Connecticut state budget

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Connecticut state budget

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Budget calendar:  Biennial
Fiscal year:  2012-2013
Date signed:  May 4, 2011
Other state budgets
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The Connecticut state budget for FY2012-13 totaled $40.54 billion, including a $20.14 billion component for FY2012 and $20.4 billion for FY2013.[1] Upon learning that the state faced a shortfall of $365 million, the governor called for $170 million in cuts on Nov. 28, 2012.[2]

Connecticut operates on a biennial budget cycle. Its fiscal year begins July 1.

Since 1980, state spending had risen from $4,400 per household to $10,000 per household, an increase of 227%.[3]

Connecticut had 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.[4] The debt was slightly down from the prior year's total of $99,751,294,000.[5]

Connecticut's total state debt per capita was $27,539.70.[6]

See also: The Connecticut State Budget on State Budget Solutions

Federal Aid to State Budget

The chart below represents how much of the state’s budget came from the federal government. The rank was in relation to the rest of the nation (if #1, the state received the highest percentage of federal funding in the nation):

State 2008 2009 2010 2011
Connecticut 20.28% (#48) 26.17% (#45) 28.38% (#46) 27.91% (#45)
  • Figures were calculated by dividing each state’s intergovernmental revenue into its general revenue.[7][8]

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 were projected to exceed the state's constitutional cap on spending.[9]

Governor Dannel P. Malloy was due to release his FY2014 budget plan on Feb. 6, 2013, and it was expected to top $20 billion. The governor had not said how he would address the $1 billion predicted budget deficit.[10]

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 had a shortfall of $365 million.[9] That prompted the governor to call for $170 million in cuts on Nov. 28, 2012.[11] 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.[11] 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.[11]

General information

The biennial budget totaled $40.54 billion, including a $20.14 billion component for FY2012 and $20.4 billion for FY2013.[1] It increased state spending from $19.3 billion in 2011 to $20.3 billion in 2013, approximately 4.5%.[12] A $3.7 billion tax hike, the largest in the state's history, was also included.[13] The FY2012 budget had been balanced, erasing an anticipated $3.44 billion deficit.[14] The budget was balanced, however, with the assumption of union concessions, which the union ultimately rejected. The legislature would reconvene for a special session on June 30, 2011, to balance the budget.[15]

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 topped $192.6 million, Gov. Malloy would have to propose a plan for bringing the budget back into balance.[16]

FY2013 Budget

On May 8, 2012, both the House and the Senate approved the same $20.5 billion budget for FY2013 that closed a projected $200 million deficit.[17][18] The House approved the budget by a vote of 95-49, and the Senate voted 22-13 in favor.[18] The budget was the result of a deal the Gov. Malloy negotiated with Democratic legislators.[18] Highlights of the legislative budget include:[17]

  • 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.[19]

Deficit and Governor's Budget-Cutting Authority

The legislature's nonpartisan fiscal office announced on Jan. 25, 2012 that the state budget deficit had grown to a projected $144.5 million. Two months prior, the same office had projected a surplus of $100 million. The deficit stemmed from lower than anticipated tax revenues, despite recent tax hikes.[20] The governor said that he did not agree with the fiscal office's calculation because it failed to include the funds in the salary adjustment account.[21]

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 was limited to reducing any line item by 5 percent.[22] The list of cuts the governor wanted 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 legislative branch.[22]

Union concessions

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.[23] 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."[24] Days after the governor issued the layoff notices, the unions agreed to agreed to $1.6 billion in concessions. Four unions rejected the bill,[25] 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.[15]

Unions amended their bylaws so that membership could ratify the concession deal with a simple majority vote in favor of doing so.[26] Fifty-seven percent of union members approved the deal on the first vote, but at the time the bylaws required 80 percent approval.[27] 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.[28] 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.[29]

Budget Provisions

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.[1]

The biennial state budget increased taxes approximately $3 billion for the next two years combined, the highest tax hikes in the state history. Increased taxes included:[30]

