HARTFORD – State Senator Norm Needleman (D-Essex) today 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 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.
“As we come out of the COVID-19 pandemic, our state needs to be prepared for the future, and I’m grateful that I can say this budget does that,” said Sen. Needleman. “It avoids tax hikes while retaining funding in important programs that will directly help people. It advances Connecticut’s education and supports our workforce, vital for the future of the state. It’s prudent and will help support our state’s post-COVID recovery. I’m especially happy to report every town in my district will receive increases in state funding in the next two years.”
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 12 towns in the 33rd district will receive $38.7 million next year (Fiscal Year 22) and $39 million the year after for a total of $77.75 million. Every town in the district will see an increase in state funding with an increase of $647,000 next year and $983,000 the year after.
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:
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.
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.
Cost-free communications for incarcerated persons