

Gov. Ned Lamont released his fiscal year 2022-2023 budget adjustments along with seven budget-related bills and eleven other bills last Wednesday. This always coincides with the State of the State Address to the General Assembly. Adjustments to the biennial budget are not necessary since a budget for the second year already has been put in place. But they always occur unless there is serious disagreement between the governor and legislature.
The goal of the biennial budget when it was reinstituted in 1991 (as part of the new income tax package) and implemented in 1994 was to make the state engage in more long-term planning. The state would have to budget for two years rather than one. Prior to 1969, Connecticut’s legislature actually met only in odd numbered years. This required a two-year budget to be passed. When it decided to meet annually in 1970, annual budgeting came along with it.
This two-year planning goal turned out to be a fool’s hope. The state still functions effectively as though it has annual budgets. The process is different primarily because in even years there is a shorter session (three months) than in odd-years (five months) which necessarily makes the process shorter.
Although much fanfare occurs around the release of the governor’s budget, it is actually dead on arrival. This does not mean that it is necessarily a bad budget. But it is only the start of the process which hands it off to the legislature to theoretically approve and maybe adjust due to new developments. But in actuality, the temptation of a full-scale adjustment is hard to resist.
It is important to remember that a legislature’s primary purpose and constitutional authority is to pass legislation and it does so by allocating the wide range of subject matter that is submitted or raised by its members to 26 committees.
This is why the budget document that is produced by the governor’s Office of Policy and Management (OPM), although commonly referred to as the budget, is not actually “the budget.” The budget and tax package are bills like every other piece of legislation. The legislature doesn’t “pass “documents” or “books,” etc. just bills (and a few resolutions – which are not laws but generally administrative in nature).
You can see in the governor’s 70-page budget bill submitted last Wednesday that it is not structurally complicated. A usual budget bill consists of two parts. First, a long list of state agencies with line item accounts and appropriated dollar amounts followed by written sections known as the “back of the budget” that contains specific rules and actions related to the budget – or almost any policy or other item.
Another issue when referring to “the budget” is that most people are referring to the General Fund appropriated budget which makes up more than 90% of appropriations. There are also eight other appropriated funds of which the Transportation Fund (8%) is the largest, the rest being less than one percent each of total appropriations. There can be one appropriated fund or 25, the current number is just what has evolved over the years. Appropriations are what the Appropriations Committee develop each year and which funds much of state government.
But there are two other major state spending sources. The first is the Capital Budget, also a bill – “the Bond Bill,” ($3.2 billion in the Gov’s adjusted budget for FY 2023) which is under the purview of the Finance Committee since it is made up of projects funded by borrowed (financed) money but does not go through a process like Appropriations does – it is handled by the chairs and leaders. A list of these projects can be seen starting on page D-1 of the governor’s fiscal year 2022-2023 budget adjustments.
A far bigger part of spending is that which does not get annually reviewed (generally) at all: over $10 billion in non-appropriated funds. These funds are handled by state agencies and OPM with some of the funding reviewed by the legislature (but only minimally) and a law would have to be passed to change them. The biggest portion here are federal funds (about $7 billion). Some of these funds are block grants which get reviewed by Appropriations for feedback/transparency. The majority of the rest of the funds are “revolving” funds that take in money from fees or charges and then use that money to spend. Although these programs are authorized by law at their birth, they are essentially on auto-pilot afterward.
The budget is the most important action that a legislature takes since it contains not only lots of money but a load of policy. Which is why the money committees, the Appropriations Committee followed by the Finance Committee (taxes, revenue, capital budget) are the most powerful committees at the Capitol. A brief uncontroversial bill has to go through a lengthy approval process and be shepherded along by proponents amidst numerous competing bills for a vote in both chambers. But the budget bill can load policy into it from all sorts of angles. And at least at the beginning of the biennium it must be passed – without it the most of the government has no money to function. It not only can provide multitudinous dollar changes to programs but can create new or expanded programs that gratify a constituent, policy advocate, party member, or lobbyist. If changing a dollar amount is not enough, the back of the budget can be used for all sorts of political morsels.
Since the bill itself is mostly just a pile of numbers with account names, the budget document produced by OPM helps explain what changes are being recommended. The document along with its Economic Report and Three Year Out Year Report is lengthy – 464 pages for a short session. Which coincidentally is exactly ½ the length of the biennial budget documents submitted last year. No one in modern history has read these documents back to back. There is too much information and not enough time. Everyone at the Capitol focuses on more or less of it as they need to.
The budget can be confusing for two major reasons. First, each legislature takes what was done before and adds to it, adjusting and adding (like the Statutes in general). This makes it grow into a disjointed, hard-to-understand behemoth (kind of like commissioning an artist and then changing the artist every year with the understanding that they have to work with what the previous artist developed). Secondly, almost everyone at the Capitol is focused on what they want to be added or changed. They are not naturally inclined – or have time – to be focused on producing an understandable, cohesive, consistent, document.
Another confusing part is that the subject matters of the committees are different than the Functions of Government (11) that OPM organizes the operating budget into, which is also different than how the Appropriations Committee organizes it’s 13 sub-committees. Each sub-committee oversees a different set of agencies and is staffed by analysts from the non-partisan Office of Fiscal Analysis. Many of these functions/processes overlap and are not distinct to one committee or another which requires legislators and analysts to routinely work together across committees and assignments.
A note on Committees. At one time, Committee Chairs had significant power because a bill’s fate rested in their hands. If it was dead in committee it was dead for that session. Power was delegated by the leaders across the General Assembly to committee chairs. At least since the late 1980’s however, some of the power of committees was slowly transferred to the chambers’ leaders (the Speaker of the House, the Senate President Pro-Tempore, Majority Leaders). Their chiefs of staff are given the dirty work from which the leaders want to be insulated. In a similar way, the sub-committee chairs of Appropriations, slowly lost their power as the committee chairs lost theirs. At one time, subcommittee chairs would make budget decisions that they could rely on to move forward to the final budget and when the budget was brought to a vote would have to justify their budget changes individually in front of their chamber’s scrutiny. No longer. Many subcommittee changes are ignored/changed. A common complaint is why even go through these motions?
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Even into the 1990s, when the Appropriations Committee passed a budget by its committee deadline, it was a celebration about all the work that had been finalized. But now, their budget, like the governor’s, is also dead on arrival (a vote out of committee). The real process begins with negotiations with the governor’s staff and the speaker’s and president pro-tempore’s chiefs of staff calling the shots and bringing lists of required budget changes to the table without checking with the Appropriations Chairs (who participate and are influential but do not rule). This mostly takes place in a usual room on the third floor of the Capitol. This power shift was implied as a necessary practicality to satisfy reluctant and recalcitrant members that would not vote for the final budget without a political incentive (a budget item just for them). It is now just an expected, normalized, key step in the process. Prior to this shift in power, party members were expected to, and generally did, support the products brought forth from their fellow committee chairs.
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