Connecticut state budget
|Signed into law||May 4, 2011|
The Connecticut state budget for FY2012-13 totals $40.54 billion, including a $20.14 billion component for FY2012 and $20.4 billion for FY2013. Upon learning that the state faces a shortfall of $365 million, the governor called for $170 million in cuts on Nov. 28, 2012.
Connecticut operates on a biennial budget cycle. Its fiscal year begins July 1.
Since 1980, state spending has risen from $4,400 per household to $10,000 per household, an increase of 227%.
Connecticut has a total state debt of approximately $98,611,650, when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and FY2013 budget gap. The debt is slightly down from the prior year's total of $99,751,294,000.
Connecticut's total state debt per capita is $27,539.70.
A new Fraser Institute report on economic freedom ranks Connecticut 16th in economic Freedom. Delaware ranks 1st and New Mexico ranks 50th. The study examines the impact of economic freedom on both the level of economic activity and the growth of economic activity. According to the study, the freest economies operate with minimal government interference, relying upon personal choice and markets to answer basic economic questions. More governmental restrictions on those choices curbs economic freedom. The study looks at three major categories per state – size of government, taxes and regulations. 
Federal Aid to State Budget
The chart below represents how much of the state’s budget comes from the federal government. The number is the corresponding ranking in relation to the rest of the nation (if #1, the state receives the highest percentage of federal funding in the nation):
|Connecticut||20.28% (#48)||26.17% (#45)||28.38% (#46)||27.91% (#45)|
Figures are calculated by dividing each state’s intergovernmental revenue into its general revenue. Data is available at in U.S. Census.
State Budget FY2014
On Nov. 15, 2012, the state's Office of Policy and Management projected a deficit of nearly $1.2 billion for the FY2014 budget, approximately the same amount that expenditures are projected to exceed the state's constitutional cap on spending.
Governor Dannel P. Malloy is due to release his FY2014 budget plan on Feb. 6, 2013, and it is expected to top $20 billion. The governor has not said how he will address the $1 billion predicted budget deficit.
State Budget FY2012-13
Shortfall and subsequent cuts
As of Nov. 15, 2012, the state's Office of Policy and Management said that the FY2013 $20 billion state budget has a shortfall of $365 million. That prompted the governor to call for $170 million in cuts on Nov. 28, 2012. The cuts include $32 million from the Department of Social Services and $21 million from the Department of Developmental Services, and $18 million from the Department of Children and Families. Gov. Malloy submitted the request to the General Assembly's Appropriations Committee. Legislative leaders had already agreed to $3 million in cuts, and the Judicial Branch agreed to cut $5.75 million.
The biennial budget totals $40.54 billion, including a $20.14 billion component for FY2012 and $20.4 billion for FY2013. It increased state spending from $19.3 billion in 2011 to $20.3 billion in 2013, approximately 4.5%. A $3.7 billion tax hike, the largest in the state's history, was also included. The FY2012 budget had been balanced, erasing an anticipated $3.44 billion deficit. The budget was balanced, however, with the assumption of union concessions, which the union ultimately rejected. The legislature will reconvene for a special session on June 30, 2011, to balance the budget.
As of October 2012, State Comptroller Kevin Lembo and the Malloy administration agreed that the projected deficit in the budget more than doubled to $60.1 million, meaning it doubled from September to October, due to lower tax receipts. If the estimated deficit tops $192.6 million, Gov. Malloy will have to propose a plan for bringing the budget back into balance.
On May 8, 2012, both the House and the Senate approved the same $20.5 billion budget for FY2013 that closes a projected $200 million deficit. The House approved the budget by a vote of 95-49, and the Senate voted 22-13 in favor. The budget is the result of a deal the Gov. Malloy negotiated with Democratic legislators. Highlights of the legislative budget include:
- increases overall state education spending for municipalities by $100 million;
- preventing bus fare hikes;
- creation of a new state office to promote affordable housing;
- funding cuts to agencies;
- delayed implementation of generally accepted accounting principles.
In a special session, the legislature approved a jobs plan as part of an omnibus bill the passed on June 12, 2012. It expands the state's Small Business Express Program to provide loans and grants to an estimated 3,600 additional businesses. 
Deficit and Governor's Budget-Cutting Authority
The legislature's nonpartisan fiscal office announced on Jan. 25, 2012 that the state budget deficit has grown to a projected $144.5 million. Two months prior, the same office had projected a surplus of $100 million. The deficit stems from lower than anticipated tax revenues, despite recent tax hikes. The governor said that he did not agree with the fiscal office's calculation because it fails to include the funds in the salary adjustment account.
