What’s in the state budget

What’s in the state budget

reporter photo

House leaders immediately transmitted the budget to Gov. Dannel P. Malloy’s office after their vote on Thursday, meaning he now has until Wednesday to decide whether he will support the budget. 

While Malloy continues to review the roughly $41.23 billion, two-year budget, here are some of the ways the legislature closed a projected $3.5 billion deficit. 

New revenues

A handful of Republicans in each chamber objected to the $3.4 billion in new revenue in the package. Where does that revenue come from? 

Roughly $1.1 billion is tax and fee increases, with the biggest single boost coming from a 2 percent bump in the hospital tax.

The hospitals back the plan, which would see them paying $343.9 million annually, because it would actually result in more funding for hospitals and the state. 

The state would return the payments to the hospital in order to receive additional Medicaid reimbursements from the federal government, which the state would split with the hospitals.

In total, the state would see roughly $1 billion in revenues from federal government.  

Other tax revenue increases include $62 million from a 45-cent hike in the cigarette tax, $85 million in back taxes through a forgiveness program, $70 million through reductions in eligibility for the Earned Income Tax Credit, and $110 million in reductions in eligibility for the property tax credit. 

Non-tax revenues include $127 million diverted from the energy efficiency fund, $20 million intended for a regional greenhouse gas initiative, $115 million from the delay of generally accepted accounting principles, and $30 million in the second year for a licensing fee for an upcoming casino. 

Spending cuts 

The bipartisan compromise didn’t balance the budget with just revenue.

The legislature removed a statutory Medicaid rate increase, avoiding a spending increase of $28.4 million this fiscal year and $44.8 million next year.

The budget also cuts aid for the elderly, blind, and disabled. 

According to the state Office of Fiscal Analysis, the University of Connecticut and its Farmington health center see a combined cut of $88 million over two years. UConn said the figure is significantly larger at $143 million. 

The Connecticut State College and University system, which includes the state’s community colleges and four regional universities, would see a cut of $58 million. 

The budget makes several other cuts throughout to get to balance, but does represent a spending increase of $743.2 million, or 3.8 percent, this year, followed by $307.5 million, or 1.5 percent, next year. 

Other policies 

Lawmakers have also included several new policies in the budget. 

Some are aimed at limiting spending, such as caps on bonding.

The budget also contains a cap limiting how much the state can spend from some of the more volatile streams of the income tax, revenue sources that have routinely underperformed in recent years. 

The budget also includes income tax exemptions for both pensions under $75,000 and for social security, with the benefit phased in. 

It would also provide some of the mandate relief and changes municipalities have sought, such as changing prevailing wage requirements, allowing towns to reopen labor agreements for regionalization, and for school boards to consult with towns when going out to bid for contracted work. 

It would also establish that 15 percent of a town’s budget reserve fund is not available to pay for anything subject to arbitration, thus limiting the impact a municipality’s Rainy Day Fund could have when determining the town’s ability to pay. 



Twitter: @reporter_savino


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