Legislative leaders could resolve their dispute with Gov. Ned Lamont over the next state budget largely by requiring public colleges and universities to tap their hefty reserves.
According to records obtained by The Connecticut Mirror on Wednesday, the administration this week presented majority Democrats with cost-saving measures worth $213 million in 2026-27. Two-thirds of that savings, about $134 million, wouldn’t necessitate curbing programs or hiking fees — but it would require the Connecticut State Colleges and Universities system and the University of Connecticut to spend down combined reserves that approach $1.1 billion.
“It’s been clear for several years now that our higher ed units in this state have some structural issues,” Jeffrey Beckham, Lamont’s budget director, said Wednesday when asked about the cost-cutting ideas. “And I would welcome the General Assembly … in calling for those reforms.”
With one week remaining in the 2025 legislative session, House Speaker Matt Ritter, D-Hartford, said Democrats and Lamont were struggling to settle the second fiscal year in the next two-year state budget. Specifically, lawmakers wanted to spend about $200 million more in 2026-27 than the governor supported in an overall budget expected to exceed $55 billion. Those extra dollars also put the second half of the biennial plan in jeopardy of exceeding the constitutional spending cap.
The speaker added that Democrats were considering adopting a budget just for the upcoming 2024-25 fiscal year, rather than accepting painful cuts in 2026-27. Connecticut has been following a two-year budget cycle, which allows for greater long-range fiscal planning, since July 1993.
But while Ritter said the extra $200 million in spending in 2026-27 was essential to ensure Connecticut wouldn’t short-change higher education, K-12 schools, health care and other legislative priorities, Lamont countered during a mid-afternoon press conference that things weren’t so dire.
“I’m a little disappointed that people are giving up and saying we can’t reach an honestly balanced budget” for two years, he said.
The CT Mirror learned that the administration asked Democrats to trim their proposals for UConn and its Farmington-based health centers by $70 million next fiscal year and by $79 million in 2026-27.
The university’s main campus in Storrs and its regional campuses began the fiscal year with $171 million in reserves, a more modest 10.2% of its operating budget. UConn’s Farmington-based health center held $297 million, which represented 18% of its $1.65 billion annual operating expense.
UConn officials say most of their reserves already are committed. Some go to capital projects, and others must be held to ensure low interest rates when borrowing for dormitory and other construction work.
Lamont’s budget staff also asked legislators to trim their request for the CSCU system — which oversees community colleges, regional state universities, and online Charter Oak State College — by $55 million in 2026-27.
CSCU officials already were planning to spend about $130 million in reserves over the next two years to cover the difference between projected system expenses and state budget assistance. But they could handle that plus the governor’s $55 million cost-trimming proposal, given that the system entered this fiscal year with $611 million in its coffers — a reserve equal to almost 52% of its nearly $1.2 billion operating budget.
The rainy day fund for the entire state budget is capped at 18% of operating expenses and was limited at 10% for much of the 2000s and 2010s.
Beckham noted that if higher education institutions don’t want to spend down these reserves to cover ongoing programmatic costs, they have other options: cutting operating expenses, boosting fees, and pursuing more research grants and philanthropic gifts.
Ritter acknowledged late Wednesday that higher ed units could offset many of the governor’s proposed cuts by tapping reserves but added that the overall package of changes Lamont sought “would have been hard” for key programs to accommodate.
The administration also proposed trimming funds for higher education scholarships, universal free school breakfast and expanded service on the Shoreline East rail line. It also asked Democrats to reconsider the governor’s proposal to increase public transit bus fares by 25 cents per passenger ride.
House Minority Leader Vincent J. Candelora, R-North Branford, has been pushing the legislature to investigate spending throughout its public colleges and universities, arguing all units could shrink their budgets without harming programs. The minority leader said that while hefty reserves should be reduced, cost-cutting is essential as well.
“The conversation,” Candelora added, “is all about sustainability.”