Gov. Dannel Malloy said on Jan. 24, 2012 that he planned to use his unilateral authority to make budget cuts of $78.7 million in order to keep the state in the black for the current fiscal year. Malloy is limited to reducing any line item by 5 percent. The list of cuts the governor wants to make include:
- $17,500 from the Department of Veterans Affairs' account for headstones,
- $2 million in personal services or staffing expenses at the Department of Developmental Services,
- $5.7 million from the judicial branch, and
- $800,000 from the the legislative branch.
The governor initially signed into law a two-year, $40.1 billion state budget with a $2 billion hole, $1 billion in each year of the budget which he intended to fill with concessions from the more than 46,000 unionized rank-and-file state employees. When unions and the governor could not reach an agreement on how to fill that $2 billion gap, on May 10, 2011, Gov. Malloy issued layoff notices to what he called "the first 4,742 state employees."  Days after the governor issued the layoff notices, the unions agreed to agreed to $1.6 billion in concessions. Four unions rejected the bill, The opposition focused on the deal's health care provisions, and also reflected the beliefs among some members that they could win a better package if they rejected this one, thinking that Malloy's layoff threats were not serious.
Unions amended their bylaws so that membership could ratify the concession deal with a simple majority vote in favor of doing so. Fifty-seven percent of union members approved the deal on the first vote, but at the time the bylaws required 80 percent approval. After the union rejected the deal, the governor recommended laying off nearly 5,500 state employee, eliminating 1,000 vacant positions and cutting municipal aid by $54 million cut to help offset the unrealized savings from the failed union concession deal. The unions voted to approve the deal on their second vote. Fourteen of 15 unions approved the deal. The governor said that the plan's lower health care and retirement costs for state workers saves taxpayers $21.5 billion over the next 20 years. After the results were announced, the State Employees Bargaining Agent Coalition wrote to the governor and requested that he rescind the layoff notices.
The Senate passed a final package of budget adjustments that plugged a $400 million hole in part by approval to a $1.6 billion union concession deal on June 7, 2011. The budget closed a projected deficit up to $3.67 billion with $1.52 billion in new state taxes and fees, $800 million in revenue growth, and spending that totals $1.36 billion less than the level originally projected to maintain current services.
The biennial state budget increases taxes approximately $3 billion for the next two years combined, the highest tax hikes in the state history. Increased taxes include:
- The sales tax will increase from 6 percent to 6.35 percent on retail items.
- The luxury tax will rise to 7 percent on cars worth more than $50,000, yachts selling for more than $100,000, jewelry for more than $5,000, and clothing items and wedding gowns selling for more than $1,000.
- Instituting the Amazon tax on online sales.
- The cigarette tax from $3.00 per pack to $3.40 per pack.
An income tax increase means residents now pay between 3 percent to 6.7 percent. It went in to effect on Aug. 1, 2011, and is retroactive to income earned since Jan. 1, 2011.
Some budget cuts that were part of the approved concessions included:
- $5.8 million by closing the Bergin Correctional Institution
- $280,000 by lessoning the cleaning frequency at state buildings
- $410,000 by reducing the operating hours at some state buildings
- $517,000 by shrinking computer contracts in state government
- $260,000 by converting boilers to low-density systems
- $108,000 by deferring the installation of a security alarm at the state police training academy
A budget deal between the governor and legislature was reached on April 20, 2011. The revised plan does not include some of the governor's planned tax increases, including some affecting the boating and car industries, but does includes $2 billion in labor savings that have not yet been agreed upon. Under the deal, the governor held the line on legislators' attempts to increase the top income tax rate beyond his proposed 6.7 percent, an increase over the prior year's 6.5%, but did agree to more people paying the top tax rate. In turn, lawmakers agreed to the governor's plan to win $1 billion in concessions from state employees in each of the next two fiscal years.
A lawsuit filed on May 7, 2011, in Hartford Superior Court asks to have the 2011-13 state budget signed by the governor declared "null and void" because it violates the 1992 law requiring a balanced budget and asks that the budget be returned to the legislature for further work.
Legislative Proposed Budget
After Democrats reached a deal with Gov. Malloy, the Senate passed the $40.1 biennial state budget on May 3, 2011, with a vote of a 19-17 vote. Later that day, the House approved the plan with an 83-67 vote. making it the earliest budget in recent state history. A key portion of the approved budget, however, has yet to be specified: the $2 billion in labor savings assumed in the tax-and-spending plan has not yet been reached with state employee unions. The bill also creates $1 billion in surplus over the next two fiscal years, which the governor said can be used to replenish the state's Rainy Day Fund and to pay off debts.
