for tolling only large, commercial trucks. And Republican legislative leaders, who oppose tolls, already have voiced suspicions that Lamont may direct bonding to entice lawmakers on the fence about tolls to his side.
He told reporters last week that he’d reached a tentative agreement with legislative leaders on a two-year bond plan, to be voted upon at the same time as tolls.
But while there was talk of possible votes on the tolls proposal in December, January and even the first week of February, Democratic leaders in the House and Senate recently announced there would be no vote before Feb. 10 — five days after Lamont’s latest budget and bonding plans are due.
In even-numbered years, the governor is supposed to recommend any adjustments to the second year of the two-year budget and bonding plans when the regular legislative session convenes in February. But when he and lawmakers agreed last May on a new two-year state budget, they didn’t act on a complementary bonding plan. Because no bonding package was approved last spring, Lamont is expected to release proposals Wednesday both for the remainder of this fiscal year, and for 2020-21.Lamont didn’t release many details in advance but said he had to compromise and agree to more borrowing than he wanted. But he also insisted that when details were released, it still would show progress on his “debt diet” program to scale back state borrowing compared with that of the past decade.
Chris McClure, spokesman for the governor’s budget office, wrote in a statement Tuesday that Wednesday’s bond presentation will reflect the tentative deal Lamont struck with leaders of the House and Senate’s Democratic majorities.
“The governor has been consistent and transparent about the need to make key, strategic investments in this state while simultaneously reducing our overall borrowing and associated borrowing costs,” McClure added. “The bond package compromise is in keeping with the governor’s priorities and will help fuel the growth in our economy that Connecticut needs.”
But McClure’s statement did not specify whether the presentation only will include gross levels of bonding proposed, or if it would include project-by-project detail as has been available in past years.
“There should be total transparency,” said Senate Minority Leader Len Fasano, R-North Haven. “This is a governor who said we need a debt diet, who ran on a debt diet, who went to Wall Street to talk to the credit rating agencies about our debt diet. He has to justify specifically what he wants to bond for.”
House Minority Leader Themis Klarides, R-Derby, said, “Every year I’ve been in this legislature we’ve had complete transparency about what’s in the bond package. If it is not there, then that’s for one reason and one reason only: he has been making promises to lure wary legislators.”
Max Reiss, the governor’s communications director, has accused Republican legislative leaders of “fear-mongering” when it comes to tolls. Reiss also noted that the only Republican alternative to Lamont’s tolls proposal involved draining two-thirds of the state’s emergency budget reserve, putting state programs at severe risk when the next recession occurs.
The Democratic governor is seeking $300 million in bonding for affordable housing construction, sources said, but roughly 40 percent of that involves previously approved financing for housing that was never spent.
“We are going to continue to grow and expand on that,” Lamont said Monday when asked about his plans for affordable housing funding. “Housing becomes a big piece of what we’ve got to do going forward.”
Asked if he intends to propose housing legislation, Lamont said, “Not at this point.”
Connecticut has the 5th highest average housing costs for homeowners in the nation. For those renting, their costs are the 10th highest, according to U.S. Census data.
Housing advocates see the governor’s intention to provide funding this year as progress, particularly since last year Lamont failed to allocate any money in his budget for affordable housing construction.
The governor also said he intends to leverage state funding for development around transportation hubs by linking it to a town’s willingness to include affordable housing.
“It just makes sense to me to make sure that more people have easier access to public transportation. Get them out of car, walk along there, that would be my priority as I do affordable,” Lamont said.
But, he added, state laws don’t need to change to enable him to use transportation funding to entice towns that are otherwise reluctant to build affordable housing.“It’s fabulous the governor is thinking about incentivizing affordable housing,” said Erin Boggs, the leader of Open Communities Alliance, a nonprofit advocacy group in Connecticut.
Although welcome news to advocates, the money Lamont is proposing for affordable housing — though significant — is just the first step in a long and uncertain process toward making investments in this area.
Financing for capital projects must be approved both by the General Assembly and by the State Bond Commission — a 10-member panel chaired by the governor and staffed by his budget office. And even if those approvals are granted, the treasurer may not issue bonds if the Executive Branch isn’t ready to spend the money.
As state government struggled with deficits throughout much of the past decade, it amassed billions of dollars in stranded bonding — proposals to finance project that never became reality. That increasingly became an issue over the past decade. Governors stalled projects — and thereby the borrowing to pay for them — because there weren’t sufficient funds in the state budget to cover the debt payments.
According to the latest monthly projections from state Treasurer Shawn Wooden, Connecticut has amassed more than $12.4 billion in authorized bonding — for all types of projects — that still has not cleared the bond commission. There also is nearly $8.6 billion in bonding that has been approved both by lawmakers and by the commission, that has not been issued — let alone spent.
Even if the state does make the full $300 million investment in affordable housing, advocates like Boggs say it won’t solve Connecticut’s affordable housing problem, which has led to extreme segregation.
“That is a very limited part of what needs to happen. It is just one small tool that can be used to address poverty concentration in Connecticut,” said Boggs.
A recent series of articles published by the CT Mirror and ProPublica showed how exclusive zoning requirements, which wealthy towns use to block affordable housing, have rendered Connecticut one of the most segregated states in the nation. As the Mirror and ProPublica reported in November, state authorities have done little to challenge those practices, instead steering taxpayer money to build more and more subsidized housing in poor communities.The co-chairs of the legislature’s Housing Committee last month vowed to address Connecticut’s high housing costs and the resulting segregation by pushing a so-called “Right to Housing” agenda to ensure that every resident has access to housing.
The suburbs surrounding New Haven are more exclusive than Silicon Valley and Austin, according to research published last month by Yale Law School Professor Robert C. Ellickson, who calls the New Haven region “the land of large lots” because 76% of the land requires at least a half-acre to build a single-family home, compared to 53% in Silicon Valley. Only 1% of the land is zoned for multifamily development, compared to 10% in Silicon Valley.
An increasing number of states are addressing high housing costs and passing legislation aimed at tackling the problem. The national news outlet Stateline reported last week that 28 states and Washington, D.C. last year passed a variety of laws that address the housing affordability problem.