In order for Connecticut to spur economic growth, address growing disparities in income, wealth and opportunity, and leverage the untapped potential of many of its children, families, and communities, it must solve its growing structural deficit and free itself to make strategic investments in health, education, and infrastructure. While the Fiscal Year (FY) 2019 budget adjustments largely protected essential investments in children and families for next year with one-time revenue, the legislature failed to address the structural issues threatening those same services and investments in the next biennium.
The General Assembly passed a budget with broad bipartisan support for the second consecutive year, in a session marked by unexpectedly high tax revenues derived from federal tax changes. The additional revenue allowed legislators to protect, and in some cases expand, many education, healthcare, and early childhood initiatives. The final budget, however, still included significant cuts to higher education, behavioral health, and juvenile justice programs. As a result, the Children’s Budget, the share of state spending dedicated to children and families, sank to a new record low, at 27.3 percent.
Legislators, however, failed to identify stable and adequate funding sources for these programs, relying on short-term fixes and one-off revenue sources, not on sustainable revenue streams. The budget does not include significant new revenue or reforms or changes in long-term obligations.
The lack of structural reforms, added to slow economic growth, means Connecticut will face steadily-growing deficits over the next four years: $2.0 billion in FY 2020, $2.5 billion in FY 2021, $3.1 billion in FY 2022, and $3.6 billion in FY 2023. Although legislators restored funding for critical programs this year, deficits might force cuts down in the next budget cycle.
