An Update on Connecticut's Budget Process
Appropriations and Finance, Revenue and Bonding committees' budget proposals preserve and expand critical homeless programs and restore new affordable housing bond authorizations
May 3, 2019
When Governor Ned Lamont took office in January, he was faced with a budget deficit projected at $3.7 billion over the biennium. As of May 1, 2019, the current fiscal year 2019 budget is projected to have a surplus of $581 million. The Budget Reserve Fund (Rainy Day Fund) is projected to grow to $2.65 billion by fiscal year end (6/30/19).
On Tuesday, April 30th the Appropriations Committee passed HB 7148 detailing spending over FY20 and FY21. The budget bill proposes $21.3 billion in spending for FY20 and $22 billion for FY 21. The Finance, Revenue and Bonding Committee met on Wednesday, May 1 and passed SB 876 (Bond Package) and SB 877 (Tax Package). These bills closely track the Governor's budget proposals with two major exceptions: These bills authorize significant new bond authorizations for affordable housing; and do not directly fund the 2-1-1 and CANs.
Budget - totals $43.3 billion over the biennium ($21.3b / $22.0b), increases General Fund revenue by $1.0b in FY20; $1.3b in FY21. The budget also credits to the General Fund $50 million of the 2019 surplus in each year of the biennium.
Bond Package - totals $3.3 billion over the biennium ($1.7b / $1.6b); includes new affordable housing authorizations (DOH FLEX and state Housing Trust Fund) - $255 million over the biennium.
Together, these bills include the following funding levels for critical housing services:
Department of Housing
- Funding for the Housing/Homeless Services at $80.4 million in FY 20 and $85.8 million in FY 21. This line includes a new Medicaid Supportive Housing Benefit for High Cost High Need Individuals, Rental Assistance Vouchers for DSS' long term care rebalancing strategy, and $1 million each year for DCF reunification Rental Assistance Vouchers. This concurs with the Governor, and adds $1 million each year to DCF.
- Preservation of the Homeless Youth funding at $2.3 million each year. This concurs with Governor's budget.
- Restores the Community Investment Account, and zeros out the new Homeless Supports line item. The CIA has provided support for 2-1-1 and the CANs over the last several years.
- A Medicaid Supportive Housing Benefit for High Cost, High Need Individuals FY 20 $459,200 and $2,258,300 for FY 21. Under this proposal, a 1915(i) state plan home and community-based services benefit will be developed that will serve up to 850 individuals who experience homelessness. Transition and tenancy-sustaining supports have been found to be effective at achieving housing stability as well as improved health, community integration and life satisfaction. This concurs with Governor's budget.
- New bond authorizations for the state Housing Trust Fund of $30 million in FY 20; and for the Affordable Housing (FLEX) Fund $125 million in FY 20 and $100 million in FY 21. In addition, there are new bond authorizations for the Housing Downpayment Assistance Program of $4.5 million each year.
- Money Follows the Person (MFP) growth at 20 individuals per month. This concurs with Governor's budget.
- Eliminates Hurricane Maria funds of $660,000. This concurs with Governor's budget.
- Annualizes RAP funding. This concurs with Governor's budget.
- COLA's for Homeless Youth (HY) and Housing Homeless (H/H). This concurs with Governor's budget.
Department of Mental Health and Addiction Services
- Housing Supports/Services maintained at $23 million for each year. This concurs with Governor's budget.
- Young Adults Services funded at $76.7 million in FY 20 and $78.0 million in FY 21.
- Grants for Mental Health Services at $66.3 million in each year of the biennium; $1.4 million above the Governor's budget.
- Maintains Danbury and Torrington LMHAs.
Department of Development Services
- Housing Supports/Services at $350,000 for FY 20 and $1.4 million for FY 21. This concurs with Governor's budget.
Department of Social Services
- Funding of $500,000 in FY 20 and $250,000 in FY 21 for consultant services to assist in the development of an opioid plan. This concurs with Governor's budget.
- Medicaid Supportive Housing Benefit for high cost high need individuals (see also DOH), to reflect a Medicaid savings of $580,000 in FY 20 and $3.1 million in FY 21. This concurs with Governor's budget.
- Strengthening of Rebalancing Efforts under Money Follows the Person with $1.05 million in FY 20 and $3.5 million in FY 21, included in the DOH Housing/Homeless line. This concurs with Governor's budget.
- Rental Assistance Vouchers to support Long-Term Care Rebalancing Strategy at $239,120 for FY 20 and $1.3 million for FY 21, included in the DOH Housing/Homeless line. This concurs with Governor's budget.
Department of Correction
- Funds to expand the Medication Assisted Treatment (MAT) program at $2.05 million for FY 20 and $6 million for FY 21. This concurs with Governor's budget.
- Waives fees for State-issued IDs for the re-entry population, at $229,950 each year. This concurs with Governor's budget.
Office of Early Childhood
- Care4Kids funded at $54.6 million for FY 20 and $59.5 million in FY 21. This concurs with Governor's budget.
Department of Children and Families
- Supportive Housing at $19.9 million each year; requiring quarterly reporting to relevant committees on waitlist, outcomes, and number of families in the program. This funding concurs with Governor's budget.
- Rental Assistance Program Vouchers for Family Reunification at $1 million each year, included in the DOH Housing/Homeless line.
Department of Transportation
- Provides $92,520 for each year for 60-day bus passes to discharged offenders. This concurs with Governor's budget.
- Provides new bonding authorizations for the capitalization of an Infrastructure Bank for transit-oriented development at $5 million for FY 20 and $25 million for FY 21.
Department of Labor
- Provides $800,000 each year for the Bridgeport Re-Entry Pilot for the long-term unemployed.
Department of Economic and Community Development
- Brownfield Remediation and Revitalization Program at $30 million in FY 20 and $10 million in FY 21 in new bonding authorizations.
Office of Policy and Management
- Urban Act funding at $75 million in each year in new bonding authorizations.
- Creates a new Distressed Municipalities fund by providing $7 million in each year in new bonding authorizations.
- Small Town Economic Assistance Program (STEAP) funded at $30 million for FY 21 in new bonding authorizations.
SB 877 also caps the amount by which a utility company may reduce its utility tax liability using state tax credits at 50.01% (i.e. state Housing Tax Credit Contribution program).
We expect budget discussions to continue over the next few weeks. Session adjourns on June 5th. For questions, contact Sean Ghio at email@example.com.