Republican lawmakers released their second complete balanced budget proposal this year to stabilize the state budget in fiscal year 2019 and beyond.
The revised Republican proposal takes into consideration the revised projected deficit, the impact of a delay in federal hospital reimbursements which will boost revenue in fiscal year 2019 by over $400 million, and the need to restore the Medicare Savings Program in full. This revised plan fully balances next year’s budget, reduces future deficits, restores funding for the core functions of government, and does not include any new tax increases. It also implements policies to achieve long-term savings to create stability and predictability in future years.
“While on paper it may appear that the state is suddenly flush with new cash in fiscal year 2019 as a result of the hospital deal delay, we cannot let the overspending mistakes of the past be repeated,” said Senate Republican President Pro Tempore Len Fasano (R-North Haven). “We have to be responsible about how we budget if we want our state to grow, thrive and prosper. This budget proposal is about stabilization. We address the FY 2018 problem so we can focus on putting the state on the right path in FY 2019 and beyond. This revised Republican budget takes into account the revenue shift from 2018 to 2019 and manages this funding in a way that preserves core services without adding new unaffordable burdens onto our state. Year after year Connecticut has made promises it cannot afford to keep. This budget stops that practice. It gets our fiscal house in order today and puts Connecticut on a path to stability and predictability for generations to come.”
“This proposal not only balances the budget today, but results in significant long-term savings,” said House Republican Leader Themis Klarides (R-Derby). “Instead of making new promises that the state cannot afford in future years, it resolves today’s issues, upholds the state’s commitments to vulnerable populations, and reduces Connecticut’s future deficits and unfunded liabilities.”
“We’ve taken into consideration feedback from lawmakers on both sides of the aisle and we believe this revised budget is something both Republicans and Democrats can get behind as a pathway forward for our state,” said Senator Paul Formica (R-East Lyme) and Representative Melissa Ziobron (R-East Haddam), co-chair and ranking member of the state’s Appropriations Committee.
Recognizing the impact of the hospital deal delay and updated numbers, this revised budget would restore additional funding to core services beyond the initial Republican budget proposed in the Appropriations Committee. It would allow for full restoration of the Medicare Savings Program, additional funding for the Retired Teachers’ Health Care Fund, and eliminate certain savings that were criticized by Democrats in an effort to build consensus and garner bipartisan support. In addition, it contains no new tax increases, results in a surplus in fiscal year 2019 of $17 million, and contains policy recommendations that reduce the fiscal year 2020 deficit by $800 million.
After mitigating the fiscal year 2018 deficit utilizing revenue in the state’s budget reserve fund, this plan will still leave the state’s rainy day fund with $864.5 million at the end of fiscal year 2019.
This revised Republican budget makes the following changes to the enacted fiscal year 2019 budget which differ from the initial Republican budget released last month. The revised Republican budget proposal does the following:
- Restores funding for the Medicare Savings Program in full, allowing all 169,450 seniors to maintain current coverage. Cost of $130 million.
- Provides a 1% private provider COLA to all non-profit providers effective July 1, 2018.
- Restores $18.5 million to magnet schools.
- Increases Vocational Agriculture per pupil grants by $1,000 per slot.
- Contains two recommendations to reduce unfunded liabilities and achieve long term savings as contained in the previous Republican budget, however does not attribute any immediate savings to these policies as the last proposal did:
- Dedicates more funding to the state’s unfunded liabilities including state employee retirement funds, however does not include immediate ARC payment savings.
- Makes two changes to state employee benefits beginning after 2027 by eliminating COLAs unless legislatively directed and eliminating overtime from calculation of final average salary. However, does not assume any immediate savings from these changes.
- Provides $16 million to the Retired Teachers’ Healthcare Fund to provide a full statutory contribution of 33%.
- Increases funding for the Judicial Branch court support staff to $5.8 million.
- Allows car tax cap grant to be maintained at 39 mills and fully funds towns and cities.
- Restores full funding for Municipal Aid. $28.4 million more than appropriated in FY 2019 as originally enacted. $70.5 million more in municipal aid than FY 2018.
- Provides $5 million for Emergency Placements for those with Intellectual and Developmental Disabilities.
- Provides $1 million for Connecticut Valley Hospital and Whiting Forensic Institute.
- Fully funds rail and bus operations. Provides protection to funding for transit districts. Should any deficiencies in this account materialize, this budget would require funds to be taken from CTfastrak to assist in other transit areas.
- Higher Education:
- Reduces UCONN block grant by $10.4 million. One way that UCONN can achieve this savings is by requiring professors to teach an additional course.
- Eliminates the $13.5 million UCHC fringe benefit differential
- Provides an additional $6.25 million to the Community Technical College System
- Provides $16.2 million to the Board of Regents for fringe benefit support
- Contains no new tax increases.
- Results in a surplus of $17 million in FY 2019.
- Contains policy recommendations that reduce the fiscal year 2020 deficit by $800 million.
In addition, the following items contained in the previous Republican budget were maintained in this revised plan:
- Fully funds the Special Transportation Fund resulting in surpluses in the fund in each of the next 5 years (accelerates the diversion of sales tax from sale of automobiles at car dealerships into FY 2019 at 2.5%). This allows us to fully fund transportation infrastructure projects. This budget also enacts Prioritize Progress, a long-term transportation funding plan that would result in over $63 billion in transportation funding over the next 30 years without new taxes or tolls.
- Maintains new retiree tax breaks contained in bipartisan budget for pension & social security income.
- Rejects governor’s proposal to eliminate $200 property tax credit which supports elderly and working families.
- Fully funds the FY 2019 enacted Education Cost Sharing grants.
- Fully funds Renters Rebate program, protecting 48,000 people. No longer shifts the expense onto municipalities.
- Restores funding for Elderly Nutrition Program, providing $2 million and rejecting the governor’s proposed cut to this vital service. Also makes this a separate line item to better protect this funding in the future.
- Preserves grants for substance abuse treatment and mental health care.
- Protects funding for fire training schools and eliminates governor’s cut.
- Restores funding for School Based Health Clinics.
- Protects Roberta Willis Scholarship for all current student recipients and future student recipients attending public schools.
- Restores funding for Connecticard Program.
- Restores funding for the Hispanic Programs in DSS providing funding to nonprofits.
- Includes funding for regional workforce development boards.
- Provides funding for the Critical Infrastructure Protection Unit, responsible for approving school security plans.
- Provides funding for the Special Licensing and Firearms Unit to ensure valid sales are entered into our database in a timely basis.
- Provides funding for Puerto Rico evacuees.
- Maintains money for STRIVE, rejecting the governor’s proposal to eliminate this funding. This program help people coming out of prison get back into the workforce.
- Restores $2 million to fully staff the Connecticut state veterans hospital’s critical care unit.
- Continues tourism and cultural programs funding.
- Does not implement any cuts to Care 4 Kids.
- Continues enhanced reimbursement rate for primary care providers.
- Maintains $7 million savings target for a hard hiring freeze
- Selective reduction to the size of government with policies such as limiting deputy secretaries, executive secretaries, eliminating executive assistants, and consolidating legislative and communication functions under the governor.
- Selective privatization options such as DMHAS option to outsource geriatric and detox beds statewide.
- Reduces grants totaling $8.6 million to the City of Hartford so that actual aid provided to Hartford is kept at the $40 million agreed to in the bipartisan budget.
- Removes the $30 million loan from the casinos contained in the bipartisan budget.