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October 16, 2019Cart

Business

by Fairfield County Business Journal
by FCBJ

Ned Lamont: The Business Journal interview

Ned Lamont

As the Democratic nominee to be Connecticut’s next governor, Ned Lamont has promised to get the state’s fiscal house in order through a number of initiatives.

That is a tall order, when staring down what’s predicted to be a $2 billion-plus deficit. Among the Greenwich resident’s proposals are expanding the $200 state income tax credit over three years; the base credit would grow from $200 to $300 while a “targeted relief” program for 315,000 of the poorest households would provide an average benefit of about $700.

To grow jobs, Lamont proposed:

• Eliminating the $250 business entity tax imposed every two years on many limited liability partnerships and corporations, as well as other small businesses that are not subject to the state’s corporation tax.

• Exempting businesses with less than $10,000 in taxable personal property from municipal property taxation.

• Reducing the state’s capital stock tax rate, which is currently the country’s highest at 0.31 percent.

Lamont has repeatedly touted his experiences in business as a key qualification, maintaining that he understands both CEOs and labor. He managed the startup of Cablevision’s Fairfield County operations, and in the 1980s founded his own media company, Lamont Television Systems — later renamed Lamont Digital Systems — which was sold in 2015.

But as most Connecticut residents are aware, Lamont is no political novice. In 2006, he successfully challenged incumbent U.S. Sen. Joe Lieberman for the Democratic nomination — although Lieberman ultimately won re-election by running as an independent. Lamont also unsuccessfully challenged then-Stamford mayor Dannel Malloy to be the Democrats’ standard-bearer in the 2010 gubernatorial campaign.

Lamont sat down with the Business Journal’s Kevin Zimmerman at New Canaan restaurant Rosie on Sept. 20 to discuss a variety of issues. In the first of two parts, the candidate talks about how he plans to strengthen the state’s economy, where he differs from his Republican opponent Bob Stefanowski, and why he wants to be Connecticut’s 89th governor.

First off: Why do you want to be governor?

“For the same reasons I did when I ran eight years ago. Connecticut was at a real crossroads then, just as it is now. We need somebody who’s willing to make the tough decisions to get our fiscal house in order.

“On a more personal note, this is where I started a business, met my wife and raised a family. A lot of people these days are saying, ‘To heck with it, I’m outta here.’ I take the opposite point of view. I want to stand up and turn things around.”

That’s going to take some doing. The state could be facing a $2 billion budget deficit in fiscal year 2020, which some say could grow by $1.5 million by fiscal 2023. You and Mr. Stefanowski have both maintained that tax cuts are at least a part of the answer, but how do you make up for that lost revenue?

“Bob Stefanowski’s plan isn’t to cut the income tax, but to eliminate it — which would cut $10 billion to $11 billion out of our budget. That’s up to 60 percent of our $20 billion budget. I have some very specific tax cuts that we can pay for. (See “to grow jobs” section in introduction.) Something like the business entity tax is just a hassle for business owners that they don’t need. And getting rid of it isn’t going to solve our problems by itself. But it’s a part of my cutting out the underbrush.

“When you’re in a hole like we are, you have to stop digging. Stefanowski’s plan would grow that hole five-to-six fold.”

I take it you are not a fan of the bipartisan budget that the state legislature passed earlier this year.

“It’s important to note that the governor was not invited to the LOB (Legislative Office Building) when they passed that budget, which was a lousy budget. The legislature, year after year, tinkers with the tax rate and thinks that’s enough.”

Chef Rosie Bonura talks with Ned Lamont at her namesake restaurant in New Canaan.

What would your approach be?

“What we have to do is go to where the money is — most of it is in three big buckets that we have some control over. I think those are where we can realize significant savings both in the near-term and the long-term.

“First is health care. We should use our purchasing power like New Jersey has done with PBMs under Chris Christie. (Last year the New Jersey governor helped launch the nation’s first online auction to select a pharmacy benefits manager (PBM) to deliver prescription drug benefits to the state’s public employees. That effort is projected to save New Jersey taxpayers more than $1.5 billion over the next three years, without cuts in benefits.) We should look at that as a way of saving hundreds of millions of dollars while driving down some drug prices.

“In Connecticut, Medicaid is more likely to send people to nursing homes than allow them to go home. You’re looking at a third of the cost of that by letting them stay at home.”

And the second bucket?

“Pensions and the structural deficit we have there. There are some who blame the teachers — ‘They’re overpaid and underworked’ — which, first, is not a way to get anything done, and secondly it’s false.

“If you have a 70-year-old teacher who’s worked for 35 years in a New Canaan public school, they’re counting on that pension — it’s the only thing they have to live on. So don’t blame her for what’s happening, which is what governors have been doing going back 50 years.

“I’ve been very clear — the teachers will be at the table, with me and business, to come up with a real financial solution that solves the friggin’ problem.”

And that solution would include?

“Our liabilities are going up faster than our assets right now. The Connecticut State Lottery is supposed to be for education, so let’s use that money to reduce our pension fund liabilities. We’re not solving that problem in a year, but if we spread (payments) out over a number of years, it would at least stabilize the problem.”

And the third bucket?

“Municipal aid and ECS (Educational Cost Sharing grants, the formula the state uses to send money directly to cities and towns). The Stefanowski plan would cut state aid to education to smithereens and would devastate our cities and our towns by cutting up to 80 percent in some towns. That would result in hundreds of teachers fired, a great increase in the property tax, or some combination of both.

“The first thing is to do no harm. We have 169 municipalities that cannot afford to continue to subsidize inefficiencies. Sharing services is something I’d explore. Why do we need 169 tax collectors, or over 100 superintendents and deputy superintendents? We have more administrators outside of the classroom than we do teachers inside.

“But the key is you don’t do it with a club. We need to work together to solve our problems.”

In his ads and at the debates, Mr. Stefanowski has repeatedly cited your May interview with WPLR’s “Chaz & AJ Show,” where, when asked if you would raise taxes, you said, “Yes.” Can you explain what you meant?

“What I said was, ‘Yeah, we’ll look at some things.’ Specifically I would tax tractor-trailer trucks coming in and out of the state by electronic tolling, which would bring in $100 million. All of our neighboring states have some kind of tolls. What I’m proposing is something similar to what what Rhode Island is doing, by limiting tolls to tractor-trailers.

“The truckers don’t like it, but we need to do something — we have over 300 bridges that are in terrible shape. Look, you’ve got to pay your bills in life  and the gas tax is not going to do it in this era of electric cars.”

In the concluding part of our interview with Lamont next week, the candidate discusses the legalization of sports betting and the recreational use of marijuana, improving the state’s infrastructure, and his thoughts on Dan Malloy and Donald Trump — as well as more about his opponent Bob Stefanowski.