A bipartisan coalition of state lawmakers is moving to overhaul how gaming revenues are shared with local governments, proposing a plan that would restore $152 million in casino revenue aid to all municipalities. The legislation, known as Senate Bill 388, seeks to reverse a restrictive funding model that has left dozens of towns without a cent of tribal gaming support for years.
The proposal would replace the current distribution system with a fixed annual allocation of approximately $152 million, ensuring that all 169 municipalities in the state receive a share of the funds. This represents a dramatic shift from the system established in 2019, which currently distributes roughly $52 million and leaves 44 towns entirely excluded from the funding pool.
The funds are generated through slot revenue payments from the Mohegan Tribe, which operates Mohegan Sun in Montville, and the Mashantucket Pequot Tribal Nation, which operates Foxwoods Resort Casino in Ledyard. For many local officials, the bill is less about a new benefit and more about returning the fund to its original purpose: providing a reliable stream of non-property tax revenue to stabilize local budgets.
The Shift From Targeted Aid to Universal Distribution
The current friction stems from a 2019 policy shift. During that period, lawmakers faced declining casino revenues and persistent state budget deficits, leading them to redirect a portion of the tribal funds into the state’s General Fund. They also moved toward a “targeted aid” model, which concentrated the remaining money in specific areas and eliminated payments to dozens of small and midsize towns.
The fallout of that decision has been felt most acutely in rural and smaller communities. Under the proposed changes, 44 municipalities—including Litchfield, Middlebury, Oxford, Southbury, and Woodbury—would see aid restored to their local budgets for the first time in years. Because the total funding pool would nearly triple, even towns that currently receive aid would see their baseline allocations increase.
The push for this restoration has garnered broad institutional support. During a public hearing on March 12, officials from 25 different municipalities testified in favor of the bill. They were joined by several influential advocacy groups, including the Connecticut Conference of Municipalities, the Connecticut Council of Small Towns, and the Northeastern Connecticut and Lower River Valley Councils of Governments.
Even the mayors of the host communities, where the casinos are physically located, have voiced their support. Ledyard Mayor Fred B. Allyn III and Montville Mayor Leonard G. Bunnell Sr. Both testified that distributing the funds to all municipalities would align the program with its original intent.
Comparative Impact of the Proposal
| Feature | Current System (Post-2019) | Proposed System (SB 388) |
|---|---|---|
| Total Annual Distribution | Approx. $52 Million | Approx. $152 Million |
| Municipalities Receiving Aid | 125 Towns | All 169 Towns |
| Towns Receiving Zero Aid | 44 Towns | 0 Towns |
| Primary Funding Source | Tribal Slot Revenues | Tribal Slot Revenues + Gen Fund |
Fiscal Concerns and the Spending Cap
Despite the overwhelming support from municipal leaders, the bill faces significant headwinds from state budget hawks. The primary point of contention is the mechanism used to fund the increase. To reach the $152 million target, the bill requires increasing the transfer from the state’s General Fund to the tribal fund by $100 million for fiscal year 2026.
Joshua Wojcik, the acting secretary of the state Office of Policy and Management, raised red flags during the March hearing. Wojcik argued that such a transfer would push the state budget out of compliance with the constitutional spending cap and could divert essential resources needed to balance the General Fund in 2027 and beyond.
This fiscal tension is amplified by recent budget projections. State Comptroller Sean Scanlon recently noted a $6 million shortfall for the current fiscal year. Whereas this is a small fraction of the $27.2 billion General Fund budget, it would mark the first deficit under Governor Ned Lamont’s administration.
Wojcik also pointed out that the bill would limit the state’s flexibility by requiring the legislature to approve emergency certifications to reduce transfers. He noted that these same fiscal concerns led the governor to veto a very similar piece of legislation, SB 1213, in 2023.
What So for Local Taxpayers
For the average resident in the 44 excluded towns, the restoration of these funds is viewed as a potential shield against rising property taxes. By injecting “needed non-property tax revenue” into local coffers, towns can fund essential services or infrastructure projects without leaning further on homeowners.
However, the transition may not be perfectly linear for everyone. Because the new formula is more uniform, some municipalities that previously benefited from “special adjustments” or larger relative shares under the targeted model may see their specific advantage shrink as the wealth is spread more evenly across the state.
Despite these nuances, the political momentum behind the bill remains strong. On April 1, the Appropriations Committee approved the legislation in a 51-0 vote (with two members absent), signaling a clear desire among legislators to prioritize municipal stability over the strict fiscal caution urged by the Office of Policy and Management.
The bill has now been forwarded to the Legislative Commissioners’ Office for final review. The next critical step will be the final legislative vote and the subsequent decision by the governor’s office, which will determine if the state’s commitment to municipal aid outweighs the risks to the constitutional spending cap.
We invite readers to share their thoughts on municipal funding and the impact of gaming revenues in the comments below.
