Budget Update: House Democrats Release Their Own Budget Proposal

The fiscal year ends tomorrow, and Connecticut’s budget situation remains uncertain. Yesterday, all four caucuses and the Governor made statements on Connecticut’s budget. The House Democrats released their own two-year budget proposal, which they would like the General Assembly to hold a vote for on July 18th. Both the House and Senate Republicans want their 2-year budget proposals to be voted on (learn more about those proposals here), and both parties in the Senate stated that they would like to pass a 3-month temporary budget in order to prevent the state from being run unilaterally by Governor Malloy’s executive order (learn more about what a 3-month budget or Governor Malloy’s executive order could look like here). Keep reading to learn more about the House Democrats’ newest budget proposal.

First, it is important to note that the budget released by the House Democrats lacks detail and contains the elimination of “various programs” within departments, without specifying what those programs are. This lack of transparency will hopefully change in the coming weeks, and we will update this blog post as it does. Second, this budget (like many of the other proposals suggested by the General Assembly) contains revenue options and cuts to programs that Governor Malloy has rejected, stating that he would veto any budget that contains such measures (specifically, increasing the sales tax). That being said, the Democratic House budget contains the following measures:

Notable Revenue Options:

  • Increasing the Sales Tax Rate:
    • Predicted to result in:
      • FY 2018: $419.6 Million
      • FY 2019: $429.3 Million
    • Note: Governor Malloy has openly rejected increasing the sales tax rate and threatened to veto any budget that contains this measure.
  • Decrease the Earned Income Tax Credit Rate or Eliminate Refundability:
    • Predicted to result in:
      • FY 2018: $12 Million
      • FY 2019: $13 Million
    • Note: The specific cuts to the Earned Income Tax Credit (EITC) were not specified in this budget. The Democrats previous budget proposal suggested lowering the rate to 26.25%.
  • Increase Criminal History Check Fees:
    • Predicted to result in:
      • FY 2018: $419.6 Million
      • FY 2019: $429.3 Million
    • Note: This measure will disproportionately impact early childhood educators, as the fee for criminal background checks for child care centers used to be waived for early childhood education providers, and this will greatly increase costs for providers.
  • Implement the DRS Fresh Start Initiative:
    • Predicted to result in:
      • FY 2018: $60 Million
      • FY 2019: $25 Million
  • Federal Grant Revenue Gain from Policy Change:
    • Predicted to result in:
      • FY 2018: $35 Million
      • FY 2019: $40.3 Million
  • Increase the Newborn Screening Fee:
    • Predicted to result in:
      • FY 2018: $0.4 Million
      • FY 2019: $0.4 Million

Notable Budget Cuts and Funding Wins:

  • Commission on Women, Children and Seniors:
    • Eliminates the commission, resulting in $300,000 savings each year.
  • Commission on Equity and Inclusion:
    • Eliminates the commission, resulting in $300,000 savings each year.
  • Office of Higher Education:
    • Transfers the Office of Higher Education to the State Department of Education
    • Reduces funding for various line items (not specified), cutting $59,203 each year.
  • Department of Labor:
    • Funds the Connecticut Two Generation Initiative at $750,000 each year.
  • Department of Revenue Services:
    • Fund the CT Fresh Start Initiative  at:
      • FY 18: $1,925,888
      • FY 19: $350,000
    • Note: this will ultimately raise revenue from tax collection.
  • Department of Social Services:
    • Reduces Income Eligibility for HUSKY A  Adults, cutting:
      • FY 18: $500,000
      • FY 19: $11,300,000
    • Reduces Eligibility for Medicare Savings Program, cutting:
      • FY 18: $37,650,000
      • FY 19: $50,650,000
  • Office of Early Childhood:
    • Eliminates the OEC and moves all programs to the State Department of Education.
    • Maintains the Governor’s cuts to the Care4Kids Program, cutting $7.4 million in FY 18 and $12.6 million in FY 19, while also providing an additional $10.25 million in FY 18 to reopen the program to some new applicants.
    • Eliminates funding for various programs, cutting $1,616,677 each year.
    • Increase staff for background checks to keep up with federal requirements, spending $100,000 each year.
    • Reduces Head Start funding, cutting $384,860 each year.

Stay tuned in the coming weeks for more news on Connecticut’s budget!

 

 

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