Over the past 20 years, several factors have resulted in a shift in the mix of state funding away from education and human services to healthcare for state employees and debt payments. These factors include an aging population and workforce, the rapidly rising cost of health care, the ripple effects of policy choices from previous decades, and three recessions that have resulted in tighter budgets. Rising healthcare and debt costs are threatening Connecticut’s ability to make investments in the future such as education.
The report examines how funding for several categories of programs in the state budget has shifted over the past two decades as a share of the overall state budget.
- Education has experienced the largest decline, falling from 29.2% of the state budget in Fiscal Year 1992 to 23.1% in 2012. This reduction has been borne most heavily by state colleges and universities. As a result, costs have shifted to students and families. In-state tuition and fees have increased by nearly 90 percent in inflation-adjusted dollars over this period.
- As a share of the budget, funds have shifted toward the “Non-Functional” budget category. Spending in this area has grown fastest as a share of the budget, from 16 to 22.4 percent of each state budget dollar over the last two decades. The increases in this category have been primarily for healthcare for current and former state employees, as well as debt service.
- Funding has also shifted away from Human Services, the largest section of the budget, which dropped from 33.4% of the state General Fund spending to 30.9% between Fiscal Years 1992 and 2012. This has been driven by declines in TANF welfare payments, payments to hospitals that serve a disproportionate share of low-income people, and personnel costs in the Department of Social Services.
- As a consequence of fiscal pressures, the state’s debt has more than doubled in real dollars, increasing by 142 percent over the last two decades.