Connecticut’s fiscal health stands at a pivotal juncture, and the Connecticut Conference of Municipalities’ (CCM’s) recent campaign attacking Gov. Ned Lamont and the state’s fiscal guardrails underscores the stakes. Enacted in 2017, the fiscal guardrails are spending reforms designed to avert a fiscal crisis. With the discipline they have enforced, our state has already paid down nearly $10 billion in pension debt, improving its standing from the third-worst to the sixth-worst-funded pension system in the country. If the guardrails remain intact, Connecticut is projected to save $7 billion more over the next 25 years. Carol Platt Liebau Credit: Yankee Institute But even as Connecticut sees the benefits of its fiscal guardrails, CCM has criticized Gov. Lamont’s commitment to these reforms, calling for increased state spending from an already strained budget. CCM argues that education funding hasn’t kept pace with inflation and that a shrinking taxable property base makes it harder for towns to meet their needs. They claim more state spending is the answer. This approach overlooks the long-term benefits the fiscal guardrails provide. These reforms have stabilized finances and protected towns from future fiscal shocks by encouraging sustainable state budgeting. Breaking the guardrails risks significant tax increases or severe service cuts — neither of which is responsible. Municipalities must take ownership of their fiscal challenges, reassess budgets, and confront the reality that reliance on state bailouts is neither sustainable nor responsible. Although there may be short-term pains in this budget recalibration, true stability for towns lies in disciplined, long-term planning — not in dismantling the guardrails. Busting them, like the spending cap, to appease groups like CCM would risk towns and cities funding projects outside of their means, which would risk higher property taxes or severe service reductions. Ultimately, like in our personal lives, you cannot spend more than what you have. It is common sense; and municipal budgets need to adopt this principle. Meanwhile, the overreliance on state aid is the root cause of current municipal budget problems. During the pandemic, Connecticut received $2.8 billion in ARPA funding, temporarily boosting municipal aid. Many towns used these short-term dollars to fund permanent programs — creating obligations they could not sustainably support. Now that ARPA has expired, municipalities face significant shortfalls. Although it is tempting to use Lamont and the state’s fiscal guardrails as scapegoats to deflect from years of poor budgeting decisions, the wiser course is to confront and address this mismanagement. Certainly, dismantling the fiscal guardrails isn’t the answer. Despite barriers to prosperity including high property taxes, a difficult business climate, and some of the nation’s highest electricity rates, the guardrails have been instrumental in establishing a path toward long-term economic security. They have imposed essential discipline on state spending, thereby reversing decades of pension underfunding, strengthening Connecticut’s creditworthiness, and reducing long-term liabilities. Since their enactment, the guardrails have saved over $170 million and freed more than $700 million for critical services, ensuring that every taxpayer dollar is used wisely. The fiscal guardrails are Connecticut’s strongest defense against future financial turmoil. They secure responsible spending and provide a stable foundation that benefits both the state and local communities. Weakening these protections would reverse hard-won gains and threaten long-term economic health. Although the governor’s eagerness to adjust the volatility cap — a fundamental pillar of the guardrails — is a mistake, his steadfast commitment to the spending cap is an essential safeguard against repeating past mistakes. His leadership is an investment in the fiscal well-being of every Connecticut community. Every resident of Connecticut should hope that Gov. Lamont will refuse to cave under political pressure to open the floodgates of overspending. Carol Platt Liebau, is the president of Yankee Institute, a Connecticut-based free-market policy organization. ...read more read less