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Governor Lamont And Legislative Leaders Announce Budget Agreement That Invests In Education, Provides Fiscal Stability For The Future With No Income Or Sales Tax Rate Increases Or Cuts To Municipal Aid

(HARTFORD, CT) – Governor Ned Lamont, along with the leaders of the Connecticut General Assembly, including Senate President Pro Tempore Martin Looney, Speaker of the House Joe Aresimowicz, Senate Majority Leader Bob Duff, House Majority Leader Matt Ritter, and the co-chairs of the Appropriations and Finance, Revenue and Bonding Committees, today announced that they have reached an agreement on a biennial state budget that closes the inherited $3.7 billion deficit days ahead of schedule. The budget does not increase income or sales tax rates, invests more money into education and workforce development, and does not cut municipal aid to towns and cities. The budget also comes on heels of a landmark agreement negotiated by Governor Lamont and Connecticut’s hospitals that will save taxpayers billions of dollars in the future.

The full budget will be presented to the members of the General Assembly for a thorough review over the coming days.

Governor Lamont said, “Passing an honest budget on time was our number one priority, and I am proud that we were able to deliver on behalf of the state. This budget is fair, balanced, promotes economic growth and working families, and was delivered on time, enabling our towns and cities to know what they can expect in their budgets over the coming biennium and plan accordingly. This budget provides the foundation from which our state can grow and provide confidence to residents and businesses alike that we are serious about stabilizing our finances and getting our economy growing again. Importantly, this budget does not raise income tax rates on anyone in our state.”

Senator Looney said, “Today is an important next step in the General Assembly’s budget process. Senator Duff and I will caucus and discuss the particulars of the draft budget with our fellow Democratic senators before commenting upon individual components. The draft budget which has been negotiated between the Senate, the House, and the Governor’s office is a responsible budget that addresses our deficit, increases investments in education, and bolsters our economy.”

Speaker Aresimowicz said, “This budget agreement is not only balanced for the next two years, but also invests in Connecticut’s middle class, protects our most vulnerable, and will help spur further economic growth in our state. Funding for our towns is increased, social security and pensions will be exempt from the state income tax, and the ‘rainy day’ reserve balance will rise to two billion dollars, protecting taxpayers into the future.”

Senate Majority Leader Bob Duff said, “After months of negotiations, the Senate, House, and Governor have worked together to produce a fiscally responsible budget that invests in our economy, increases state funding for education, and addresses important structural long-term budget issues. This budget is a responsible budget that leaves our state with over $2 billion in the ‘rainy day’ fund, rejects increases in the income and sales taxes, and keeps our promise to cut income taxes on social security and pensions. It is a win-win for businesses, workers, and middle class families.”

House Majority Leader Matt Ritter said, “An on-time, responsible state budget is good for cities and towns planning their own budgets and is the result of a lot of hard work from our committee chairs, subcommittees and the Governor’s office. Our more than $800 million commitment to the rainy day fund means our budget reserves are at historic levels.”

Senator Cathy Osten, co-chair of the Appropriations Committee, said, “It’s important for the public to know that we used last year’s bipartisan budget as a starting point. And we kept our promise in the bipartisan budget regarding local school funding. We’ve also eliminated 1,000 unfunded vacant positions in our budget.”

Representative Toni Walker, co-chair of the Appropriations Committee, said, “This budget is protecting the most vulnerable. We’re supporting policies that have been ignored in the past: funding for families, children, housing and education. They’re small in some aspects relative to the budget, but if you look at the totality of what we’ve done in this budget we are strengthening the families of Connecticut. We’ve also maintained the educational cost sharing funding for the cities, which includes funding for alliance district schools, and we did not pass on the cost for teacher pensions to the towns and cities, because they’re struggling and we understand that.”

Representative Jason Rojas, co-chair of the Finance, Revenue and Bonding Committee said, “The revenue side of the budget reflects a balanced approach to crafting a biennial budget that moves us in the direction of adjusting our tax policies to reflect the continuing shift to a technology and service based economy. We avoided major changes to income, sales and business tax rates. We were able to reduce nuisance taxes that affect the business community and focused on revenue policies that are stable, reliable and measured.”

The full budget document is currently being drafted by the legislature’s nonpartisan staff.
 

Preliminary agreement items

  • More funding to schools

    • Maintains the Education Cost Sharing formula and brings underfunded districts closer to full funding

    • Creates a partnership with Dalio Philanthropies that will provide matching funds for disconnected and disengaged youth

    • Maintains funding for Minority Teacher Recruitment

    • Increases funding for the Manufacturing Pipeline to help workforce demand

    • Includes a plan for Debt-Free Community College that will be supported by a dedicated revenue source
       

  • Saves $185 million in state employee healthcare over the biennium

    • In coordination with the State Comptroller, the state will negotiate a maximum price it will pay for state employees and retirees at hospitals, clinics and providers, instead of paying costs that are all over the map and have nothing to do with quality care.

    • Expands on the successful “Smart Shopper” and “site of service” programs that encourage plan members to utilize high-quality, lower-cost providers that promote health behaviors an encourage participants to make informed provider choices.
       

  • Streamlines state government

    • Provides resources to develop a new digital service that will move the public’s interactions with state government online, and provide services that are personalized, more secure, efficient, and cost-effective.

Watch the press conference by clicking here.

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