Attorney General William Tong told lawmakers Monday that the Democratic budget proposal for a Connecticut Equitable Investment Fund could be found “unconstitutional,” by the courts.
The fund, which would have included billions of dollars, would have been managed by a nine-member investment council. It was a proposal by Democratic Sen. John Fonfara, co-chair of the Finance, Revenue and Bonding Committee as a way to increase the amount of money poorer, urban areas receive from the state. It was initially funded with proceeds from a capital gains charge, but now will include a combination bond and American Rescue Plan funds.
“After careful consideration, I conclude there is a fair likelihood that a court presented with the issue would hold aspects of §13 unconstitutional under the separation of powers doctrine,” Tong wrote in his opinion to House Minority Leader Vincent Candelora.
Democratic lawmakers were already rethinking about changing the proposal, which is expected to be part of the $46 billion, two year budget.
The new proposal has a 17 to 19 member board reviewing about $300 million a year of projects targeted to 33 towns and those investments and projects would be funded by bond proceeds and infrastructure, while other investments will rely on federal dollars. The goal would be $300 million over five years and then the opportunity for a reauthorization.
House Speaker Matt Ritter said the constitutionality issue Tong raised about the original proposal was based on the fact that the original bill had executive branch officials making appropriations, which is the role of the legislative branch.
“The bill that we’re working on has the state Bond Commission authorize the allocation of bond proceeds and then it goes to an executive branch, majority led equity board that will recommend projects and that will be the distinction as to why that’s constitutional,” Ritter said.
Ritter said the current draft is still being negotiated and will be part of the budget package they debate on Tuesday.
“I think it was a nonstarter because of the constitutional challenges,” House Minority Leader Vincent Candelora, R-North Branford, who requested the opinion said Monday. “I still question the fundamental purpose of it.”
However, Candelora says they seem to be seeing “the continued delegation of government authority to other private boards. I’m not sure it’s efficient and I’m not sure that it makes sense for us as a state to be doing that.”
Candelora said he’s glad Tong shared his concerns about the proposal’s constitutionality.