The Senate agreed to not increase gas taxes, although Gov. Malloy had initially proposed a three cent per gallon increase in mid-February. Gas prices rose $0.32 in April 2011. The final budget package still raises most of the state's taxes. The sales tax will increase from 6 percent to 6.35 percent on retail items, the luxury tax will rise to 7 percent on cars worth more than $50,000, yachts selling for more than $100,000, jewelry for more than $5,000, and clothing items and wedding gowns selling for more than $1,000. The final budget also includes the Amazon tax on online sales. Overall, the budget raises taxes by $1.4 billion in the first year and $1.2 billion in the second year.
The Republican alternative budget presented April 18, 2011, differs from the governor's in that it does not raise taxes. The budget mirrors the governor's plan to squeeze $1 billion in concessions from labor, and it also preserves state aid to cities and towns, as the governor's budget does.
Governor's Proposed Budget
On April 4, 2011, Gov. Malloy requested that all agency heads trim their budgets by an additional 10% should the ongoing talks with the unions fail.
On Feb. 16, 2011, Gov. Malloy presented his proposed two-year, $40 billion budget proposal. His $19.7 billion budget plan for FY2012 was one part of the plan. It is approximately the same amount as the prior year's budget and in it he asked public employees and taxpayers to share in the pain of closing a $3.2 billion deficit. The FY2012 budget includes an array of tax increases as well as concessions from state employees. Malloy proposed a combined solution of $1.5 billion in tax increases and $1.8 billion in spending cuts, including $1 billion in labor savings.  For just FY2012, the governor aims for $800 million in spending cuts, $1.5 billion in tax hikes and $1 billion in union concessions.
Malloy's proposed tax increase include boosting the sales tax rate to 6.3 percent. His proposal would raise taxes by $1.5 billion in FY2012.
Malloy is proposing the streamlining of state government by reducing the number of government agencies from 81 to 57. He also cut his own administrative staff by 15 percent.
Malloy pledged $15 million to market and promote the state's multibillion-dollar tourism industry. That is an increase from $1 million in previous budgets.
Highlights of Malloy's proposed budget include: 
- Creates eight tax brackets for personal income tax.
- Funds smoking cessation programs for Medicaid recipients.
- Reduces dental benefits for Medicaid recipients
- Strengthen Medicaid fraud recovery efforts
- Increase Medicaid reimbursement rate to nursing homes
- Proposes development of 150 new units of supportive housing to help families at risk of homelessness
- Funds school reforms, requires teacher evaluations to be partly based on student achievement by 2013
- $2 million in each yer of the biennium for child daycare and school readiness programs
- 17-year-olds will be considered juveniles as of July 1, 2012
- $14 million for pay-as-you-go transportation projects
In FY2013, however, Malloy will have to close a $3 billion deficit, when he is only proposing to increase state spending by $500 million to $18.4 billion.
The governor said he planned to maintain $2.8 billion in state aid to municipalities, depending on concessions made by labor during talks with the administration. About two-thirds of state aid to municipalities comes through the Education Cost Sharing program, which the governor promised to fund at the same level as this year.
The governor's proposed budget relied on acceptance by state workers of $2 billion in cost savings over two years, which will come as a result of freezing wages and longevity payments, raising the retirement age and medical co-pays, and switching their health plan.
Gov. Malloy's proposed budget did not reduce state aid to education for FY2012.
School districts rely on state grants for about 40 percent of their funding. Before the governor released his budget, Connecticut educators have expressed concerned about school funding in the FY2012 state budget.  One of the things we are very concerned about is what is going to happen when the federal stimulus aid goes away," said Bob Rader, executive director of the Connecticut Association of Boards of Education. Without another stimulus or a strong economic turnaround, "The state of Connecticut will be facing a $269.5 million gap just to level-fund the ECS grants," said Tom Murphy, state Department of Education spokesman.
For FY2012, Connecticut devoted 31.1% of its total spending to education,down from 34.7% in the prior year.
|Fiscal Year||Total Spending||Education Spending||Percent Education Spending|
|2009||$37.4 billion||$11.6 billion||31.0%|
|2010||$38.5 billion||$11.4 billion||29.6%|
|2011||$38.5 billion||$11.6 billion||34.7%|
|2012||$39.2 billion||$12.2 billion||31.1%|
A report by the Office of Legislative Research found that the growth in higher education budgets has far outstripped the level of state General Fund support for the institutions. While combined spending by the state's three higher education systems grew by nearly 230% over two decades, to $1.94 billion in FY2009, the General Fund contribution increased by less than 83%, to $556 million. "Public universities are definitely on the firing line," said Higher Education Commissioner Michael Meotti. "The next several years are going to be the toughest budget years higher education has faced in the last 50 or 60 years."
