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Connecticut state budget

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Connecticut state budget

Flag of Connecticut.png
Budget calendar:  Biennial
Fiscal year:  2014
State Credit Rating:  AA (as of May 2012)
Current Governor:  Dannel Malloy
Financial figures
GF expenses[1]:  $19 billion (estimated for FY 2013)
All funds expenses:  $28.138 billion (estimated for FY 2013)
Spending % Change:  Green Arrow Up Darker.svg2.10%[2]
% from Federal Funding:  23.61%
State Debt:  $112,372,072,000
Per Capita State Debt:  $31,298
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This page contains information about budget processes and policy issues in Connecticut, including:
  • A summary of the budget drafting process
  • Trends in expenditures and revenues
  • Current and past fiscal year budget developments
  • Financial transparency measures

Between fiscal year 2009 and fiscal year 2013, Connecticut's total expenditures increased by approximately $8.8 billion, from $19.3 billion in 2009 to $28.1 billion in 2013. This represents a 45.6 percent increase, outpacing the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

Budget process

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[5][6]

  1. Budget instructions are sent to state agencies in July.
  2. State agencies submit their budget requests to the Governor in September.
  3. Agency hearings are held in January.
  4. Public hearings are held from February through June.
  5. The Governor submits his or her proposed budget to the state legislature in February.
  6. The legislature adopts a budget in May or June. A simple majority is required to pass a budget.

In Connecticut, the Governor may exercise line item veto or item veto of appropriations authority.[6]

The Governor is legally required to submit a balanced budget. Likewise, the legislature must adopt a balanced budget.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."
  • Federal funds: "Funds received directly from the federal government."
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[7]
State General fund Federal funds Other funds Bonds Total Per capita expenditures
Connecticut $19,030 $2,555 $3,618 $2,935 $28,138 $7,824.63
Maine $3,042 $2,564 $2,176 $16 $7,798 $5,870.65
Massachusetts $25,509 $15,548 $17,135 $2,106 $60,298 $9,009.35
New Hampshire $1,262 $1,601 $2,080 $81 $5,024 $3,796.11
Rhode Island $3,268 $2,659 $2,122 $84 $8,133 $7,734.58
Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[8][9]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in Connecticut can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[7]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other
Connecticut 13.9% 10.3% 1.4% 21.4% 2.5% 10.0% 40.6%
Maine 13.1% 3.4% 2.6% 28.8% 1.7% 8.6% 41.8%
Massachusetts 10.7% 9.3% 2.5% 20.7% 2.1% 6.2% 48.6%
New Hampshire 23.5% 2.7% 1.9% 23.9% 2.1% 10.1% 35.9%
Rhode Island 14.2% 13.2% 1.4% 25.0% 2.4% 6.5% 37.4%
Source: National Association of State Budget Officers

Expenditure trends

From 2008 to 2012, Medicaid spending rose by four percent, while transportation spending rose by 3.6 percent. Meanwhile, elementary and secondary education expenditures fell by over one percent during the same period. The table below details changes in expenditures from 2008 to 2012.[7][10][11][12][13] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other
2012 13.9% 10.3% 1.4% 21.4% 2.5% 10.0% 40.6%
2011 14.2% 10.2% 1.6% 21.6% 2.6% 11.7% 38.2%
2010 20.1% 13.9% 2.5% 25.4% 3.4% 9.5% 25.2%
2009 14.6% 10.8% 1.9% 20.9% 2.8% 6.0% 43.0%
2008 15.2% 10.7% 1.9% 17.4% 2.9% 6.4% 45.5%
Change in % -1.3% -0.4% -0.5% 4% -0.4% 3.6% -4.9%
Source: National Association of State Budget Officers

