Rick Lopes

Investing in Families, Students, and Schools Senate gives Final, Bipartisan Approval to Two-Year State Budget

HARTFORD – State Senator Rick Lopes (D-New Britain, Berlin, Farmington) 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 historically underfunded pension debt.

“A lot was accomplished, but opportunities to decrease the widening divide between the wealthy and the middle class were missed” said Sen Lopes. 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, the 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 to make major investments in education, town aid, social services, health care, justice-related initiatives and workforce development programs, all while remaining under our statutory spending cap.

“I welcome that this budget recognizes the needs of the middle class, working families and schools by providing a sizable increase in funding,” said Sen. Lopes. “It is no secret that schools are underfunded and that students have been bearing the consequences of this lack of resources for years. Schools need to have the proper resources to address the challenges that COVID-19 has raised, while pursuing the long-term goal of closing gaps in academic opportunity.”

As part of the budget’s numerous investments, $10 million will be appropriated in fiscal year 2022 to Batterson Park, which falls within New Britain and Farmington. The budget also makes a 4% increase in Medicaid funding to New Britain’s Hospital for Special Care. It is the fourth-largest, free-standing, long-term acute care hospital in the United States. The not-for-profit hospital is recognized for its advanced care and rehabilitation. Additionally, the Prudence Crandall Center in New Britain will receive an increase of $100,000 in state funding for both fiscal years 2022 and 2023. The center has been dedicated to providing services to victims of domestic violence since 1973, including an emergency shelter, counseling, and assistance to children who have experienced domestic violence.

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 highly used public programs, the budget remains $22.2 million under the state-mandated spending 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 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 of increased PILOT and Education Cost Sharing (ECS) grants.

Under the budget, New Britain will see its total municipal aid, which includes ECS funding, increase to close to $21 million between fiscal year 2021 and 2023, which is an over 11% jump in funding.

• The budget increases the state Earned Income Tax Credit for working lower income individuals 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 to make a bulk payment of $63 million toward our unfunded pension liability for the first time in 75 years. 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. It also provides additional funding to school systems with higher numbers of low-income students and English Language Learner students.

Through the budget, New Britain will receive an increase in ECS funding of over $11.73 million between fiscal years 2021 and 2023. The city’s growth in funding represents an above 8% percent increase.

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.