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CT Construction Digest Wednesday December 4, 2019

Gov. Lamont wants special session to vote on highway tolls, hospitals and restaurants during week of Dec. 16

Gov. Ned Lamont told leaders of the state legislature Tuesday evening that he wants a special session before Christmas to approve four contentious issues, including a scaled-back highway tolls plan."I understand and appreciate this is a difficult and expedited time frame, but believe these to be important issues which require resolution before year-end,'' Lamont said in an email to both Democratic and Republican leaders. “I have instructed my office to prioritize my time to remain focused and working in collaboration with each of you.”Lamont said he would like legislators to meet during the week of Dec. 16, and House Democrats have been told by their leaders to set aside the dates of Dec. 17, 18, and 19 for possible special sessions.Besides transportation, Lamont wants votes before the end of the year on the annual bond package of construction projects, a comprehensive settlement of a long-running lawsuit by hospitals against the state, and a resolution of a bitter battle between restaurant owners and workers over wages for employees who receive tips.The four issues have been among the most contentious of Lamont’s first year in office, and legislators have been battling over each one as special sessions have been repeatedly postponed throughout the summer and the fall.Legislators were still unsure Tuesday night on exactly which issues would be tackled. They have repeatedly delayed votes on tolls, where support has been lacking. Larry Perosino, a spokesman for the House Democrats, said the agenda for a “possible'' session ”is still being finalized.''Kevin Coughlin, a spokesman for the Senate Democrats, said lawmakers on both sides of the aisle are working with the governor’s office on a "potential mid-December'' session."The issues covered by any possible session have yet to be determined,'' Coughlin said.Patrick Sasser, a Stamford firefighter who leads the No Tolls CT organization, said that a vote in two weeks is too quick because no public hearings have been held on the latest version for trucks-only tolls.“I’d like to know when the governor is holding his first town hall meeting that he promised,” Sasser said Tuesday night. “He should be held accountable for that comment. He’s fast-tracking to rush to a vote.”Lamont said he was “respectfully” requesting a vote on electronic tolls to pay for specific bridge construction projects as part of a larger initiative to address the state’s transportation bottlenecks on highways and commuter railroads. House and Senate Democrats have both failed to pass tolls for passenger cars, but Democratic leaders joined together with Lamont last month for a new plan for tolls for trucks only at 12 spots around the state.At a meeting at the governor’s mansion last week, Lamont and top Democrats agreed broadly to support 10-year, $20 billion transportation plan that relies heavily on federal borrowing that would be extended over a 35-year term.The compromise plan endorsed by House Democrats calls for 12 tolling locations around the state that would generate about $180 million per year. The governor’s original plan, released earlier this fall, called for tolling all vehicles at 14 locations to raise about $320 million a year.“We like this plan. This plan works, and the numbers add up,” Lamont said after a Nov. 26 meeting at the Governor’s Residence. “I’m here to solve problems — not to study problems. ... Let’s get this thing started in an honest and comprehensive way.”Regarding the highly complicated hospital settlement, Lamont said that his staff will be coordinating with the legislative staff in order to conduct an informational hearing. The clash involves hospital taxes and Medicaid reimbursements that are highly detailed and have been in dispute for more than five years as hospitals repeatedly clashed with then-Gov. Dannel P. Malloy. Some legislative leaders were not immediately available for comment Tuesday night. But state Rep. John Hampton, a moderate Democratic swing voter from Simsbury, said it is "overly ambitious'' to believe that the legislature could settle four contentious issues before Christmas. Since the latest trucks-only tolls plan was released only last week, he said a public hearing must be held before any votes. Lamont wants lawmakers to finally vote on resolving a clash between restaurant owners and workers, which has led to lawsuits against multiple restaurants around the state. Lamont vetoed a bill that would have restricted the rights of the workers to win legal settlements, but the legislature never voted to override the veto. Senate Republican leader Len Fasano of North Haven and others say that many legislators agree on a bipartisan solution that has been blocked by the Senate Democrats due to pressure from union officials, but the Senate Democrats say they are trying to resolve the issue in a satisfactory manner that does not hurt the workers.House Republican leader Themis Klarides said she is “very hopeful” that the legislature can vote on both the hospital and restaurant issues.“To me, those are no-brainers,” she said. “If the hospital association is supporting it, I am supporting it.”

