Doug McCrory

Investing in Education, Towns, and Nonprofits – with No Tax Hikes

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

HARTFORD – State Senator Doug McCrory (D-Hartford) joined his 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 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.

“The COVID-19 pandemic has impacted so many families across our area and in Connecticut, which raises the importance that we fund important programs that will help families to get back on their feet and plot out a path forward in recovering from COVID-19. This budget reflects that importance,” said Sen. McCrory. “It is an understatement to say schools are a lifeline for students and their families. I’m especially pleased by the additional support this budget will provide to students and their schools. Who have had to navigate the fallout from the pandemic for over the past year.”

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:

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.

Hartford would receive an increase of over $54.5 million in total municipal aid, which includes ECS funding, between fiscal years 2021 and 2023, which is over 10% increase in funding from 2021.

Bloomfield will receive an increase of around $1.25 million in total municipal aid between 2021 and 2023, which is an increase of nearly 10% in funding from 2021. Windsor will receive an increase of slightly over $103,000 in total municipal aid between fiscal years 2021 and 2023.

• 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.
• 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.

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, Hartford and Bloomfield would see an increase in ECS funding for the next two fiscal years. Hartford would receive an increase of over $10.3 million the next two fiscal years. Also, Bloomfield will see an increase of over $491,000 between 2021 and 2023.

• Charter Schools – Provides funding to increase the per-pupil charter school grant from $11,250 to $11,525. The budget also provides funding for grade growth within some charter schools in the state. This will provide parity between traditional public schools and public charter schools.
• Debt-Free Community College – Provides $14 million in FY 22 and $15 million in FY 23 to fully implement debt-free community college. This makes community college free and accessible to all students in Connecticut and leverages federal dollars brought in by additional student enrollment to help ensure the long-term success of our community college system.

Justice & Equity

• Community Reinvestment – Provides $14 million from the FY 21 surplus for community investment to fund a variety of initiatives focused on reducing violence and providing support for Connecticut’s cities.
• Cost-free communications for incarcerated persons
• Inmate Medical Services – Provides additional support to allow for an increase in staffing.
• Supports Survivors of Domestic Violence – Provides funding for staff positions to implement new domestic violence laws and for a grant program to provide legal representation to applicants for restraining orders.

Nonprofits & Nursing Homes

• Direct Support for Nonprofits – Provides $50 million in support from the FY 21 surplus to the non-profit providers of health and human services that contract with state agencies. In addition, it provides an additional $30 million in FY 22 and FY 23 to these agencies. With additional $30 million in FY 22 and FY 23 in federal funds.
• Increased Rates for Home Health, Nonprofits and Waiver Services Providers
• Increased the ratio of people providing direct care and social work services to residents in nursing homes
• Statutory Increases for Nursing Homes, Intermediate Care Facilities & Boarding Home