Connecticut does not have a constitutional provision providing time for review of bills prior to passage by the legislature.
The state's official spending database online is found here. The site was created by Public Act No. 10-155 and is operated by the Office of Fiscal Analysis using data provided by the Office of the State Comptroller.
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:
|State Database||Searchability||Grants||Contracts||Line Item Expenditures||Dept/Agency Budgets||Public Employee Salary|
- Expenditures are navigable through several categories, but not through a traditional search bar.
- Grants are viewable as an expenditure type.
- Contracts are posted.
- Line item expenditures are available.
- Department budgets are not available.
- Public employee salaries and benefit details are available.
Multi-Measure Budget Transparency Profile
The Institute of Government and Public Affairs at the University of Illinois has created a multi-measure transparency profile for Connecticut, which measures state transparency as of September 2011 using indicators from a range of organizations, including Sunshine Review. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.
The Connecticut Legislature in 2009 passed some cost savings measures that included:
- Reduction in personnel costs by $701.9 million over 3 years
- Salary wage freezes
- Mandatory furlough days
- Employee retirement incentive
- Increased employee health insurance contributions
- New employee contributions to fund retiree health care
The Connecticut General Assembly meets annually, but sets its budget cycle biennially. Once the state's agencies submit their budget requests for the upcoming biennium the Governor reviews, revises and make any necessary additions before submitting the budget recommendation to the legislature on the first session day following February 14th in odd-numbered years. During even number years the Governor submits a report to the legislature on the status of the enacted budget along with any recommendations for revisions and adjustments.
The Connecticut Auditors of Public Accounts is under the direction of 2 state auditors appointed by the State Legislature; having 2 auditors is unique among the states. Their audit reports are published online.
Connecticut has received $1.4 billion in federal funding.
According to 2008 Census data, the state of Connecticut and local governments in the state employed a total of 227,433 people. Of those employees, 166,065 were full-time employees receiving a net pay of $788,852,326 per month and 58,965 were part-time employees paid $76,572,375 per month. Approximately 62% of those employees, or 140,131 employees, were in education or higher education.
5,000 state employees and 6,000 public workers in dozens of local municipalities, school districts, and regional education centers.
- State Budget Solutions, Connecticut
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Yankee Institute for Public Policy
- Connecticut Office of Policy and Management
- Connecticut General Assembly
- Connecticut state site
- Connecticut Government spending
- Gov. Jodi Rell's budget address for FY 2010-11
- MSNBC,"Find out who make the state's biggest buck," February 26,2009
- ↑ 1.0 1.1 1.2 The Connecticut Mirror "After 8½-hour debate, Senate closes the book on the next budget " June 7, 2011
- ↑ The Connecticut Post "Gov. Malloy to cut $170 million from budget" Nov. 28, 2012
- ↑ The Hartford Courant "Balancing Acts: What Can Be Cut From State Spending?" Nov. 14, 2010
- ↑ State Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012
- ↑ State Budget Solution “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
- ↑ State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012
- ↑ Fraser Institute, Economic Freedom of North America 2012
- ↑ 8.0 8.1 Businessweek "Conn. facing 'enormously challenging' budgets" Nov. 16, 2012
- ↑ The Hartford Courant "States Taking Different Approaches On Taxes, With Malloy Offering Few Clues" Jan. 28, 2013
- ↑ 10.0 10.1 10.2 The Connecticut Post "Gov. Malloy to cut $170 million from budget" Nov. 28, 2012
- ↑ Office of Fiscal Analysis Fiscal Note