Lamont tells municipalities funding on the way
Kaitlyn Krasselt
Towns and cities digging out from the first winter snowstorm of the year — and wondering how to pay for it — may get some financial relief by Christmas.Cities and towns have been waiting on state funding, given annually to towns in the form of grants to pay for things like road repaving, fall tree clearing and winter snow removal. Release of the funds has been held up since July by Gov. Ned Lamont’s debt diet and negotiations over how much he and the legislature will agree to borrow for major transportation infrastructure projects.Lamont promised a bond commission meeting to free up the funds municipalities have been waiting on, as well as a special legislative session, will happen this month, during an unscripted 20-minute speech to municipal leaders Tuesday at the annual convention of the Connecticut Conference of Municipalities.“These folks have come to count on that, they need that for their planning purposes,” Lamont said Tuesday. “That was a deal I made with them and I’m pretty darn sure we’re not going to be borrowing that much money from the (General Obligation) fund so we can do that. They can count on it.”The bond commission will meet Dec. 18, said Lamont spokesman Rob Blanchard.“I know how important it is that you get the bonded revenues that you’ve come to expect and count upon, and I just want you to know that I wasn’t being a jerk by being slow about this,” Lamont said. “There was a plan out there to pay for transportation with $700 million a year in additional bonding, which would have crowded out some of our other priorities. We’re very close to reaching an agreement with the legislature. It’s not going to include $700 million a year in bonding and that means ... we’re going to have a bond commission meeting that frees up all of the (local capital improvement) and paving money that you need and can expect and count upon and we’re going to get that done.”Lamont also indicated in his remarks that a special legislative session is on the way this month and tossed out a handful of possible dates during the same week as the scheduled bond commission meeting, but it’s unclear what will be on the itinerary when that happens. Lamont, of course, hopes some version of his 10-year transportation plan will be on the docket.“(Chief of Staff) Ryan (Drajewicz) and the leadership are meeting right now trying to figure out what we have to do between now and the special session later in December, to see if we can get this voted on,” Lamont said. “I think we have a plan that doesn’t raid the rainy day fund.”It is expected that the December special session will address the state hospital tax and the long-term bonding package for capital projects throughout the state, such as school construction.Senate Democratic spokesman Kevin Coughlin said the Senate Democratic caucus is working with the Governor's office and the three other caucuses on a potential mid-December special session.“The issues covered by any possible session have yet to be determined,” he said.Senate Minority Leader Len Fasano, R-North Haven, said it is his understanding that the legislature will be called in to vote on a hospital settlement in December, but that there’s still administrative work that must be done before a vote can take place.“I hope we will also be voting on legislation to address the minimum wage tip credit which was negotiated by all four caucuses and the administration,” Fasano said. “I do not know if the governor will make the bonding package part of a special session. The governor has excluded Republicans entirely from bonding negotiations and has not shared any information.”

