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Affordable Housing , Homelessness , State News

Housing & Homelessness Items in Connecticut's Budget & Bond Package

10 June 2021

Update (July 1, 2021): The budget implementer for the FY 22-23 budget has made substantial changes to the passed budget, including changes to many of the funding streams listed below. Click here to see our updated analysis of the budget with the implementer changes.

Budget for Fiscal Year 2022-2023 Expands and Preserves Resources for Critical Homeless and Affordable Housing Programs

June 9, 2021

This week, the Connecticut legislature passed H.B. 6689 (the Budget bill) and H.B. 6690 (the Bond bill), detailing spending over FY22 and FY23. The budget bill proposes $22.7 billion in spending in FY 22 and $23.6 billion in spending in FY 23, representing a 2.6% increase over FY 21. Expenditures are under the spending cap by $22.2 million in FY 22 and $35.7 million in FY 23, with the out years projected deficits of $1.1 billion in FY 24, $1.1 billion in FY 25, and $1 billion in FY 26. This budget provides critical new resources to create affordable housing and preserves existing resources for critical homeless and affordable housing programs, consistent with the budgets proposed earlier this year by Governor Lamont, and the Appropriations and Finance, Revenue and Bonding Committees.

"We are pleased to see that Connecticut's budget and bond package contain robust investment in new affordable housing construction, as well as an increase in funding for homeless services," said Kiley Gosselin, Executive Director of the Partnership for Strong Communities. "These investments are a necessary step to fixing Connecticut's shortage of affordable homes, and we thank the Legislature and Governor Lamont for recognizing that need. We look forward to building on these investments in the years to come to ensure that every Connecticut resident has a safe, stable place to call home."

The state had faced a projected revenue shortfall of $3.3 billion over the biennium while spending $1 billion less than anticipated in the previous year due to the influx of federal pandemic relief. This budget utilizes $1.8 billion of federal resources from the American Rescue Plan Act (ARPA) to put this budget into balance; and leaves $448 million for future allocations.

In addition, the budget provides an increase of approximately $190 million over the biennium for nonprofit health and human services providers contracted by the state.

The Bond bill, H.B. 6690, includes a robust package of new bond authorizations of $1.7 billion in each year of the biennium, including a total of $305 million for affordable housing development, while cancelling $144 million of existing bond authorizations. This bill also establishes a new 10-year Community Investment Fund, with investments continuing through FY 32 for a total of $2.1 billion available to distressed communities.

The Budget also increases the Earned Income Tax Credit from 23% to 32% of the federal credit.

The legislature will convene two Special Sessions not earlier than June 10 for the purposes of 1) considering bills or resolutions to implement the budget, and 2) bills concerning the allocation of federal funds provided by the American Rescue Plan Act.

Budget and Bonding Packages Include:

Items from the Reaching Home and HOMEConnecticut legislative agendas appear in bold.

Department of Housing

  • Funding for the Housing/Homeless Services line at $85.3 million in each year of the biennium, representing a $3.4 million increase from the budgets proposed by the Appropriations Committee and Governor Lamont, including $5 million each year for homeless shelters.
  • Homeless Youth Program funding at $2.6 million in FY 22 and $2.9 million in FY 23, representing a $351,975 increase from FY 21 in FY 22 and a $641,975 increase in FY 23. This new funding is transferred from the Housing/Homeless Services line to fund the Youth Homeless Demonstration grant match at $410,000 in FY 22 and $700,000 in FY 23, consistent with the Appropriations Committee and Governor's proposed budgets.
  • Transfers to DMHAS $352,500 in FY 22 and $352,000 in FY 23 for wrap-around services for 47 individuals expected to receive HUD mainstream vouchers, consistent with the Appropriations Committee and Governor's proposed budgets.
  • Carries over FY 21 funding from Other Expenses to provide up to $149,000 in FY 22 and $101,900 in FY 23 for housing data.
  • ARPA funding at $10 million in FY 22 and $10 million in FY 23 for legal representation of tenants in evictions.
  • New bond authorizations for the Housing Trust Fund are funded at $55 million in FY 22 and $50 million in FY 23, consistent with the Finance, Revenue and Bonding Committee and Governor's proposed budgets.
  • New Bond authorizations for the Affordable Housing Flex Fund are funded at $100 million for each year of the biennium, which includes $30 million each year for the State Sponsored Housing Portfolio, consistent with the Finance, Revenue and Bonding Committee and Governor's proposed budgets.
  • New bond authorizations for the Healthy Homes initiative are funded at $10 million in FY 22.
  • New bond authorizations for the Healthy Homes Lead Abatement initiative are funded at $10 million in FY 22.

Department of Mental Health and Addiction Services

  • Housing Supports/Services funded at $23.4 million in each year of the biennium, representing an increase from FY 21 of $391,297 in FY 22 and $437,422 in FY 23, consistent with the Appropriations Committee and Governor's proposed budgets.
  • Discharge and Diversion Services line is funded at $28.9 million in FY 22 and $30.3 million in FY 23, representing an increase from FY 21 of $4.7 million in FY 22 and $6 million in FY 23. This funds 30 new Money Follows the Person (MFP) placements for individuals discharged from Connecticut Valley Hospital and reallocates $352,500 for services from DOH each year to 47 MFP individuals expected to receive HUD mainstream vouchers, consistent with the Appropriations Committee and Governor's proposed budgets.
  • Young Adults Services line is funded at $80 million in FY 22 and $84.3 million in FY 23, consistent with the Appropriations Committee proposed budget. This reflects an increase from the Governor's proposed budget of $1.7 million in FY 22 and $5 million in FY 23 to support caseload growth in specialized community-based residential treatment.
  • Grants for Mental Health Services funded at $66.5 million in FY 22 and $66.6 million in FY 23, consistent with the Appropriations Committee and Governor's proposed budgets. This represents an increase from FY 21 of $150,704 in FY 22 and $329,855 in FY 23.
  • Provides new bond authorizations to design the replacement for Whiting Forensic Hospital at $3 million in FY 22, consistent with the Finance Revenue & Bonding Committee and Governor's proposed budgets.

