HARTFORD, CT — Balancing the state budget is usually the top priority for lawmakers and the governor at the beginning of a new two-year budget cycle, but the COVID-19 pandemic is competing and contributing to a budget deficit.
The Office of Fiscal Analysis is predicting a $4.3 billion deficit of the next two years.
The Office of Legislative Research says in its “Major Acts for 2021 Legislative Session” report that lawmakers may replace some revenue losses by postponing or reversing tax policy changes scheduled to take effect in 2021. That includes diversion of sales taxes to specific accounts. They could also roll back or eliminate sales tax exemptions, expand the sales tax to new services, or they could create new revenue streams from policy changes like recreational cannabis, sports betting or an Internet Lottery.
A group of union leaders and advocates gathered outside the Capitol this week to call for an income tax increase and a 20% tax on profits earned by the wealthy during the pandemic.
Due to the drop in state revenue caused by the pandemic recession the state is also reaching its debt cap.
“State law limits the total amount of General Fund supported state debt the General Assembly can authorize to 1.6 times the estimated net General Fund tax receipts for the fiscal year of the authorization. Based on the November consensus revenue estimates, this means that the legislature will have approximately $200 million of space under the debt limit for new authorizations for FY 22,” the Office of Legislative Research states.
In fiscal year 2021 the legislature approved nearly $1.5 billion in new bond authorizations. To avoid reaching the cap “the legislature may seek to (1) reduce or cancel existing authorizations for projects that have not moved forward or (2) increase tax revenue to create more room for borrowing,” according to the report.
But the budget likely won’t be hotly debated until February when Gov. Ned Lamont gives his budget address and shows lawmakers how he would tackle the state’s financial problems over the next two years.
Aside from the budget, the COVID-19 pandemic has exposed holes in the state’s safety net when it comes to health care, housing, food insecurity, and child care.
Both in the state and across the country, an increased number of renters and homeowners are facing the possibility of eviction and foreclosure. This session, the legislature may consider proposals aimed at assisting renters and homeowners impacted by the pandemic, as well as preventing and addressing homelessness.
Food pantries, food distribution centers and state programs have had to adapt to an increase in demand for food to meet household needs. The legislature may consider other proposals related to hunger or economic hardship more generally, but “given budget constraints, the focus may be simply keeping programs at their current levels.”
When it comes to public health, the legislature will likely consider recommendations from the Nursing Home and Assisted Living Oversight Working Group, including personal protective equipment levels and health care staffing.
Child care workers also suffered.
Many child care centers rely on parent tuition, but with more parents working from home, there’s less of a need for child care.
“We’ve lost 66 child care centers since the start of the pandemic and if we compare that to 2019 in that same period of time, three closed, and in 2018 four closed,” Office of Early Childhood Commissioner Beth Bye has said.
Continuing funding for these child care centers until parents return to the workforce is something the legislature is likely to debate.
During the pandemic Connecticut also learned it could conduct an election a little differently.
A record 1.86 million Connecticut residents voted in the November 3, 2020, election, with more than 659,000 absentee ballots counted. This year, the legislature may consider a referred constitutional amendment, initially passed in 2019, to authorize the legislature to provide by law for in-person, early voting before an election or referendum.
Today, lawmakers will be greeted by protesters, including parents of children who want to keep the religious exemption to vaccination on the books.
In 2020, the Public Health Committee eliminated the religious exemption from such immunization requirements, while grandfathering in children who already have one under current law. The measure did not receive a vote in the full legislature. A similar bill is expected to be introduced this year and House Speaker Matt Ritter has promised a vote on it.