Dems and GOP share common flaws in transportation plans

As Connecticut’s transportation debate heads into a new stretch, Democrats and Republicans aren’t acknowledging that their plans share two common weaknesses — economic risk and a lean rebuilding program.
Gov. Ned Lamont and Democratic legislative leaders recently criticized the Senate GOP plan — which avoids tolls and drains 60% of the state budget reserves — for leaving Connecticut dangerously vulnerable. Those funds likely couldn’t be replenished before late 2024 — or long after that if another recession hits first.
Democrats, meanwhile, have crafted a plan to pump $20 billion into transportation over the next decade — in part by tolling trucks, but not cars. But that plan also hinges on Connecticut’s economy remaining rosy until late 2024.
If a downturn comes a few years earlier, the Democratic investment slips to $19.4 billion, just 8% percent more than Republicans proposed without using tolls.
“The Democrats, on one hand, claim we need to prepare for the coming recession, yet their very transportation plan ignores that recession,” said Deputy House Minority Leader Vincent J. Candelora, R-North Branford.
Senate Minority Leader Len Fasano, R-North Branford, said the Democratic double-standard is unfair, but is designed to mask a larger problem.
When Connecticut’s economy slips, Fasano charged, Democrats will broaden their trucks-only tolling program.
“Their solution, their inescapable conclusion, is to toll cars,” he said.
Fasano, whose caucus crafted the GOP transportation plan, wants to avoid tolls entirely. 
Republicans instead would take $1.5 billion of the current $2.5 billion reserve and use it to pay down pension debt. This, in turn, would lessen required pension contributions, and those savings could be funneled into the transportation program.
On paper, the reserve could regain all those funds by late 2024. But state analysts’ projections are based on relatively short-term trends, and are conditional upon the economy not slipping into recession.
Lamont and other Democrats noted the last recession ended more than a decade ago, and based on history, the next downturn is closer than the next boom.
Also, a $1 billion reserve — which represents roughly 5% of annual operating expenses — is relatively modest for Connecticut, 
When the last recession ended in 2009, annual tax receipts were $1.6 billion less than they were two years earlier, just before the downturn began.
State comptrollers long have recommended a reserve of at least 15%. Connecticut has 13% now and is projected to hit the limit by mid-2021.
Without enough reserves, Democrats say, Connecticut residents face higher taxes and deep program cuts when the economy slips. And with the GOP plan, that could happen before the reserves could be restored five years from now.
 “Why are they picking truck drivers over our middle class?” House Speaker Joe Aresimowicz, D-Berlin, said of the GOP’s opposition to truck tolls during a press conference last week.
“The latest Republican proposal puts the state at immense risk by raiding the Rainy Day Fund,” Max Reiss, the governor’s communications director, said Tuesday. “Instead of protecting the state from a potential economic down turn, the Republicans would rather put it at risk.”
Fasano counters that if a recession were to hit a year or two from now, legislators and the governor would face hard choices — but the transportation program would be secure. Officials instead would be forced to cut spending in non-transportation programs.
“Our economic risk can be managed,” he said. 
Democrats counter it would be more like budgetary devastation than risk management.
“I’ve seen it before,” Aresimowicz said. “When that recession comes, and there’s no money in the rainy day account, we will cut education, we will cut nonprofits.”
Lamont, who spoke Tuesday to the Connecticut Conference of Municipalities, said having depleted reserves going into a recession is a recipe for gutted state aid to cities and towns.
“If you loot the rainy day and you have a recession, that would really be hitting property taxes,” the governor said.
 But Democrats aren’t exactly free of risk themselves.
When they first announced some details of the plan they’re developing, they highlighted tapping surplus dollars only after the rainy day fund reaches it legal limit of 15% of operating expenses — about $3 billion — in late 2021.
But what they didn’t say last week was that to maximize their plan, there must be budget surpluses ranging between $321 million and $467 million every year from 2021 through 2024.
Still, even if the economy slips, Democrats insist they won’t toll cars.
Aresimowicz and Looney even said they’d consider amending the state Constitution to prohibit future lawmakers from succumbing to the temptation.
Lamont said the transportation rebuild would have to be scaled back if the budget surpluses don’t last. His administration’s projections show $19.4 billion still could be spent over the next decade, even if surpluses aren’t available after 2021.
“We’d have to downsize,” Lamont said. “Nineteen billion is still a lot more than we were spending before.”
But is the Democratic proposal — once it’s stripped of economic good fortune — that much better than the Republicans’?
Transportation officials say about $15.6 billion is needed over the next decade just to keep infrastructure in good shape. Any strategic improvements — widening highways, adding rail cars, redesigning interchanges — would cost more.The GOP plan would go only $2.4 billion, or $218 million per per year, past that. The latest Democratic plan tops that benchmark by $3.8 billion, or $345 million per year.
And both fall well short of the $21 billion plan Lamont proposed in early November — a plan he called modest, yet still required the tolling of cars and trucks near 14 aging bridges.
University of Connecticut economist Fred Carstensen, who heads the Connecticut Center for Economic Analysis, said any official — Democrat or Republican — who’s counting on five more years of prosperity isn’t being realistic.
“You’re totally detached from reality,” he said. “You’re living in an alternative universe.”
A national poll released in late November by CNBC found two-thirds of Americans surveyed believe the U.S. economy will enter another recession within the next year.
Connecticut’s economy shrank for 10 consecutive years from 2008 through 2017, he said. That weak foundation, along with surging corporate debt and declining interest rates, all are warning signs that a sharp downturn could be less than two years away.
An equally dangerous, but less known, problem is that Connecticut’s income and sales tax receipts — when measured as a share of household income — have steadily shrunk since 2013, Carstensen said.
 In other words, even as households earn more, they aren’t confident it will last and aren’t spending their money.
“We’re not in a normal world,” he said.