  • The sales tax would increase from 6 percent to 6.35 percent on retail items.[31]
  • The luxury tax would 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.[31]
  • Instituting the Amazon tax on online sales.[31]
  • The cigarette tax from $3.00 per pack to $3.40 per pack.[30]

An income tax increase meant residents would pay between 3 percent to 6.7 percent. It went in to effect on Aug. 1, 2011, and was retroactive to income earned since Jan. 1, 2011.[32]

Some budget cuts that were part of the approved concessions included:[33]

  • $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 did not include some of the governor's planned tax increases, including some affecting the boating and car industries, but did include $2 billion in labor savings that had not yet been agreed upon.[34] 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 asked to had 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.[35]

Budget Negotiations

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.[36] making it the earliest budget in recent state history.[31] A key portion of the approved budget, however, had yet to be specified: the $2 billion in labor savings assumed in the tax-and-spending plan had not yet been reached with state employee unions.[36] 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.[36]

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 would increase from 6 percent to 6.35 percent on retail items, the luxury tax would 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.[31] Overall, the budget raises taxes by $1.4 billion in the first year and $1.2 billion in the second year.[36]

The Republican alternative budget presented April 18, 2011, differed from the governor's in that it did not raise taxes. The budget mirrored 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.[37]

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.[38]

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 was 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.[39] 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.[40] For just FY2012, the governor aims for $800 million in spending cuts, $1.5 billion in tax hikes and $1 billion in union concessions.[37]

Malloy's proposed tax increase included boosting the sales tax rate to 6.3 percent. His proposal would raise taxes by $1.5 billion in FY2012.[41]

Malloy was 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 was an increase from $1 million in previous budgets.

Highlights of Malloy's proposed budget included:[42]

  • Created eight tax brackets for personal income tax.
  • Funded smoking cessation programs for Medicaid recipients.
  • Reduced dental benefits for Medicaid recipients
  • Strengthened Medicaid fraud recovery efforts
  • Increased Medicaid reimbursement rate to nursing homes
  • Proposed development of 150 new units of supportive housing to help families at risk of homelessness
  • Funded school reforms, requires teacher evaluations to be partly based on student achievement by 2013
  • $2 million in each year of the biennium for child daycare and school readiness programs
  • 17-year-olds would be considered juveniles as of July 1, 2012
  • $14 million for pay-as-you-go transportation projects

In FY2013, however, Malloy would have to close a $3 billion deficit, when he was only proposing to increase state spending by $500 million to $18.4 billion.[39]

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 came through the Education Cost Sharing program, which the governor promised to fund at the same level as this year.[43]

State Employees

The governor's proposed budget relied on acceptance by state workers of $2 billion in cost savings over two years, which would come as a result of freezing wages and longevity payments, raising the retirement age and medical co-pays, and switching their health plan.[39]


Gov. Malloy's proposed budget did not reduce state aid to education for FY2012.[39]

School districts rely on state grants for about 40 percent of their funding. Before the governor released his budget, Connecticut educators had expressed concerned about school funding in the FY2012 state budget.[44] One of the things we were very concerned about was what was going to happen when the federal stimulus aid goes away," said Bob Rader, executive director of the Connecticut Association of Boards of Education.[44] Without another stimulus or a strong economic turnaround, "The state of Connecticut would be facing a $269.5 million gap just to level-fund the ECS grants," said Tom Murphy, state Department of Education spokesman.[44]

For FY2012, Connecticut devoted 31.1% of its total spending to education,down from 34.7% in the prior year.[45]

Fiscal Year Total Spending[46] Education Spending[47] 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%

Higher Education

A report by the Office of Legislative Research found that the growth in higher education budgets had far outstripped the level of state General Fund support for the institutions.[48] 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.[48][14] "Public universities were definitely on the firing line," said Higher Education Commissioner Michael Meotti. "The next several years were going to be the toughest budget years higher education had faced in the last 50 or 60 years."[14]

Budget transparency

See also: Evaluation of Connecticut state website or Constitutional provisions regarding reading of bills

Connecticut did not have a constitutional provision providing time for review of bills prior to passage by the legislature.

