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Gov. Ned Lamont and the Connecticut Business and Industry Association have both endorsed holding steady on the state’s fiscal guardrails for the foreseeable future.
Speaking at the CBIA’s annual economic summit in Hartford on Wednesday, Lamont called the spending cap “sacrosanct.”
“I think it’s really important,” he said. “It’s not a straitjacket. It goes up with income to allow us to spend more as we earn more, and I don’t want to play any games with that.”
He touted the state’s progress in paying down unfunded pension liabilities, saying by the end of this year Connecticut will have reduced the debt by some $10 billion.
The governor also endorsed the volatility cap as a tool to take risk out of the budget, and provide what he called “breathing room” in any future downturn.
The volatility cap requires lawmakers to save a portion of quarterly income and business tax receipts to prevent overspending and cushion the state from future downturns. In the current fiscal year, which began July 1, it’s estimated the cap will force lawmakers to save $1.4 billion.
“The way I’m looking at it is, what do I need, to make sure this state is not going to be forced to cut the heck out of education spending or raise your taxes if we have a recession,” he said.
Democrats in the legislature have signaled that they will pressure the governor to tweak the fiscal guardrails this session in order to provide more funding for education reforms.
But CBIA President and CEO Chris DiPentima endorsed the governor’s approach, saying it will be a key point for his organization in the current legislative session.
“What’s needed is not a dismantling of the guardrails,” he said. Instead he called for legislators and the administration to eliminate inefficiencies in government as a way to find cash for more investment in services.
Lamont also indicated he’ll hold steady on his opposition to regulating the growing artificial intelligence sector.
Last session, the governor threatened to veto a bill passed by the state Senate that would have set standards for the development and implementation of AI.
“I want Connecticut to be at the forefront there,” he said. “I want to be very careful in terms of regulation here. I don’t want to do anything to drive the next generation of developers, the next generation of jobs down to Georgia.”
On energy costs, the governor endorsed the idea of developing more nuclear power in Connecticut, perhaps by expanding capacity at the Millstone nuclear plant in Waterford, which is New England’s largest.
“I think that nuclear power will be a big piece going forward,” he said of the effort to reduce electricity prices.
It’s an idea that gathered bipartisan support during a legislative panel at the event, with both Democrat Cathy Osten and Republican Ryan Fazio touting nuclear power as a key part of the state’s clean energy portfolio.
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The Hartford Business Journal 2025 Charity Event Guide is the annual resource publication highlighting the top charity events in 2025.
Hartford Business Journal provides the top coverage of news, trends, data, politics and personalities of the area’s business community. Get the news and information you need from the award-winning writers at HBJ. Don’t miss out - subscribe today.
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