Transportation committee will question Port Authority over financial irregularities
HARTFORD – State lawmakers on the Transportation Committee are slated to question three former officials of the Connecticut Port Authority Wednesday concerning the troubled quasi-public agency’s operations.
Committee members will also hear from two top aides to Gov. Ned Lamont, the acting chairman of the CPA board of directors, and state auditors
This will be the Transportation Committee’s second informational hearing following revelations earlier this year that the CPA board approved spending $3,250 to purchase photographs from a member’s daughter for office art. The first was Aug. 20.
Since then, the independent Auditors of Public Accounts reported more irregularities and shortcomings that raised additional concerns over financial and management practices at the port authority.
The findings included unsupported and questionable reimbursements for travel, meal and entertainment expenses, improper payments to employees, excessive use of outside legal help, and failures to follow or set policies.
The three former officials scheduled to participate in today’s follow-up forum are Scott Bates, Bonnie Reemsnyder and Evan Matthews.
Bates was the CPA chairman when the board approved the purchase of office art from Reemsnyder’s daughter. Reemsynder succeeded Bates in June, but she resigned in July after the disclosure of the $3,250 expenditure. Bates resigned from the board later.
Matthews was placed on paid leave as the port authority’s executive director in July, and he resigned in Oct. 1 roughly four weeks after the board authorized the negotiation of a separation agreement with him.
David Kooris, the acting chairman of the CPA board, Paul Mounds, the governor’s chief operating officer, and Melissa McCaw, the secretary of the Office of Policy and Management, are also scheduled to participate today.
Lamont ordered an independent audit of the finances and administration of the port authority in August. He directed the Office of Policy Management to oversee its financial decision-making until the outside audit is completed.
Committee members will also have a presentation from the state auditors who prepared the latest audit of the port authority’s operations for the 2018 and 2019 fiscal years.

Governor Ned Lamont: Announcements on wind, lottery to come soon
Erica Moser
Norwich — Gov. Ned Lamont expects an announcement in the next 48 hours from the Department of Energy and Environmental Protection on who will supply offshore wind power to Connecticut, saying he's been excluded from that process, "but I'm pretty sure they're making that announcement tomorrow or the next day."
He anticipates the expected Eversource-├śrsted deal to transform State Pier in New London into an offshore wind hub to go before the Connecticut Port Authority for a vote in the next few weeks.
Lamont also plans to announce his appointment of a new head of the lottery commission — someone who is "very active in digital media, and a consultant on some sports betting things" — in the next couple of weeks. He is thinking about doing another request for proposals on Seaside State Park "that gives people more flexibility," though he didn't offer a timeline.
These are some of the plans Lamont discussed both as the keynote speaker at a business breakfast the Chamber of Commerce of Eastern Connecticut held at the Holiday Inn Norwich on Tuesday, and speaking to reporters afterward.
"I'm not allowed to invest anymore, but if I was, I'd be investing in eastern Connecticut," he said, speaking to a crowd who had dug out their cars from early morning snow to be there. "I'd be investing in eastern Connecticut not just because you're all sitting here in front of me, but you really have such economic momentum."
He pointed to Monday's announcement of the Navy and Electric Boat finalizing a $22.2 billion shipbuilding contract. With the corresponding growth in jobs, Lamont said now is "an amazing time to upgrade our housing stock, invest in downtown Norwich and Groton and New London, and to bring those cities to life."
Introducing the governor, Mashantucket Pequot Tribal Chairman Rodney Butler advocated for passage of the Connecticut Jobs and Revenue Act, which he said would allow sports betting and result in another $10 million for state tourism marketing.
On tourism, Lamont said, "I got to admit, I didn't do that great, but we got more money to tourism." Later saying that you "can't have tourism unless people get here," he segued into talking about how to pay for upgrades to roads and bridges.
Taking aim at two Republican plans, the governor said, "I've come up with a plan that doesn't put $700 million a year on the backs of the Connecticut taxpayers through more and more and more borrowing. We've come up with a plan which doesn't raid the rainy day fund."
The rainy day fund is now $2.5 billion, and Lamont says he is "going to make damn sure we're ready" in the event of an economic downturn or recession, so he doesn't have to cut back on state aid, increase taxes or do a lot of layoffs. The latest Democratic plan calls for trucks-only tolls.
Susy Hurlbert, CEO of the Eastern Connecticut Association of Realtors, asked if there were any rebates or credits so shoreline residents don't have to bear the burden of tolls.
Lamont said the plan is trucks-only, 40 percent would be paid by people out of state, and local merchants who may go over the Gold Star Memorial Bridge multiple times per day will only pay once per day.
Asked by state Rep. Anthony Nolan, D-New London, about the governor's next three priorities, Lamont responded in part by saying he will "focus like a laser beam on economic development" in the next legislative session.
That will include "speeding up all the certifications and environmental permitting we need to make it easier for somebody to start a business," he said. "The government's got a bad case of the slows. I don't know why everything takes so long, and we're doing everything we can to focus on that."

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