The state's official spending database online was found here. The site was created by Public Act No. 10-155 and was operated by the Office of Fiscal Analysis using data provided by the Office of the State Comptroller.

Government tools

The following table was helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary P
600px-Red x.png
  • Expenditures were navigable through several categories, but not through a traditional search bar.[49]
  • Grants were viewable as an expenditure type.[50]
  • Contracts were posted.[51]
  • Line item expenditures were available.
  • Department budgets were not available.
  • Public employee salaries and benefit details were available.[52]

Independent transparency sites


Multi-Measure Budget Transparency Profile

The Institute of Government and Public Affairs at the University of Illinois had created a multi-measure transparency profile for Connecticut, which measured 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 presentd 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.

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.

Budget background

The Connecticut Legislature in 2009 passed some cost savings measures that included:[53]

  • 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.[54]

Accounting principles

See also: Connecticut government accounting principles

Hours after being sworn into office, Governor Dannel Malloy signed an executive order mandating that the state transition into Generally Accepted Accounting Principles.[55]

The Connecticut Auditors of Public Accounts was under the direction of 2 state auditors appointed by the State Legislature; having 2 auditors was unique among the states. Their audit reports were published online.[56]

Credit Rating Fitch Moody's S&P
Connecticut[57] AA Aa3 AA


Between February 2009 and June 2013, Connecticut received $2,347,030,000.00 in federal funding.[58]

Public Employees

See also: Connecticut public employee salaries
See also: Connecticut public pensions]]

According to 2008 Census data, the state of Connecticut and local governments in the state employed a total of 227,433 people.[59] 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.[59] Approximately 62% of those employees, or 140,131 employees, were in education or higher education.[59]

5,000 state employees and 6,000 public workers in dozens of local municipalities, school districts, and regional education centers.[60]

