New $46 billion bipartisan state budget signed into law; long-term debt still lingers


HARTFORD, Conn. (WTNH) — $91-billion in long-term debt needs to be paid off. That is the long-term outlook. As for today, this new budget is the road map for the fiscal year 2022-2023. It is $46 billion dollars and covers the operations of the state for the next two years.

The budget includes – an average of 3% increased spending during the next two years with no new taxes. Federal American Rescue Plan dollars are rolled into this budget to the tune of $2.5 billion.

Towns and cities are funded for education and dedicated municipal aid. Some lawmakers fear there is a fiscal cliff when the federal dollars dry up.

House Republican Leader Vincent Candelora tells News 8, “The fact that Connecticut has a compromise budget without new income or property tax increases pushed by many Democrats is good news considering the remarkable level of partisanship we experienced during the session through the combination of their General Assembly majority and a governor’s administration that operated with broad emergency powers.”

“While the immediate stability an on-time budget provides to municipalities and the business community is a positive. The signing of this budget shouldn’t be treated as a celebratory or transformational moment. It should instead be viewed as a starting point to tackle the significant fiscal and economic challenges that lay beneath the veneer of federal aid we’ve received,” added Candelora.

Meantime, the governor says for the first time in state history we are chipping away at that long term debt.

“This year we are paying off $1.2 billion that saves future governors’ appropriations chairs and finance chairs about $100-million a year, that’s what those annual savings will mean to the state,” said Governor Ned Lamont.

State Representative Holly Cheesman, the ranking member of the Finance Revenue and Bonding Committee of the Legislature, said, “What does that mean for our cities? What does that mean for our schools? What does that mean for our children? – who I think have been in some ways the biggest victims of this pandemic. I welcome the opportunity to work on this together we all want a great Connecticut.”

The state’s rainy day fund is at an all time high. Calculated at approximately $3.2 billion dollars.

Connecticut’s bond rating this year reached its highest level in more than two decades, and analysts expect the state to end the current fiscal year with a surplus.

The governor specifically noted that the 2022 and 2023 biennial budget:

Invests the most local government aid to towns and cities in state history, including an additional $525 million over the next two years through a combination of increased Payment-in-Lieu-of-Taxes (PILOT) and Education Cost Sharing (ECS) grants.

  • Increases the state Earned Income Tax Credit for working families from the current 23% of the federal income tax to 30.5%, which will provide an additional $40 million in income – $158 million overall – to nearly 195,000 Connecticut households.
  • Expands access to quality, affordable healthcare to working families by covering out-of-pocket and premium costs for approximately 40,000 individuals through Access Health CT. This innovative approach to expanding Medicaid will maximize federal support, minimize taxpayer costs, and allow the state to help tens of thousands of families that otherwise struggle to afford doctor visits and medicine.
  • Expands access to affordable childcare by providing $5.3 million to cover three months of parent fees in the Care4Kids program and $3.5 million to cover parent fees in state-funded childcare centers over the summer of 2021.
  • Expands workforce development support through the investment of $110 million over the next three years in short-term workforce training programs designed to help unemployed or underemployed residents earn high-paying jobs in high-demand industries such as healthcare, IT, manufacturing, and clean energy.
  • Supports nonprofit health and human service providers through an additional $50 million in support from the FY 2021 surplus, plus an additional $30 million in FY 2022 and FY 2023 that will be matched by another $30 million in federal funds.
  • Does not include any increases in income tax and sales tax rates.

A chunk of the Federal American Rescue plan dollars about $233-million is being set aside.

That money will be the focus of negotiations through out the summer.

Senate President Martin Looney tells News 8 lawmakers will likely hold a special session after Labor Day in early fall to figure out what other programs they want to fund.

An example, some are pushing for an increase to Medicaid reimbursements for the elderly.

They want to age in place at home, but can’t afford their caretakers unless the Medicaid reimbursement is increased.

Those homecare workers also have an upcoming contract negotiation and will be seeking parity with nursing home workers and group home worker contracts.

In a statement released Wednesday afternoon, Senate Republican Leader Kevin Kelly said:

This budget is a testament to Republican efforts to beat back billions of dollars in new taxes proposed by Democrats. Democrats all started out seeking tax increases. Governor Lamont proposed $630 million in new taxes. Democratic lawmakers proposed over $3.2 billion in new taxes. And progressives wanted over $4 billion in new taxes. But Republicans pushed back and went out to the people with our message calling for no new taxes. Connecticut is already too unaffordable. We energized the public, and they made their voices heard, bringing us to the compromise budget before us today. This budget represents an important response to the pandemic and makes needed investments in education, child care, municipal aid, and core services.  While not perfect, this budget includes important measures focused on rebuilding our state. The major shift away from new taxes is a win for Connecticut families.”

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