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[7]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
Connecticut $3,857 $8,719 $742 $612 $5,437 $19,366 $5,385.31
Maine $1,034 $1,495 $171 $0 $351 $3,051 $2,296.92
Massachusetts $5,164 $12,831 $1,822 $0 $7,352 $27,169 $4,059.42
New Hampshire $0 $0 $552 $3 $1,728 $2,283 $1,725.03
Rhode Island $873 $1,075 $137 $1 $1,238 $3,324 $3,161.17
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[8]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][10] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Connecticut ($ in millions)[7][10]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $3,857 $8,719 $742 $612 $5,437 $19,366 $5,385.31
2012 $3,830 $8,311 $717 $658 $5,046 $18,562 $5,167.93
2011 $3,353 $7,246 $794 $653 $5,661 $17,707 $4,933.76
2010 $3,204 $6,586 $667 $673 $6,558 $17,688 $4,941.87
2009 $3,319 $6,386 $616 $665 $4,715 $15,701 $4,462.68
Change in % 16.21% 36.53% 20.45% -7.97% 15.31% 23.34% 20.67%
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[8][9]
Source: National Association of State Budget Officers

State budgets by year

Fiscal year 2014

DocumentIcon.jpg See budget bill: HB 6704

Connecticut state budget -- 2014
Connecticut State Legislature
Text:HB 6704
Legislative History
Introduced:June 1, 2013
State House:June 2, 2013
Vote (lower house):95-48-7
State Senate:June 3, 2013
Vote (upper house):19-17
Governor:Dannel Malloy
Signed:June 18, 2013

On June 19, 2013, Governor Dannel Malloy signed the 2014-2015 biennial budget into law. Malloy and legislative Democrats claimed that the budget made "historic investments in growing jobs and improving our public schools" and included "no new taxes." Meanwhile, Republicans argued that the budget did contain new taxes, pointing to a previously approved gas tax increase, the extension of a 20 percent corporate tax surcharge, and miscellaneous fee increases.[14]

A total of approximately $6.4 billion in Medicaid spending (primarily from federal funds) was shifted off-budget. This move was also criticized by Republicans.[14]

Fiscal year 2013

See also: Connecticut state budget (2012-2013)

Fiscal year 2011

See also: Connecticut state budget (2010-2011)

Fiscal year 2010

See also: Connecticut state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association for State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][11]

Historical state budget spending in Connecticut ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $18,782 68.2% $3,489 12.7% $2,631 9.5% $2,656 9.6% $27,558
2010-2011 $17,845 68.2% $3,224 12.3% $2,701 10.3% $2,404 9.2% $26,174
2009-2010 $17,241 70.8% $2,817 11.6% $2,482 10.2% $1,819 7.5% $24,359
Averages: $17,956 69% $3,176.67 12% $2,604.67 10% $2,293 9% $26,030.33
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Connecticut had a state debt of over $112 billion. Its state debt per capita was $31,298. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[15][16]

Total state debt in Connecticut[17]
Type Totals U.S. rank
Total state debt $112,372,072,000 12
Per capita debt $31,298 3
State and other fund expenditures $22,271,000,000 16

Public pensions

See also: Connecticut public pensions and Connecticut public employee salaries

A 2012 report from the Pew Center on the States noted that Connecticut's pension system was funded at 53 percent at the close of fiscal year 2010, well below the 80 percent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[18]

Taking all systems except the Probate Judges and Employees Retirement System (PJERS) into account, the funding ratio for the state's pensions programs decreased from 63.28 percent in fiscal year 2008 to 50.61 percent in fiscal year 2012, a 12.67 percent drop. Likewise, unfunded liabilities increased from approximately $15.8 billion in fiscal year 2008 to nearly $25 billion in fiscal year 2012.[19][20][21][22][23]

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit ranking indicates lower risk for an investor, which in turn lowers costs for taxpayers.[24]

The table below lists the Standard and Poor's credit ranking for Connecticut from 2001 to 2012 (grades from surrounding states are provided for additional context).[24]

S&P credit ratings from 2001 to 2012
Connecticut Maine Massachusetts New Hampshire Rhode Island
2012 AA AA AA+ AA AA
2011 AA AA AA AA AA
2010 AA AA AA AA AA
2009 AA AA AA AA AA
2008 AA AA AA AA AA
2007 AA AA AA AA AA
2006 AA AA- AA AA AA
2005 AA AA- AA AA AA
2004 AA AA AA- AA AA-
2003 AA AA+ AA- AA AA-
2002 AA AA+ AA- AA+ AA-
2001 AA AA+ AA- AA+ AA-