See also

External links

Additional Reading


  1. 1.0 1.1 1.2 The Connecticut Mirror "After 8½-hour debate, Senate closes the book on the next budget " June 7, 2011
  2. The Connecticut Post "Gov. Malloy to cut $170 million from budget" Nov. 28, 2012
  3. The Hartford Courant "Balancing Acts: What Can Be Cut From State Spending?" Nov. 14, 2010
  4. State Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012
  5. State Budget Solution “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
  6. State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012
  7. US Census Federal Aid to State and Local Governments
  8. Tax Foundation' "Monday Map: Federal Aid to State Budgets. Accessed October 15, 2013
  9. 9.0 9.1 Businessweek "Conn. facing 'enormously challenging' budgets" Nov. 16, 2012
  10. The Hartford Courant "States Taking Different Approaches On Taxes, With Malloy Offering Few Clues" Jan. 28, 2013
  11. 11.0 11.1 11.2 The Connecticut Post "Gov. Malloy to cut $170 million from budget" Nov. 28, 2012
  12. Office of Fiscal Analysis Fiscal Note
  13. The News Times "Government's disconnect with reality" May 16, 2011
  14. 14.0 14.1 14.2 The Connecticut Mirror "State colleges and universities bracing for budget storm" Dec. 29, 2010
  15. Cite error: Invalid <ref> tag; no text was provided for refs named upended
  16. The Waterbury Republican-American "Comptroller releases new deficit calculations" Nov. 2, 2012
  17. 17.0 17.1 The Hartford Courant "$20.5 Billion Budget Clears Senate, Now Headed For Malloy's Signature" May 8, 2012
  18. 18.0 18.1 18.2 "Conn. House approves $20.5 billion budget" May 8, 2012
  19. The Connecticut Mirror "Special session on budget explodes into dozens of topics" June 12, 2012
  20. The Hartford Courant "State Budget Deficit Grows To $144.5 Million" Jan. 25, 2012
  21. Jan. 26, 2012
  22. 22.0 22.1 The Hartford Courant "Malloy to make cuts to cover $73.6 million deficit" Jan. 24, 2012
  23. Forbes "Any Conn. labor deal needs rank-and-file support" May 9, 2011
  24. The Wall Street Journal "Hardball in Connecticut " May 11, 2011
  25. The Connecticut Post "Union leaders meeting this morning as Malloy prepares for jobs tour" June 27, 2011
  26. The New York Times "In Connecticut, Unions Amend Voting Rules to Revive Deal" July 18, 2011
  27. The Connecticut Post "With layoffs, shutdowns planned, union leaders to meet today" July 18, 2011
  28. The Connecticut Mirror "Malloy recommends nearly 5,500 layoffs, $54M cut in town aid" June 29, 2011
  29. Fox News "Conn. unions approve deal to close budget gap" Aug. 18, 2011
  30. 30.0 30.1 "Budget signed, some plan to challenge it in court, more join 2012 races" May 9, 2011
  31. 31.0 31.1 31.2 31.3 31.4 The Hartford Courant "Gas Tax Increase Dropped: Budget Approval Expected By Tuesday" May 2, 2011
  32. Businessweek "Gov: Conn. tax hike retroactive due to calendar" Aug. 1, 2011
  33. The Hartford Courant "Malloy Administration Cuts $135 Million In State Budget Tuesday; Many Cuts Avoided By Employee Concessions" Sept. 6, 2011
  34. The New York Times "Hartford Budget Deal Rolls Back Tax Plans" April 20, 2011
  35. "Ruling on lawsuit seeking block of state budget could come today" May 8, 2011
  36. 36.0 36.1 36.2 36.3 Forbes "Democratic budget plan passes Conn. House" May 4, 2011
  37. 37.0 37.1 The Hartford Courant "Democrats Agree On State Budget" April 20, 2011
  38. The Hartford Courant "Malloy's Contingency Plans Call For Cutting 10% More From Agency Budgets " April 4, 2011
  39. 39.0 39.1 39.2 39.3 Reuters "Connecticut governor unveils $17.9 billion budget, same size" Feb. 16, 2011
  40. Connecticut Mirror, Taking Measure of the New Governor, Feb. 25, 2011
  41. Businessweek "Connecticut budget committees face deadline to act" April 18, 2011
  42. Associated Press, Highlights of Malloy's State Plan, Feb. 17, 22011
  43. The Connecticut Mirror "Municipal aid was at stake in Malloy's talks with labor" April 1, 2011
  44. 44.0 44.1 44.2 The Hartford Courant "Jobs Bill Eases But Doesn't Erase School Budget Worries" Aug. 13, 2010
  45. State Budget Solutions "Throwing Money At Education Isn't Working" Sept. 12, 2012
  46. "Connecticut Government Spending Chart - Total Spending" Aug. 4, 2012
  47. "Connecticut Government Spending Chart - Education Spending"Aug. 4, 2012
  48. 48.0 48.1 OLR Backgrounder: Higher Education Spending in Connecticut Dec. 8, 2010
  49. Search Expenditures
  50., Grants
  51., Contracts
  52., Payroll
  53. Connecticut General Assembly, Office of Legislative Research, “OLR Major Acts,” November 12, 2009
  54. A Guide to Connecticut's State Budget
  55. "Malloy Signs 3 Executive Orders, Including on Rell E-Mails" Jan. 5, 2010
  56. Connecticut Auditors of Public Accounts Web site, retrieved October 12, 2009
  57. California State Treasurer, “Comparison of Other States’ General Obligation Bond Ratings”
  58. Recovery, "Stimulus Spending by State"
  59. 59.0 59.1 59.2 2007 Connecticut Public Employment U.S. Census Data
  60. The Connecticut Mirror "Municipal aid was at stake in Malloy's talks with labor" April 1, 2011