- ↑ The News Times "Government's disconnect with reality" May 16, 2011
- ↑ 13.0 13.1 13.2 The Connecticut Mirror "State colleges and universities bracing for budget storm" Dec. 29, 2010
- ↑ Cite error: Invalid
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- ↑ The Waterbury Republican-American "Comptroller releases new deficit calculations" Nov. 2, 2012
- ↑ 16.0 16.1 The Hartford Courant "$20.5 Billion Budget Clears Senate, Now Headed For Malloy's Signature" May 8, 2012
- ↑ 17.0 17.1 17.2 CBSNews.com "Conn. House approves $20.5 billion budget" May 8, 2012
- ↑ The Connecticut Mirror "Special session on budget explodes into dozens of topics" June 12, 2012
- ↑ The Hartford Courant "State Budget Deficit Grows To $144.5 Million" Jan. 25, 2012
- ↑ Jan. 26, 2012
- ↑ 21.0 21.1 The Hartford Courant "Malloy to make cuts to cover $73.6 million deficit" Jan. 24, 2012
- ↑ Forbes "Any Conn. labor deal needs rank-and-file support" May 9, 2011
- ↑ The Wall Street Journal "Hardball in Connecticut " May 11, 2011
- ↑ The Connecticut Post "Union leaders meeting this morning as Malloy prepares for jobs tour" June 27, 2011
- ↑ The New York Times "In Connecticut, Unions Amend Voting Rules to Revive Deal" July 18, 2011
- ↑ The Connecticut Post "With layoffs, shutdowns planned, union leaders to meet today" July 18, 2011
- ↑ The Connecticut Mirror "Malloy recommends nearly 5,500 layoffs, $54M cut in town aid" June 29, 2011
- ↑ Fox News "Conn. unions approve deal to close budget gap" Aug. 18, 2011
- ↑ 29.0 29.1 Connecticutplus.com "Budget signed, some plan to challenge it in court, more join 2012 races" May 9, 2011
- ↑ 30.0 30.1 30.2 30.3 30.4 The Hartford Courant "Gas Tax Increase Dropped: Budget Approval Expected By Tuesday" May 2, 2011
- ↑ Businessweek "Gov: Conn. tax hike retroactive due to calendar" Aug. 1, 2011
- ↑ The Hartford Courant "Malloy Administration Cuts $135 Million In State Budget Tuesday; Many Cuts Avoided By Employee Concessions" Sept. 6, 2011
- ↑ The New York Times "Hartford Budget Deal Rolls Back Tax Plans" April 20, 2011
- ↑ Greenwichtime.com "Ruling on lawsuit seeking block of state budget could come today" May 8, 2011
- ↑ 35.0 35.1 35.2 35.3 Forbes "Democratic budget plan passes Conn. House" May 4, 2011
- ↑ 36.0 36.1 The Hartford Courant "Democrats Agree On State Budget" April 20, 2011
- ↑ The Hartford Courant "Malloy's Contingency Plans Call For Cutting 10% More From Agency Budgets " April 4, 2011
- ↑ 38.0 38.1 38.2 38.3 Reuters "Connecticut governor unveils $17.9 billion budget, same size" Feb. 16, 2011
- ↑ Connecticut Mirror, Taking Measure of the New Governor, Feb. 25, 2011
- ↑ Businessweek "Connecticut budget committees face deadline to act" April 18, 2011
- ↑ Associated Press, Highlights of Malloy's State Plan, Feb. 17, 22011
- ↑ The Connecticut Mirror "Municipal aid is at stake in Malloy's talks with labor" April 1, 2011
- ↑ 43.0 43.1 43.2 The Hartford Courant "Jobs Bill Eases But Doesn't Erase School Budget Worries" Aug. 13, 2010
- ↑ State Budget Solutions "Throwing Money At Education Isn't Working" Sept. 12, 2012
- ↑ USGovernmentSpending.com "Connecticut Government Spending Chart - Total Spending" Aug. 4, 2012
- ↑ http://www.usgovernmentspending.com/spending_chart_1997_2017ALb_13s1li111mcn_20t USGovernmentSpending.com "Connecticut Government Spending Chart - Education Spending"Aug. 4, 2012
- ↑ 47.0 47.1 OLR Backgrounder: Higher Education Spending in Connecticut Dec. 8, 2010
- ↑ Search Expenditures
- ↑ Transparency.CT.gov, Grants
- ↑ Transparency.CT.gov, Contracts
- ↑ Transparency.CT.gov, Payroll
- ↑ Connecticut General Assembly, Office of Legislative Research, “OLR Major Acts,” November 12, 2009
- ↑ A Guide to Connecticut's State Budget
- ↑ NBCConnecticut.com "Malloy Signs 3 Executive Orders, Including on Rell E-Mails" Jan. 5, 2010
- ↑ Connecticut Auditors of Public Accounts Web site, retrieved October 12, 2009
- ↑ California State Treasurer, “Comparison of Other States’ General Obligation Bond Ratings”
- ↑ Recovery, "Stimulus Spending by State"
- ↑ 58.0 58.1 58.2 2007 Connecticut Public Employment U.S. Census Data
- ↑ The Connecticut Mirror "Municipal aid is at stake in Malloy's talks with labor" April 1, 2011