October 8, 2018

Progressive Democratic businessman Lamont seeks tradeoffs with CT employers

HBJ Photos | Steve Laschever
HBJ Photos | Steve Laschever
Gubernational candidate Ned Lamont.
Providing government incentives to spur business growth has become a war among states. Despite some criticisms of those programs, Lamont says he wouldn’t disarm.

Edward “Ned” Lamont Jr.

Party: Democrat

Most recent job: Adjunct professor, political science and philosophy, CCSU

Other past significant jobs: Founder/CEO/Chairman, Lamont Digital Systems

Age: 64

Town of residence: Greenwich

College education: Bachelor's degree, Harvard; MBA, Yale

Running mate: Susan Bysiewicz

As a wealthy entrepreneur who built and ran a telecom business for about three decades, Democratic gubernatorial candidate Edward "Ned" Lamont Jr. says he has a deep understanding of the needs and desires of Connecticut companies.

More than anything — even tax cuts, which he has promised in modest measure — Lamont's pro-business agenda includes helping train the next generation of workers, improving transportation infrastructure and getting the state's fiscal house in order.

Businesses, he said, want a budget that is "on time, reliable, predictable and takes uncertainty off the table."

While Lamont said his door will be open to hear private-sector concerns, the self-proclaimed progressive candidate also has strong feelings about labor, social issues and corporate responsibility, favoring some policies that could irk the business community.

The Greenwich resident, 64, who ran unsuccessfully for the U.S. Senate in 2006 and governor in 2010 (a race in which he was primaried by Gov. Dannel P. Malloy), has sought to balance those aspects of his identity in debates, speeches and interviews, including a recent sit-down with the Hartford Business Journal.

"I think I can cross those lines in a way that other people can't," Lamont said of his experience, political beliefs and management style.

Despite a $4 billion-plus budget deficit projected for the next two fiscal years, which amounts to more than 10 percent of the $40 billion biennial budget, Lamont said he won't raise any of the state's major levies, including the personal and corporate income taxes and the sales tax.

That's despite a comment he made to the Hartford Courant in January, saying it was his "hunch" that higher taxes on the wealthy would be "part of the solution." Republican opponent Bob Stefanowski has pounced on some of Lamont's tax-related statements, charging that he's trying to conceal his true intentions.

Lamont said he's pledging more than $400 million in tax relief for property owners and businesses in his first two-year budget that would be released in early 2019. That includes increasing the property tax credit for homeowners, axing the business entity tax, reducing the capital stock tax, and exempting certain smaller companies from the local personal property tax. He deems the latter three to be nuisance taxes that send the wrong message.

His promised tax cuts are much smaller than those offered up by Stefanowski, who said he will eliminate the personal income tax entirely over time. Lamont argues eliminating that roughly $10 billion revenue source would devastate education and transportation, and force municipalities to implement steep property-tax hikes.

"I'm not promising you a unicorn," Lamont said. "But I'm telling you I'm listening."

He also supports highway tolling of out-of-state trucks, which could be legally untenable, depending on the outcome of an ongoing federal lawsuit in Rhode Island.

Lamont said he's confident he would be able to honor his tax-relief promises, despite the red ink that awaits.

To be clear, neither Lamont nor any other candidate has given a precise accounting of how they'll close the deficit in their first budget, but Lamont said he would target the state's healthcare plan, a major annual cost, for savings.

That would include moving more toward bundled or value-based insurance payments and better leveraging the state's purchasing power to lower drug prices. He also wants to improve sales tax collections and generate new revenue by legalizing recreational marijuana and online gambling. However, he acknowledged that he may not be able to accomplish a number of those items in time for his first budget.

Asking more of employers

Though he's promised not to dip further into wealthy and corporate pockets to solve the state's deficits, Lamont said he still needs companies to step up to the plate.

If elected, he wants businesses to help market the state and recruit companies to locate here, similar to his involvement in a recent successful attempt to woo tech giant Infosys to hire 1,000 employees in downtown Hartford. He's unimpressed when companies "complain from the sidelines," preferring that executives get involved in the public debate, as they did with the recent high-profile Commission on Fiscal Stability and Economic Growth.

Lamont supports raising the minimum wage to $15 an hour over a four-year period, as well as requiring some form of paid family leave for private-sector workers.

The minimum wage is an area where he stands apart from both Stefanowski and unaffiliated candidate Oz Griebel.

Businesses will likely oppose both efforts, but Lamont noted that Massachusetts and New York have each recently enacted a $15 minimum wage and paid leave. Besides competitive considerations during a time when unemployment is relatively low, he said the policies are the right thing to do regardless.

