The state’s final biennial budget for Fiscal Years 2020 and 2021 could be characterized as a status quo budget. While it does not cut funding for most programs that serve children and families, it does not address the overall regressive nature of Connecticut’s state and local tax structure or make the kind of bold, new investments in the future of children and families that our state needs.
The budget plan avoids the budget cuts to child and family programs that have been common in recent years and takes steps to address issues that had long created uncertainty for Connecticut’s budget. These steps included the use of Fiscal Year 2019 surplus dollars to help address the ongoing controversy over the hospital tax and the unfunded liability of the Teachers’ Retirement System.
The plan fails to reform Connecticut’s upside down revenue system, in which lower-income taxpayers pay a larger share of their income in state and local taxes than the state’s wealthiest residents.
The state’s rigid budget rules are constraining important investments that the state can afford – in schools, infrastructure, and health care. For example, the state’s volatility cap is projected to sweep $541 million from the General Fund into the state’s rainy day fund (the Budget Reserve Fund) over the next two fiscal years, even policymakers had to close significant budget deficits. These transfers to the rainy day fund mean that the state must implement tax increases or spending cuts that would otherwise be unnecessary.
This analysis reviews highlights of the state budget plan’s impact on early childhood education, K-12 education, health care, child welfare, and juvenile justice.