A plan to give a nine-member state panel broad authority to invest hundreds of millions of dollars in state tax receipts in poor cities likely would violate the state Constitution, Attorney General William Tong said Monday.
And while Democratic lawmakers have moved on from the proposal that Tong had analyzed, one Republican is asking them to review the opinion closely nonetheless. That’s because a counter-proposal to that fund, which involves a combination of state borrowing and federal dollars, remains under consideration.
“After careful consideration, I conclude there is a fair likelihood that a court presented with the issue would hold aspects of §13 [Section 13] unconstitutional under the separation of powers doctrine,” Tong wrote in an opinion released Monday.
The attorney general was referring to a bill approved by the Finance, Revenue and Bonding Committee and developed chiefly by Sen. John Fonfara, D-Hartford, co-chair of that panel.
Fonfara had proposed creating the Connecticut Equitable Investment Fund, which would have access to hundreds of millions of dollars in annual revenue stemming from two state income tax hikes on wealthy households, a digital media ads levy and a tax on recreational marijuana sales.
All of the proposed tax increases — excluding those involving marijuana — have been discarded by Gov. Ned Lamont and leaders of the House and Senate’s Democratic majorities in final negotiations toward a new, two-year state budget. But Lamont and many legislators from both parties also had issues with the nine-member council that would oversee those funds.
The group, as proposed by the finance committee, would have included the governor, the state’s treasurer and budget director, and six members of the public — most appointed by top lawmakers.
House Minority Leader Vincent J. Candelora, R-North Branford, who asked Tong to review the proposal, questioned whether the Connecticut Constitution would allow the General Assembly to delegate its budgetary powers in such a sweeping fashion.
“As a rule, the [state Supreme] Court has not allowed the legislature to delegate the kind of primary, permanent, nearly limitless, and broadly discretionary policymaking and appropriation authority that is proposed,” Tong wrote.
Fonfara could not be reached for comment Monday morning.
Candelora said that “when I first saw this language, as a lawmaker, it was shocking to me, and I’m not surprised that the attorney general would agree that this equity fund violates the clear principles of our Constitution.”
The North Branford Republican added that he hopes House and Senate Democratic leaders will keep Tong’s ruling in mind as they work on an alternative to Fonfara’s proposal.
That alternative, spearheaded by House Speaker Matt Ritter, D-Hartford, originally involved borrowing between $2 billion and $2.5 billion over the next 10 years. Now it entails borrowing about $175 million to $200 million annually for the next three to five years and supplementing those funds with a still-undetermined amount of federal coronavirus relief funds.
But the funds also would be overseen by an equity board — but the speaker said he’s confident that this process would not run afoul of the Constitution.
The revised proposal would not allow the oversight panel to appropriate revenues that normally would be assigned to the state budget.
And while the group could direct borrowed dollars to projects, it only could do so after that bonding had gone through the normal approval process, which involves votes by the legislature and the State Bond Commission.