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[25]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[25]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid National rank
Connecticut 23.61% $5,781,844,000 46
Maine 36.50% $2,883,526,000 10
Massachusetts 28.81% $12,920,153,000 36
New Hampshire 29.00% $1,693,289,000 34
Rhode Island 33.96% $2,310,656,000 23

Stimulus

Between February 2009 and June 2013, Connecticut received $2,347,030,000.00 in federal funding.[26]

Budget transparency

Transparency evaluation
transparency.CT.gov
Searchability P
Partial.png
Grants Y
600px-Yes check.png
Contracts Y
600px-Yes check.png
Line item expenditures Y
600px-Yes check.png
Dept./agency budgets N
600px-Red x.png
Public employee salaries Y
600px-Yes check.png
Last evaluated in 2012.
See also: Evaluation of Connecticut state website and Constitutional provisions regarding reading of bills

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

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

Government tools

The table to the right is helpful in evaluating the level of transparency provided by Connecticut's spending database.

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Connecticut, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented 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.[27][28]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Connecticut tied for 33rd in the nation with 11 other states, earning four out of eight possible points.[28]

Connecticut - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget N
600px-Red x.png
Multi-year forecasting
{{{1}}}
Annual cycle N
600px-Red x.png
Binding revenue forecast N
600px-Red x.png
Legislative revenue forecast N
600px-Red x.png
Non-partisan staff Y
600px-Yes check.png
Constitution or statutory tax/spend limitations Y
600px-Yes check.png
TOTAL 4

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[28]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[29] According to the report, Connecticut received a grade of B and a numerical score of 83, indicating that Connecticut was an ""advancing"" state in terms of transparency regarding state spending.[29]

Accounting principles

See also: Connecticut government accounting principles

Hours after being sworn into office on January 5, 2011, Governor Dannel Malloy signed an executive order mandating that the state transition into Generally Accepted Accounting Principles.[30]

Contact information

Office of Policy and Management; Budget and Financial Management Division
450 Capitol Ave.
Hartford, CT 06106
Telephone: (860) 418-6272
Fax: (860) 418-6490

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  4. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  5. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting," updated April 2011
  6. 6.0 6.1 6.2 National Association of State Budget Officers "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  7. 7.0 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  8. 8.0 8.1 8.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  9. 9.0 9.1 United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  10. 10.0 10.1 10.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  11. 11.0 11.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  12. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  13. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  14. 14.0 14.1 CBS Connecticut, "Malloy Signs State Budget Into Law," June 19, 2013
  15. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  16. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  17. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  18. Pew Center on the States "Widening Gap Update: Connecticut," June 18, 2012
  19. Connecticut State Employees Retirement System, "Report of the Actuary on the Valuation, Prepared as of June 30, 2012," accessed November 1, 2013
  20. Connecticut Teachers' Retirement System, "Actuarial Valuation as of June 30, 2012," accessed November 1, 2013
  21. Connecticut Judges, Family Support Magistrates, and Compensation Commissioners Retirement System, "Report of the Actuary on the Valuation, Prepared as of June 30, 2012," accessed November 1, 2013
  22. Connecticut Municipal Employees' Retirement System, "Report on the Biennial Valuation of the Connecticut Municipal Employees Retirement System, Prepared as of July 1, 2012," accessed November 1, 2013
  23. Connecticut Probate Judges and Employees Retirement System, "Report of the Actuary on the Valuation, Prepared as of December 31, 2011
  24. 24.0 24.1 Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  25. 25.0 25.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  26. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  27. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  28. 28.0 28.1 28.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  29. 29.0 29.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  30. NBC Connecticut, "Malloy Signs 3 Executive Orders, Including on Rell E-Mails," January 5, 2010