"I'm tired of subsidizing companies that don't pay a better wage with earned income tax credits and such," Lamont said. "I've got to find ways to have other people step up. We can't do it by ourselves."

Lamont has also proposed a uniform motor vehicle tax to replace Connecticut's disparate tax rates set by municipalities, a position on which Stefanowski has attacked him repeatedly.

A statewide rate would likely lead to higher car taxes on residents of wealthier communities, but lower taxes for the majority of others, according to Lamont.

In biz incentive war, Lamont wouldn't disarm

In a debate last month, Lamont called Malloy's corporate incentive program, First Five Plus, "a disaster."

"We lead with the bribe and it's the wrong way to go," Lamont told the New Haven audience.

He charges that First Five is "politicians picking and choosing" winners and losers and that his approach would focus more on helping employers create training programs and leading with reasons companies should be here beyond taxpayer grants.

However, Lamont's criticisms shouldn't be mistaken for any drastic departure from Connecticut's current economic-development strategy, which acknowledges that many states offer business incentives.

"Broadly, by way of philosophy, I would deemphasize incentives," Lamont said. "Am I going to take them off the table? Are you kidding? I'm not going to disarm, I'm in a nuclear world."

That Lamont felt compelled to criticize First Five (which is providing incentives to Infosys, the IT company he takes partial credit for wooing) may speak to the dynamics of the tight and contentious race.

Stefanowski has seized upon Malloy's unpopularity, telling voters in debates and in advertisements that Lamont would be more of the same and raise their taxes.

Lamont has countered by tying Stefanowski's politics to President Donald Trump, who endorsed Stefanowski on Twitter after he won the GOP primary in August. Lamont — who recently received the endorsement of former President Barack Obama — said debating the successes or failures of past governors won't make "a dime's worth of difference" come January, when the next governor must begin to right the state's fiscal ship.

It's true that Lamont shares Malloy's policy views on topics like renewable energy, environmental protection, prison reform, gun control and the Affordable Care Act.

"I would say, [Malloy's] done, you know, a lot of good things, but he failed in the big thing, which is to fix this budget," he said. "I'm not saying he didn't try, I'm not saying he didn't do a hell of a lot more than Jodi Rell and John Rowland."

Lamont said his style differs from Malloy, a self-described "porcupine" who was an assistant district attorney in the 1980s before entering private practice.

"Malloy, he's a prosecutor, right? That's how he grew up. I was an entrepreneur who started a business," Lamont said. "You could not have two more different backgrounds than that."

Long-term challenges

Besides the immediate deficit the next governor faces, there will also be longer-term structural problems to address — financial challenges that threaten to imperil the state's economy, education system and social safety net in the coming decade.

Lamont said he will ask state employee unions to return voluntarily to the bargaining table, in the hopes of restructuring their recently renegotiated SEBAC agreement, which expires in 2027 with layoff protections until 2021.

Lamont, who once chaired the state pension fund's advisory council, wants to tackle the state teachers' pension fund, whose annual cost could rise from $1.2 billion to $6 billion over the coming decade, due to its backloaded payment schedule. Lamont hopes to find financial flexibility by restructuring a 2008 bond covenant that requires the state to make full annual contributions to the teachers' retirement system through 2032.

He also favors a recent proposal to transfer the state's lottery assets to the teachers' fund, to help shore up its unfunded liability.

Such a move, he said, would be a "show of faith" to unions and perhaps make them more open to bargaining other changes.

Here's where Lamont said he stands on a few key topics in the Capital City:

Hartford's debt bailout: Lamont said he wouldn't have supported the legislative deal this year in which the state agreed to pay off more than $500 million of city debt over decades. While it helped avert a municipal bankruptcy, Lamont views the deal as a bailout for investors who bought the city's bonds. Despite that, Lamont indicated that the state may be stuck with the deal.

"Now you have a contract with the bondholders," he said. "So it's not like I can just tear it up and walk away. That's not really the choice I've got."

XL Center: Lamont said the aging Hartford arena should be overhauled by private investors, with state oversight and direction, rather than investing hundreds of millions of taxpayer dollars in the venue. A Chicago private equity firm recently cast a bid to buy the XL. Lamont said he'd prefer to see more competition.

"I guarantee you I would get more people to look at that deal if I was governor," he said.

Investing in Hartford housing, real estate: Lamont said he favors the Capital Region Development Authority's public-private approach to development in Hartford, and thinks the state must continue to invest here.

"This city is really on the cusp of something important," he said.

Would a Lamont administration maintain the level of state support for that development?

"I know how important it is. Would I continue it? Let me take a look at that," he said. "We're a little tight on money."

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