By Kevin McNabola
Orange Board of Finance
Kevin McNabola
As we approach the 2022 elections, it is fair to say that Connecticut is better off fiscally than it was just four years ago. Gov. Ned Lamont gets high marks for being proactive on fiscal stability, taking a $2 billion deficit he essentially inherited in year one and turning it around to a $4.3 billion surplus at the end of fiscal year 2021, with another projected surplus of $1.3 billion forecasted for fiscal year 2022.
Connecticut has been fortunate to have a strong stock market, surging state income and business tax receipts, which contributed to putting the state on strong financial footing. This resulted in its first general obligation rating upgrade in two decades. The governor and state treasury have also taken the right steps to manage long-term financial obligations by paying down over $5 billion in pension debt while building a $3.3 billion rainy day fund.
As a former corporate executive, I certainly applaud the steps the governor has taken with respect to public-private partnerships. In 2021, Lamont put forward a bill which passed the legislature that eliminated several hurdles that had previously blocked public-private partnerships from happening, particularly within the transportation sector. He also announced several key initiatives with private industry, including a $75 million Connecticut Small Business Loan program. This program provides low-interest loans to small businesses and nonprofits. Private Connecticut banks have since stepped up to match the state funding to expand the loan pool to $150 million.
Connecticut now is also looking at another public-private venture with the renovation of the XL Center in Hartford, which is an important asset to maintain the region’s vitality. Lamont continues to build alliances and collaborate with corporate businesses so Connecticut can move forward on transportation infrastructure and economic development initiatives, which are vitally important to the future sustainability of the state.
Connecticut over the past four years has seen several businesses move in, particularly within Fairfield County. Highlights include Digital Currency Group relocating from New York City to Stamford and Phillip Morris International, a fortune 100 company, moving to Stamford. Alexion Pharmaceuticals has committed to staying in New Haven because there is value for a pharmaceutical company residing within a growing bioscience sector in New Haven.
Conversely, I think Connecticut missed an opportunity when General Electric (my alma mater) decided to move out of Fairfield to Boston.
In the short-term, Lamont will need to address being one of only five states within the nation to have the highest long-term debt, high taxes and high electricity rates, on top of an aging rail transportation system. The governor has a tough job ahead of him, but I feel he is up for the challenge and will continue to make Connecticut more competitive economically. He deserves four more years to make it happen.
Kevin McNabola is the chief financial officer for the City of Meriden and a member of the Orange Board of Finance.