Governor Lamont Signs Budget That Includes the Largest Tax Cut in Connecticut History

Connecticut’s Transformative Budget: FY 2023 Budget Adjustment Summary

Tax Cuts and Paying Down Our Long-Term Liabilities

• Budget is bold, balanced, and bipartisan, providing the largest tax cut in state history of more than $600 million
• Extended gas tax holiday, child tax credit of $250, EITC payment, car tax mill rate decrease, property tax credit increase, and pension and annuities exemption
• Anticipate additional contributions to the pension funds this fall to exceed $3.3 billion
• That is on top of transfers of more than $1.6 billion in total contributed last fall and in 2020 – over and above the amount the state is required to contribute
• In total, approximately $5 billion in additional contributions to the teachers’ and state employees’ retirement systems
• As a result of those transfers, required contributions to the funds will have been reduced by more than $430 million per year for 25 years compared to requirements had those extra contributions not been made
• $40 million reduction in state UI taxes on employers

Investing in Our Children

• Provides approximately $100 million in new investments in childcare
• $25.3 million to increase the number of infant and toddler slots at state-funded childcare centers by 1,300 (over an 80% Increase)
• Provides more than $83 million in federal American Rescue Plan Act investments for early childhood, including stabilization grants for school readiness providers, funding for Care 4 Kids, and investments in infrastructure
• Provides $26.2 million to support the Sheff settlement to end more than 30 years of litigation
• Expands state funding for special education by $15.5 million
• More than $97 million in federal American Rescue Plan Act funding for various K-12 initiatives and organizations, including providing $30 million for additional free school meals over the next year, $28 million for mental health-related grants, and $11 million to subsidize magnet school tuition during this time of recovery

Cutting Crime

• Support regional in-state strategies to reduce auto theft and violence
• Promote safety on rural roads by stepping up speed enforcement
• Fill federal funding gap to victim service providers
• Expand services and supports for domestic violence victims
• Invest in evidence-informed community violence intervention programs
• Establish a community gun violence intervention and prevention program under the Department of Public Health
• Provide a public health response to reducing homicides
• Strengthen Project Longevity with resources to reduce group and gun violence
• Increase law enforcement training on community relations, use of force, and new law and policy

Creating a Sustainable State Employee Workforce

• The budget invests in protecting state services and retaining the valuable employees who provide those services
• The agreement helps attract and retain talent by providing reasonable increases over a 3-year period, and provides recruitment and retention incentives, especially for hard-to-recruit, in-demand occupations
• Increases are far less than the inflation rate, and the less than likely result had contracts gone to arbitration
• Prevents the brain drain that would have occurred approaching the July 1 “retirement cliff”

Transportation Investments

• Free bus service until December 1
• Express train service to New York City
• Federal infrastructure bill support to leverage billions in investments

Housing Investments

• $50 million to support and invest in the creation of additional affordable housing across the state, including 350 new units of affordable housing
• $5 million to support the homeless population, $1 million for homeless youth transitional housing, and $1 million for the Rental Assistance Program

Protecting Our Environment

• $10 million in vouchers for commercial electric vehicles
• $12.5 million in federal American Rescue Plan Act funding to support outdoor recreation
• Funding for environmentally-informed winter salt operations

Taking Care of Our Most Vulnerable Residents

• 150 new slots in the Department of Social Services for the autism waiver
• Recreational and community engagement opportunities in the Department of Developmental Services to facilitate socialization and connections for individuals with intellectual and developmental disabilities
• Infrastructure improvements for public/privately-provided Department of Developmental Services camps
• Unprecedented Private Provider COLAs, plus additional one-time stabilization funding
• Support transition to acuity-based nursing home rates
• Expand the capacity of Child Abuse Centers of Excellence for expert pediatric consultation and training on cases of suspected child maltreatment
• Expanded Mobile Crisis–statewide 24/7 coverage and linkages with schools and police
• Developed children’s behavioral health urgent crisis centers
• $15 million for a new 12-bed psychiatric/medical unit at the Connecticut Children’s Medical Center

Healthcare Investments

• Support for Federally Qualified Health Centers to ensure immediate availability of long-acting reversible contraceptives
• Increase Medicaid rates for family planning clinic services
• Additional funding for early screening and detection of breast and cervical cancer
• Increase Medicaid rates for mammograms
• COVID-19 Preparedness: $157.5 million in federal American Rescue Plan Act funding for testing/kits and state agency expenses
• $30.0 million in federal American Rescue Plan Act funding to strengthen response to lead poisoning and achieve lead safe homes
• Fully fund per capita formula grants to local and district departments of health