Connecticut Governor Ned Lamont is facing pressure to find a compromise on fiscal guardrails as State Treasurer Erick Russell advocates passionately for the implementation of “Baby Bonds.” This groundbreaking wealth redistribution program aims to invest $600 million in the future of the state’s most underprivileged children. However, the chief obstacle to this initiative is Governor Lamont himself.
During a recent appearance on the political affairs show, Russell devoted over three minutes to discussing Baby Bonds but spent less than 20 seconds addressing the governor’s stance on the matter. According to Russell, the governor’s office is reluctant to bond for the full program, prompting discussions on alternative funding options. Russell has been careful not to exacerbate the division between Lamont, a wealthy Greenwich businessman, and progressive Democratic lawmakers, as it threatens to stall the adoption of the next state budget.
Connecticut consistently ranks among the states with the highest income inequality, as per U.S. Census data. Two tax fairness studies conducted in 2014 and 2022 reveal that the state and municipal tax systems disproportionately burden low- and middle-income households. Legislators have noticed a decline in access to healthcare, childcare, affordable housing, education, and economic opportunities, not only in urban areas but also in rural eastern Connecticut.
The implementation of Baby Bonds remains stuck due to recent changes in legislation. Last spring, Democratic leaders accommodated Governor Lamont by removing the treasurer’s authority to borrow funds directly. The revised legislation now requires approval from the State Bond Commission before any borrowing can take place. This places significant power in the hands of the governor, who chairs the commission and determines the agenda and borrowing decisions.
Governor Lamont argues that the state’s substantial bonded debt and unfunded retirement benefits, along with the need to prioritize current initiatives, make bonding for Baby Bonds inappropriate. He believes that resources should be directed towards immediate assistance programs such as workforce training and debt-free community college rather than funding a trust fund for future generations.
Legislators are considering investing more in areas such as childcare, social services, and education. However, accommodating a trust fund program for poor children within the state budget without borrowing is deemed infeasible by the leaders of the legislature’s Appropriations Committee due to spending caps and other constraints. Russell and House Speaker Matt Ritter have been exploring alternative funding options, including a combination of public and philanthropic funds or the use of revenue intercepts, though Lamont has been cautious about such measures.
The controversy surrounding Baby Bonds highlights a broader ideological divide between Lamont and progressive lawmakers. While the governor supports some measures to address wealth inequality, he believes that wealth redistribution should primarily occur at the federal level. Progressive lawmakers argue for more significant tax reforms and increased funding for social programs to tackle the state’s high cost of living and inequality.
The fate of Baby Bonds rests on the upcoming state budget and bond package, which must be crafted by Governor Lamont and the legislature before the General Assembly session ends on June 7. Strong support for Baby Bonds exists among progressive lawmakers, the Black and Puerto Rican Caucus, and advocacy groups. Failure to fund the program could potentially fracture the Democratic majority, necessitating the governor to seek support from Republican lawmakers to pass the budget and bond package.