Department of Social Services

  • Eliminates Governor's proposed asset test for the Medicare Savings Program.
  • Allocates $13.9 million in FY 22 and $26.9 million in FY 23 to provide new residential support to 90 individuals in FY 22 and 69 individuals in FY 23 aging out of DCF programs, and for 30 MFP placements in both years, consistent with the Appropriations Committee and Governor's proposed budgets.
  • Restores Cost-of-Living Adjustments for public assistance recipients, consistent with the Appropriations Committee.
  • Medicaid expenditures are reduced by $55.6 million to reflect savings in FY21.
  • Behavioral Health Partnership (DSS, DCF, and DMHAS) - plans to seek a Substance Use Disorder demonstration waiver (CMS) - allow for federal reimbursement for individuals residing in mental health facilities.
  • Provides $10 million in each year of the biennium to reflect rate increases to home health and waiver service providers.

Department of Children and Families

  • Maintains Supportive Housing funding at $19.9 million in both years, consistent with the Appropriations Committee and Governor's proposed budgets.

Department of Labor

  • ARPA funding at $550,000 in each year of the biennium for customized services for a mortgage crisis jobs training program.
  • Second Chance Initiative is flat funded at $311,829 in FY 22 and $312,381 in FY 23, consistent with the Appropriations Committee and Governor's proposed budgets.
  • Veterans Opportunity Pilot funded at $245,900 in FY 22 and $253,000 in FY 23.

Department of Correction

  • Provides $39.2 million in FY 22 and $41.3 million in FY 23 for Community Support Services.
  • Reductions to reflect savings due to closure of units and facilities of $15.4 million in FY 22 and $41.5 million in FY 23, consistent with the Appropriations Committee and Governor's proposed budgets.
  • Provides new bond authorizations to renovate existing buildings for inmate housing and support facilities at $30 million in FY 22 and $10 million in FY 23, consistent with the Finance, Revenue and Bonding Committee and Governor's proposed budgets.

Office of Early Childhood

  • Care4Kids continues to be funded at $59.5 million in each year of the biennium, consistent with the Appropriations Committee and Governor's proposed budgets.
  • Early Head Start - Child Care Partnership is restored at $1.5 million in each year, consistent with the Appropriations Committee and Governor's proposed budgets.

Department of Economic and Community Development

  • Provides new bond authorizations for the Brownfield Remediation and Revitalization Program at $25 million in each year of the biennium, consistent with the Finance, Revenue and Bonding Committee and the Governor's proposed budgets.
  • Provides new bond authorizations and establishes the Community Investment Fund 2030 at $175 million in FY 23, with investments continuing through FY 32 for a total of $2.1 billion. The Bond bill authorizes up to $875 million in bonds for a five-year bonding program to fund qualifying projects and grants in distressed communities; establishes a 21-member board to make funding recommendations under the program; authorizes an additional $1.25 billion of bonds for the program that is contingent on agreement between the Governor, board, and the legislature reauthorizing the program; beginning in FY 22, requires $125 million of the funds available for the state's Economic Action Plan to be reserved for specified projects.

Department of Public Health

  • Provides new bond authorizations for the Health Disparities and Prevention Grant Program at $40 million in each year of the biennium. This includes $25 million for Federal Qualified Health Clinics (FQHCs) and $15 million for mental health and substance abuse treatment providers.

Office of Policy and Management

  • Provides funding for Cost-of-Living Adjustments (COLA's) to nonprofit providers of health and human services contracted by the state at $40 million in FY 22 and $80 million in FY 23, of which $10 million each year is for COLA's for employees who provide state-administered services including DOH, DMHAS, and DOC.
  • Provides additional funding for private providers of up to $13.2 million in each year of the biennium.
  • ARPA funding is provided for private nonprofits of $30 million each year in FY 22, FY 23, and FY 24. 
  • OPM is required to achieve savings (ie lapse) in executive branch agencies of $44 million in FY 22 and $48 million in FY 23.
  • Provides new bond authorizations for Urban Act projects at $200 million in FY 22 and $40 million in FY 23.
  • Provides new bond authorizations for Small Town Economic Assistance Program (STEAP) at $15 million for FY 23.
  • Provides new bond authorizations for nonprofit health and human services organizations at $10 million in FY 22 and $25 million in FY 23.

 Department of Energy & Environmental Protection

  • Transfers $175,000 in each year of the biennium to the Department of Public Health for sewage treatment system permits, due to the increase in the department's jurisdiction from systems up to 7,500 to 10,000 gallons per day, consistent with the Appropriations Committee and Governor's budget proposal.
  • Provides new bond authorizations for the remediation of industrial sites in urban areas at $10.5 million in each year of the biennium.
  • ARPA funding of $7 million for FY 22 for health and safety barriers to housing remediation.
  • ARPA funding of $7 million for FY 22 for affordable housing energy efficiency and retrofits.

Commission on Human Rights and Opportunities

  • Provides up to $4 million in Other Expenses for a Disparity and Equity study.

Connecticut Municipal Redevelopment Authority

  • The Bond bill cancels $45 million in each year of the biennium for capitalization of the Authority.

The legislature rejected the Governor's proposal that would have capped credits claimed against the Public Utilities Tax at 50.01%. The cap could have adversely affected the state Housing Tax Credit Contribution program (HTCC).

We expect to send a detailed update on housing-related bills in the days following the end of the legislative session, stay tuned!