Connecticut’s House of Representatives was expected to vote Monday on a $24 billion budget adjustment package, buoyed by revised revenue predictions that exceeded expectations by more than $350 million.
The revised consensus figures released Monday confirm the surge in revenues that enabled Gov. Ned Lamont and legislative Democrats to reach an agreement last week on adjustments to the state budget. The House was expected to vote on that package later Monday with the Senate following suit Monday or Tuesday.
Since last month, the expected state budget surplus has grown to $2.1 billion as a result of better-than-expected revenues and a $16 million decline in expenditures. The Rainy Day Fund, meanwhile, has grown to nearly $3.19 billion.
In a press release, Lamont said the fiscal forecast would allow the state to continue to pay down its long term pension debt, contributing to savings down the road.
“One of the things that has held our state back for decades are these unfunded liabilities, and from day one my administration has made reducing those liabilities a top priority,” Lamont said. “Today we are delivering on that promise.”
Jeff Beckham, secretary of the Office of Policy and Management, said the good news was tempered by economic uncertainty driven by inflation and the geopolitical climate including the war in Ukraine.
“As a result, we must remain fiscally cautious and not commit to significant new ongoing spending initiatives,” Beckham said.
However, the expected upbeat forecast helped ease sticking points last week as the administration and legislative Democrats arrived at a consensus on a $24.2 billion budget adjustment package, which provides around $500 million in tax relief.
During a morning press briefing, House Speaker Matt Ritter said he hoped to raise the budget for a vote sometime around dinner.
The legislature’s Finance Revenue and Bonding Committee met early Monday to approve the budget’s tax package.
“It is a historic tax-cutting package that we have not seen the likes of in 30 years,” Rep. Sean Scanlon, a Guilford Democrat who co-chairs the committee, said. “The last time we … lowered taxes by this much, I was 13 years old in middle school.”
The budget expands the property tax credit, reduces car taxes in many towns by capping the mill rate at 32.46 and reimbursing towns for the difference. The budget includes a $250 per-child tax credit that will cost $125 million, a $40 million provision to cut pension taxes for some retirees, and a $40 million expansion of the Earned Income Tax Credit for 200,000 low-income workers.
However, several Republicans on the committee objected to the rushed nature of the budget approval process. Lawmakers in the House were expected to vote on the budget Monday after receiving the large tax document early that morning.
“This is an unacceptable way to run our government,” Rep. Nicole Klarides-Ditria, R-Derby, said. “That we get this package at 4:37 a.m. — we talk about bipartisanship every single day. We should all be on the same page when it comes to looking at this document. This is year after year after year. It’s unacceptable.”
Despite process concerns, Ritter told reporters he hoped to see some Republican support for the budget package when it came up for a vote.
However, Republicans and the Connecticut Business and Industry Association have pushed to see the budget dedicate more funding to pay back borrowing to support the state unemployment trust fund, a more than $460 million burden which falls to state employers to repay.
The budget includes $40 million to offset those costs. On Monday, House Minority Leader Vincent Candelora said that amount did not go far enough.
“The state of Connecticut should be working on paying the entire debt down,” Candelora said, adding that the COVID-19 pandemic was the cause of the debt. “It was not incurred by businesses… To suggest that all these billions of dollars are flowing in because Wall Street is performing well and to not provide that money for main street is highly disturbing.”