The legislature’s appropriations committee has unveiled a two-year budget package totaling $55.5 billion, establishing the framework for forthcoming negotiations. This new plan proposes a 4.35% increase in spending for the next fiscal year compared to the current year. The proposal, released by Democrats who dominate the committee, is set to be voted on later in the afternoon.
The committee’s budget outlines a significantly higher allocation than Governor Ned Lamont’s February proposal, with notable increases directed towards public education. The plan includes an additional $280 million for the University of Connecticut, UConn Health Center, and the financially troubled Connecticut State Colleges and University system. This system has previously been criticized for overspending.
Further, the budget allocates $40 million more than Lamont’s plan for the state’s higher education department, focusing primarily on enhancing college scholarships and student loan forgiveness. It also proposes $40 million over Lamont’s amount for special education in public schools from kindergarten through 12th grade, and an extra $19 million for non-profit organizations that deliver state services at lower costs than state employees.
Moreover, lawmakers reject any proposals to reinstate bus fares, potentially saving millions for commuters. While these recommendations are central to the committee’s plan, they face potential changes during final negotiations between Governor Lamont and legislative leaders. The aim is to reach a consensus before the legislative session concludes on June 4. However, concerns persist over potential federal budget cuts under President Donald J. Trump’s administration, which might necessitate a return to the state Capitol in September to adjust the spending plan accordingly.
A key challenge for the legislature is the spending cap, which limits annual expenditure. The current year’s budget is barely under this cap, with a margin of just $500,000. The new Democratic proposal is projected to exceed the cap by $131 million next year, according to preliminary assessments from the legislature’s nonpartisan fiscal office.
Another critical issue involves the fiscal guardrails implemented in 2017, which have contributed to budget surpluses during Lamont’s tenure. Senate President Pro Tempore Martin Looney and House Speaker Matt Ritter align with Lamont in suggesting changes to these guidelines to enable more spending. They propose raising the state’s volatility threshold to support essential investments and ensure adequate service levels for residents.
Additionally, the committee is expected to vote on the annual “deficiency” bill, which details the state’s over-spending. Despite this over-spending, a deficit is not anticipated due to robust tax collections. The state is projected to close the current fiscal year with a surplus nearing $400 million, despite over-spending of approximately $540 million across various departments.
State officials remain concerned about rising medical expenses, particularly due to increased hospital visits and escalating pharmacy costs for prescription drugs like GLP-1s, now approved for treating obesity. Spending on these drugs, which also address diabetes, is expected to rise from $40 million last fiscal year to $65 million this year.
The fiscal outlook varies among departments. For instance, the state tax department operates under budget, saving about $10 million due to reduced staffing and other cost-cutting measures, including 70 unfilled positions. Conversely, the state police department faces a $4.5 million deficit in personnel costs, largely due to high overtime expenses. Efforts to optimize staffing and reduce overtime by 8% are underway, aiming to reassign troopers from desk duties to fieldwork.