After a few days of tense negotiations ultimately led Monday to a tentative state budget deal, Gov. Ned Lamont pivoted quickly Tuesday to promote highlights of the plan.
Touting $270 million in new municipal aid included in the compromise deal, Lamont and Lt. Gov. Susan Bysiewicz guaranteed that all communities could use those funds to reduce taxes, even if they’ve already adopted a local budget and tax rate for the fiscal year that begins July 1.
“A lot of schools and a lot of our municipalities are going through complicated times,” Lamont told reporters after touring Alfred W. Hanmer Elementary School in Wethersfield. “Inflation is hitting hard. Health care costs are hitting hard. The price of gasoline is making transportation a little more expensive. And we wanted to do what we could to be there.”
The next state budget, which General Assembly leaders insisted would be adopted before the regular 2026 session closes May 6, will stipulate that communities can reopen local budgets, if necessary, for the planned increase in state assistance.
Lamont administration officials and leaders of the General Assembly’s Democratic majority still are refining small details of the spending plan, but both confirmed Monday it will include $170 million in new education aid for local districts.
State officials have increased the Education Cost Sharing program, the chief operating grant for local schools, by more than $450 million since Lamont took office. But the Connecticut Conference of Municipalities and other education advocates say state aid for schools has lagged inflation for decades, and communities are down hundreds of millions of dollars from where they stood 20 years ago.
The new state budget also will increase non-education assistance by $100 million, though this will be a one-time bump with no guarantee it will continue beyond the next budget cycle.
Lamont said state officials are trying to do more to help towns but also want to prioritize a new venture launched last year to dramatically expand affordable child care over the next three to four years.
The governor and General Assembly invested $300 million in a new endowment last June and had hoped this fiscal year’s budget would provide enough surplus to make a matching deposit this spring.
But declining corporation tax revenues and cost overruns in Medicaid and retiree health have whittled that down to less than $12 million.
The governor agreed, though, to take $300 million from a special savings program he and legislative leaders have used since 2020 to dramatically reduce pension debt to make another full deposit into the early childhood education initiative.
The savings program, which blocks legislators from easily spending a portion of state income and business tax receipts, is on pace to collect almost $2 billion this fiscal year. And the fiscally moderate governor generally has been reluctant to weaken that effort, since Connecticut still carries one of the highest pension debt burdens, per capita, in the nation.
But Lamont agreed Monday to redirect a portion of the latest projected savings to make possible the child care program investment and additional municipal aid.
“We’re doing everything we can because I know how expensive life is right now,” the governor said, adding he believes this venture — if it remains a fiscal priority — ultimately will save many families thousands of dollars per year in child care costs.
House Speaker Matt Ritter, who held a press conference at the Capitol late Tuesday morning even as Lamont was talking with reporters in Wethersfield, predicted the affordable child care expansion effort would be “a game changer for our state” and its economy.
“Gov. Lamont should be your legislator of the year, the decade, the century,” Ritter added, “because he really went to bat for that.”
The speaker predicted these investments will ensure the next state budget draws strong support from both parties.
But that doesn’t mean it isn’t attracting criticism.
House Minority Leader Vincent J. Candelora, R-North Branford, said Connecticut can afford to do more to assist its schools and its taxpayers.
The House GOP proposed its own budget earlier this month that would boost education aid by $330 million next fiscal year while also ordering tax cuts worth more than $420 million. The bulk of that involved increases to a state income tax credit that offsets a portion of local property tax burdens from a maximum of $300 per filer to $650.
“Ultimately, we think we have a crisis in Connecticut that, long term, is going to need to be addressed,” Candelora said.
