Joan Hartley

Investing in Waterbury, Naugatuck, and Middlebury – with No Tax Hikes

Senate Gives Final, Bipartisan Approval to Two-Year State Budget

State Senator Joan Hartley (D-Waterbury, Naugatuck, and Middlebury) joined her colleagues in the state Senate to pass a bipartisan, two-year Democratic state budget that invests in education, cities and towns, and nonprofit social service providers while not raising taxes, remaining well under the state spending cap, and putting an extra $1 billion toward paying off Connecticut’s historic unfunded pension debt.

The Senate voted 31-4 to pass House Bill 6689, the state biennial budget for July 1, 2021 through June 30, 2023. The budget, which had previously been approved by the House of Representatives, now heads to Governor Ned Lamont, who is expected to sign it into law.

With a billion-dollar year-end budget surplus, its Rainy Day Fund at historic highs, our state bond rating at its highest level in two decades, and state income tax and federal revenues swelling, Connecticut is well-positioned this year to make major investments in education, town aid, social services, health care, justice-related initiatives and workforce development programs, all the while remaining under our statutory spending cap.

“After diligent work by the Appropriations Committee, legislature, and the governor’s office, I’m pleased that the collective hard work has led to a bipartisan budget that makes major investments in Connecticut’s cities and towns,” said Sen. Hartley. “This budget, which includes no tax increases, positions our state on strong fiscal footing as we recover from the economic impact of the pandemic.”

The two-year General Fund budget totals $42.46 billion: $20.8 billion in FY 22, and $21.66 billion in FY 23. The budget including all nine special funds (i.e. the Special Transportation, Banking, Insurance, Workers’ Compensation and other funds) totals $46.36 billion, which is a year-over-year 2.6% spending increase in FY 22 and a 3.9% spending increase in FY 23.

Despite all of the state investments in a wide variety of necessary and popular public programs, the budget remains $22.2 million under the state-mandated sending cap in FY 22 and $35.7 million under the spending cap in FY 23, even while making an extra billion-dollar payment toward Connecticut’s unfunded pension debt, which has built up over the past 70 years.

The state budget relies on $2.28 billion in federal American Rescue Plan Act funding over the biennium: $1.271 billion in FY 22, and $1.01 billion in FY 23; Connecticut received a total of $2.6 billion in ARPA funds, leaving about $400 million unallocated.

Among the many investments this state budget makes are:

Investments in Waterbury, Naugatuck, and Middlebury

Waterbury, Naugatuck, and Middlebury will each receive a municipal stabilization grant in both fiscal years 2022 and 2023:

• Waterbury – $2,298,414
• Naugatuck – $283,399
• Middlebury – $15,067

The budget includes several grants in both fiscal years 2022 and 2023 for Waterbury including:

• Boys & Girls Club of Greater Waterbury, Inc – $85,000
• Waterbury PAL – $30,000
• Waterbury YMCA – $70,000

Investing in the Waterbury Branch Line – The budget contains the appropriation of $1,227,689 for fiscal year 2023 to increase the number of trains servicing the rail line throughout the week. This increase in funding will improve reliability and frequency of service for riders on the rail line.

Fiscal Responsibility

This budget recognizes the structural and systemic inequities experienced by our major cities – many of which have over 50 percent of their property as non-taxable – and keeps our promises to municipalities by fully funding the Payment-in-Lieu-of-Taxes (PILOT) formula that was championed by Senate President Martin Looney and passed earlier this session. This budget will provide over $525 million in additional funds to Connecticut cities and towns over the next two years through a combination increased PILOT and Education Cost Sharing (ECS) grants.

Waterbury will receive an increase of over $26.89 million in total municipal aid, which includes ECS funding, between fiscal years 2021-23. This growth in funding will have the city receive over $191.75 million in funding in 2023, which is a substantial increase from about $174.74 million in 2021.

Naugatuck will receive an increase of over $2.08 million in total municipal aid between 2021-23. Middlebury will see an about $567,000 increase in total municipal aid between 2021 and 2023, which is a substantial 42% increase in funding from 2021.

• Because of Democratic fiscal policies, in 2020 Connecticut finished its fiscal year with a surplus and reached the 15% threshold in our Rainy Day Fund, allowing us for the first time in 75 years to make a bulk payment of $63 million toward our unfunded pension liability. This fiscal prudence will also result in a budget volatility cap transfer of more than $1 billion at the end FY 21 to pay down our unfunded pension liability.

• The budget increases the state Earned Income Tax Credit for working poor people from the current 23% of the federal income tax to 30.5%. That tax credit change will provide an additional $40 million in income – $158 million overall – to nearly 195,000 Connecticut households.

Education

Education Cost Sharing Grant – This budget keeps our promises related to local education funding and maintains the current roll-out of the ECS formula providing cities and towns with additional $130 million over the next two years, while holding harmless towns that would have otherwise lost funds. It also provides additional funding to school systems with higher numbers of low-income students and English Language Learner students.

Under the budget, Waterbury will receive an increase of over $21.3 million in ECS funding between fiscal years 2021 and 2023. This increase will bring the city up to about $164.35 million in 2023. Naugatuck will receive close to a $2 million increase in funding over the next two years. Middlebury will get an increase of around $537,000 over the following two years.