Lamont Budget Prioritizes Guardrails, Childcare, Housing

Gov. Ned Lamont kicked off the 2024 legislative session Feb. 7 proposing limited adjustments to the second year of the two-year budget lawmakers adopted during the 2023 session.

The governor’s $26.1 billion fiscal 2025 budget proposal maintains the income tax cuts that took effect Jan. 1 and uses a series of lapses, carryforwards, and the last of federal pandemic relief funds to remain balanced and within the statutory spending cap.

Lamont told a joint session of the General Assembly that his administration remains committed to the 2017 bipartisan fiscal guardrails that lawmakers unanimously extended for five years during last year’s session.

Maintaining the guardrails, which are largely responsible for the state’s strong fiscal position, is a key priority for Connecticut’s business community.

The governor told lawmakers the guardrails allowed for six years of increased social program spending as a result of the $700 million saved annually by paying down unfunded liabilities.

“Eight months ago, we passed—on a strongly bipartisan basis—a two-year budget which, unlike most of our peer states, is still in the black,” Lamont said in his state of the state address.

“Paying down our debts and a robust rainy day fund doesn’t short change our programs, it has resulted in six years of consistent increases in our key social programs, rather than the herky jerky boom and bust cycles of yesteryear.”

Childcare, Housing

Lamont’s budget adjustments again prioritized childcare and housing, two critical factors contributing to the state’s labor shortage.

“We have too many people who cannot find a place to live—it is not available, or it is not affordable,” he said.

“Our biennial budget doubles our investment in housing—workforce housing, affordable housing, supportive housing, elder housing, and downtown apartments.”

Lamont’s proposed fiscal 2025 budget includes $43 million in early childhood funding in addition to the $50 million appropriated last year.

“Our budget provides the biggest commitment to childcare in our history, an additional $90 million next year alone, providing additional pay for early childhood educators and higher reimbursement for our centers and family care homes,” he said.

“Our budget continues to provide incentives for more companies to follow Electric Boat’s lead, which is partnering with the Navy and matching Connecticut’s commitment to support more childcare in southeast Connecticut, making it easier for EB to recruit or retain new moms and dads.”

Proposed initiatives include: 

• $12.9 million for expanding Care4kids childcare subsidy eligibility for households who are 65% of the state median income versus the previous 60% of the state median income 
• Tri-share pilot in eastern Connecticut for childcare using $1.8 million in American Rescue Plan Act funds to leverage employer and employee investments to expand childcare access
• The creation of an Opportunity Center for state agencies to better coordinate service delivery and workforce development programs under a “one-stop shop” for residents 
• Investments in the state’s Councils of Governments to modernize shared service delivery among towns to help relieve pressure on local property taxes
• Elimination of initial occupational license fees for teachers, nurses, and home childcare providers

Business Reaction

CBIA president and CEO Chris DiPentima said “it was good to hear the governor call for holding the line on the fiscal guardrails.”

“Those guardrails provide that predictability, that stability, and certainty that businesses want when they’re considering making investments, growing their facilities, and adding to their headcount,” he said.

DiPentima praised Lamont’s proposals to expand support for childcare, housing, and workforce development.

“Social programs and businesses are intersecting now when it comes to workforce,” he said.

DiPentima also supported the governor’s proposals for modernizing government, including flexible budget funds allowing regional councils of government to hire professionals for member municipalities.

“He’s looking at more government efficiency by putting some money there to create more regionalization and help those towns that can’t afford certain services share them across multiple towns,” DiPentima said.

CBIA vice president of public policy Chris Davis noted one critical element missing from Lamont’s address—addressing the rising cost of small business healthcare.

Lawmakers last year failed to act on landmark, bipartisan legislation that provided small businesses access to higher quality, more affordable health insurance for employees.

“CBIA will be fighting every day for implementing a more robust solution to what is a major concern for small businesses and their employees,” Davis said.

“We need to create a more affordable Connecticut not just for residents, but for our job creators.”

Education

The budget focuses on education with additional funding for Connecticut schools as well as fully funding the state’s vocational-agricultural program.

The adjustments honor the current schedule and commitment to fully funding education cost sharing grants.

Appreciate @GovNedLamont's commitment to the fiscal guardrails. We also welcome the emphasis on childcare and housing. However, policymakers also must focus on lowering #smallbiz #healthcare costs—there are real solutions that deserve support. #transformCThttps://t.co/Hk4Mb7vyYY

— Chris DiPentima (@ChrisDipentima) February 8, 2024

ECS will be fully funded by fiscal 2026, two years sooner than the original 10-year plan.

The budget adjustments provide $107 million in classroom resources, up from $102 million. 

The proposed adjustments also create a Career Center for the Connecticut Technical Education and Career System to help facilitate job placement. 

Other Adjustments

Lamont’s proposed budget adjustments also include: 

• $503 million in surplus Special Transportation funding to pay down debt service, leading to a savings of $25 million in fiscal 2025
• $1 million to the tourism fund
•  $282,500 for the Department of Labor’s apprenticeship training program for new resources and positions focusing on healthcare, IT, and other new sectors
• Additional funding for the Department of Corrections to offset inflationary pressures and hire new corrections officers
• $70 million in savings due to changes in debt issuances
• 12 new positions at the Department of Mental Health and Addiction Services to assist homelessness programs and provide housing vouchers for individuals with autism
• $96,000 for one position added in Office of Healthcare Strategy to support expanded financial monitoring of hospitals and strengthen Certificate of Need reviews

Connecticut was initially issued approximately $2.8 billion in federal American Rescue Plan Act funds which must be committed by the end of the calendar year, but can be spent through the end of the 2026 calendar year. 

As of now, $56 million has not been spent, allowing the administration to issue new allocations for childcare, education, climate change, and funding for the judiciary branch.

The budget leaves approximately $10.9 million for the legislature to allocate. 

Office and Policy Management Secretary Beckham noted that this could be spent on the unemployment trust fund, providing additional relief for the state’s employers.