Gov. Ned Lamont’s proposed budget for fiscal year 2027 diverges from a handful of key priorities for legislative Democrats while providing a significant boost to school breakfast, reading support and graduate student loans.

His budget, presented Wednesday morning to lawmakers, preserves a $95 million increase for the Education Cost Sharing formula he signed into law last year. However, it didn’t include any further increases to ECS funding — something that may put him into conflict with Democrats in the General Assembly. Lawmakers returned to the Capitol Wednesday for the first day of their 2026 legislative session.

Democratic leaders had indicated a desire to increase the foundation amount in the ECS formula and tie it to inflation, which would affect not only the coming year’s budget, but every subsequent year, as well.

The foundation amount ostensibly represents the cost of educating one student, not including special needs. It has been set at $11,525 since 2013, even as actual education costs have risen. Critics argue some districts lose millions of dollars a year because of that gap.

Democrats said during this year’s session they want to phase in an increase to the baseline number to account for over a decade of missed inflationary adjustments, then adjust the foundation amount annually tied to inflation.

“We think we want to move, at least incrementally, to have some increase as part of the budget we adopt this year and then phase in a substantial increase over years. And when we get to what we think is a reasonable number, then index it at that point, sort of like what we did with the minimum wage,” said Senate President Pro Tem Martin Looney, D-New Haven.

However, Looney said he was pleased with a reference the governor made during his State of the State speech — delivered to the legislature Wednesday —to a Blue Ribbon Panel on K-12 education. Looney said that would be helpful for evaluating the various components of the ECS formula — particularly how much additional money should go to schools to support children from low-income households, those who speak English as a second language and those with disabilities. 

Senate Minority Leader Stephen Harding, R-Brookfield, criticized the governor’s speech and what he saw as a lack of investment in education in the budget the governor’s office released Wednesday.

“This is a governor that’s increased funding in terms of breaking the volatility cap and the spending cap by $3 billion over the course of two years, and he hasn’t increased any ECS in this budget. So I don’t know how he could point to increasing investment in education when it just simply doesn’t happen in his budget,” said Harding.

Sen. Eric Berthel, R-Watertown, said he agreed that the ECS formula needed to be reviewed, but he wasn’t sure if indexing the foundation formula to inflation was sustainable.

“ I think that there’s too much volatility in cost-of-living inflation adjustments, that you may have schools that have different exposure that’s not reflected in that metric, and that could put them actually in a worse position,” he said.

He said a possible alternative would be to create a different index that includes additional parameters, possibly specific to Connecticut.

Another point of divergence between Lamont and legislative Democrats: how to handle the tuition local districts pay when students enroll in choice programs, which include regional magnet schools. 

Funding for choice programs is currently divided between the state and the town where the student resides. Education Committee co-Chair Rep. Jennifer Leeper, D-Fairfield, has said she’d like to phase out the tuition local districts pay and see the state take over that cost.

But Lamont’s budget proposes eliminating $12 million the state currently pays to regional magnet schools while allowing those schools to start raising tuition. Those tuition raises had been capped as part of a previous fixed increase to state funding for the Regional Educational Service Centers, according to Assistant Executive Budget Officer at the Office of Policy and Management Kathy Demsey. Because the state increase was fixed, RESCs have found they now have no way to raise additional revenue.

Removing the tuition cap could fix the issue, but it would potentially shift more cost burden onto local districts.

Lamont’s budget also adds $12 million to the state’s school breakfast program, which his administration believes would ensure every student in Connecticut has a full meal each morning.

In addition, the Governor called for $4.5 million to establish a statewide literacy coaching network to place K-3 literacy coaches in 50 low-performing schools. He also included $5 million to fund a COVID-era behavioral health pilot program at 13 schools.

His fiscal year budget preserved a $40 million increase in special education funding he and legislators began in the previous biennium, plus a further $30 million increase added this year. It also retains an extra $10 million starting July 1 to support innovative approaches to special education instruction.

In his speech Wednesday, Lamont also expressed support for a bell-to-bell cellphone ban in schools. That’s a priority for Democrats in the Education Committee, though several Republicans have expressed opposition. Connecticut currently requires individual boards of education to enact their own cellphone policies based on state guidelines.

On higher ed, Lamont aims to offset federal cuts

The governor made some adjustments in the FY 2027 budget that seek to address federal cuts to higher education loan programs.

Lamont is directing $10 million in bonding to the Connecticut Higher Education Supplemental Loan Authority to allow for more funding for graduate student loans in Connecticut. The money is meant to help graduate students who are affected by the loss of the Federal Graduate PLUS loan program, which is being eliminated this year.

Graduate students who take out direct loans will have those loans capped at $20,500 annually or a total of $100,000, with the exception of loans for specialty degree programs in medicine, law and dentistry, which will have a total cap of $200,000.

The governor’s interim budget chief, Joshua Wojcik, said during a budget presentation Wednesday that he anticipated the state program would serve about 400 students, but he said he did not know how large the demand for those loans would be.

The Governor’s budget also reduced general fund support for the University of Connecticut from $268.2 million this fiscal year to $253.3 million in FY 2027. For UConn Health, the governor has proposed trimming funds from $143.5 million to $138.6 million in that same period.

Connecticut State Colleges and Universities would see an increase from $479 million to $498.4 million in fiscal year 2027.

Low surplus creates questions about early childhood funding

Lawmakers and advocates were also chewing on Lamont’s plan to search for additional revenue sources to contribute to an endowment for early childhood education.

That fund, which got its first $300 million investment last year, was originally designed to draw on surplus funds to create a transformative opportunity for low-income families across the state, allowing families to enroll children in preschool and early childhood programs cost-free. Families making less than $100,000 a year would eventually pay nothing for infant and toddler care and pre-K, while families making more would pay no more than 7% of their household income toward those costs.  

But the model for contributing to that fund relied on the premise of a healthy surplus. Now, with a lower-than-hoped surplus to draw on, the Office of Policy Management said it’s looking at other creative sources of bringing more money into the endowment. This year’s base surplus of $87 million was far less than last year’s high mark of $300 million.

The governor’s office is considering tens of millions of additional dollars from a combination of sources including municipal sales tax receipts and revenue carried forward from FY 2026 to FY 2027. 

“This is exactly why I wanted this appropriated in the budget, not through this gimmick through the surplus,” said Senate Majority Leader Stephen Harding, R-Brookside. “Because if we appropriate it in the budget there would be a line item every year to invest in early childhood education.”

Eva Bermúdez Zimmerman, director of Child Care for CT, and a supporter of the endowment, said she was concerned about the lack of surplus funds but encouraged that the issue is on the minds of legislators as the session begins. “It’ll be a negotiation. Too early to tell how we’re gonna get there, but we are still, as Child Care for CT, doubling down on — we have to get there.” 

Spending from the endowment is already underway. Child care providers have received money for over 1,000 additional child care slots and they’re working to fill them, officials from the governor’s budget office said Wednesday. The governor’s proposed budget adjustments also call for $2.4 million to introduce tiered payment rates for providers with more qualifications.

Lamont said during his budget address Wednesday that the goal was to address difficulty recruiting and retaining early care and education workers. That lack of a workforce has been detrimental to the child care system writ large.

“We’re well on our way to making universal early childhood education a reality for all of our families here in Connecticut, making it just a little bit easier for parents to get back to work, giving your child the very best head start in life,” Lamont said.