Sen. Cathy Osten brings out the 832-page budget document. Credit: Mike Savino photo

The Connecticut Senate overwhelmingly approved a proposed $51.1-billion, two-year budget Tuesday. Lawmakers credited fiscal guardrails for helping them get to a compromise on a spending plan that includes an income tax cut.

The Senate’s 35-1 vote came less than 24 hours after the House of Representatives approved the spending plan with a 139-12 vote. The budget now goes to Gov. Ned Lamont, who voiced his support for the bill Tuesday afternoon. 

“It’s a budget that I really think is focused on growth and opportunity,” Lamont said. 

The budget includes a broad reduction in the state income tax for individual filers earning less than $150,000 and for households earning under $300,000. It reduces the current rates of 5% and 3% to 4.5% and 2% respectively. 

Sen. John Fonfara, D-Hartford, chairman of the legislature’s tax-writing committee, said that’s the most notable of 17 changes that cut taxes, lower fees or raise tax credits. 

For example, the budget also changes an all-or-nothing tax break on retirees’  pensions, annuities, and IRA deductions that goes away if they earn more than a certain threshold.

Currently, individuals can deduct 100% of retirement benefits if they collect under $75,000, but get nothing if they clear that mark. The budget replaces that with a tiered structure. 

But not everyone was on board with the budget. Sen. Rob Sampson said that the tax cut wasn’t enough, and spending still went up too much. 

“We just continue to spend and spend, and the government continues to grow and grow,” Sampson, R-Wolcott, said. 

Spending in the fiscal year starting July 1 goes up $919 million over the current year. The budget for fiscal year 2025 is $1.8 billion more than the current year. 

On the opposite end of the spectrum, Sen. Gary Winfield criticized a series of guardrails meant to limit how much lawmakers can increase spending each year. 

He, who did vote for the budget, said the fiscal restraints mean not providing funding to various groups that were requesting more money. 

“I’d prefer that we listened and responded and had a budget that said ‘not only do we have guardrails, but if you go over the side ship, we make sure to pull you back out … of the water,” he said. “But we said I prefer not to.” 

In 2017, amid prolonged negotiations that didn’t result in a budget until November, lawmakers agreed to implement a spending cap, a volatility cap that dictates that excess revenue from unstable revenue streams to the budget reserve and then to pensions, and a revenue cap that limits state spending in order to create a surplus.

Those restrictions limited how much lawmakers could increase spending without getting a super majority to override the guardrails. The legislature agreed to continue those guardrails earlier this year. 

Sen. John Fonfara, D-Hartford. Credit: Mike Savino photo

Lamont and members of both parties disagreed, saying the guardrails helped guide them to the bipartisan compromise. 

“This package sends the message that we have taken steps in the last five years, and reaffirmed that commitment this year, to stabilize our fiscal ship,” said Fonfara. 

Republicans also touted the guardrails. 

“That budget forced us, through today, to stay within very strong fiscal constraints,” Sen. Eric Berthel, R-Watertown, said of the 2017 budget vote. 

Even with the constraints, lawmakers touted various increases in spending. This includes $158 million to accelerate scheduled increases in Education Cost Sharing grants for districts that were historically underfunded. 

The money helped accelerate the grants while delaying cuts, until 2025, districts that have been overfunded.

The budget also includes an additional $135 million in funding for higher education, an amount that’s still less than what college and university officials have said is needed to prevent cuts and layoffs. 

Some groups, though, blamed the fiscal guardrails as the reason they didn’t get the funding they were looking for. 

The budget includes a 2.5% cost of living increase for employees of nonprofit service providers — and 4.5% for a group of unionized workers on strike for three weeks — a figure the Connecticut Community Nonprofit Alliance says falls well short of what’s needed. 

Lamont touted the income tax cut as something that would also help those workers. “Don’t tell me that doesn’t make a difference,” he said. 

Secretary of the State Stephanie Thomas, meanwhile, said the spending plan didn’t even meet the “bare minimum” needed to fund early voting in 2024. The budget provides Thomas’ office with $1.3 million, and gives a total of $1.8 million to municipalities to keep one polling place open for 14 days. 

Lamont said he and lawmakers did what they could to help those groups. 

“Everybody comes to me and says ‘we’ve got to make up for 30 years of being short-changed, given the boom and bust cycle of what’s gone on in this building,’” he told reporters. 

Meanwhile, House Speaker Matt Ritter, D-Hartford, said lawmakers can always come back next session and address areas where the budget falls short in the second year.