Republicans Unveil “No Tax Increase” State Budget Proposal

Posted on April 27, 2017


HARTFORD – House and Senate Republicans today shared a state budget proposal that closes the current projected state deficit over the next two years without new taxes and without pushing state expenses onto towns, cities or hospitals. The “Confident Connecticut” budget includes increased education funding with a new funding formula, restores money for core social services, and provides for significant structural changes to state government that roll out into the future.

House Republican Leader Themis Klarides (R-Derby) said, “This budget puts Connecticut on a better path without tax increases; without shifting the state’s financial burdens onto towns, cities or hospitals; and without pushing off our obligations onto future generations.”

“By creating stability for our state we can encourage confidence. With confidence comes jobs and economic growth. And with a healthy economy, comes a government that can invest in core services to make our state a better place for generations to come,” Representative Melissa Ziobron (R- East Haddam), ranking member of the Appropriations Committee.

“This budget is about restoring confidence in Connecticut and creating stability and predictability in all parts of our state. It is about helping people in all communities – from the smallest town to the biggest city. It is about implementing structural changes to benefit our state today and for the future,” said Senate Republican President Pro Tempore Len Fasano (R-North Haven). “We recognize that the revenue numbers coming in this week suggest even deeper problems for our state. It is our hope that this budget can be the foundation for bipartisan efforts to address the serious financial problems on the horizon. Clearly what has occurred in state government in recent years has driven our state deep into trouble. It is a sad time. But it is also a time in which we need to recognize that change is needed.”

“This budget streamlines government, reforms education aid to benefit more towns and cities with a new funding formula, provides predictability for towns and cities, and protects core social services for those who need them most,” said Senator Paul Formica (R-East Lyme), Co-Chair of the Appropriations Committee.

Creates Stability for Towns and Cities
The “Confident Connecticut” budget rejects a proposal to require municipalities to assume a portion of the costs associated with teachers’ retirement. This will save towns from over $400 million in new financial burdens in year one – a savings that multiplies significantly each year in the future. This budget eliminates the state’s Municipal Revenue Sharing Account program and instead reformulates municipal funding by establishing a new education funding formula and Urban Improvement Grant. Almost all municipalities fare significantly better than under the governor’s proposal. No towns receive less state funding in fiscal year 2018 than enacted in fiscal year 2017. The budget also contains municipal mandate relief to help towns manage their budgets and identify savings for local taxpayers.

Enhances Education Aid
This budget includes a fully revised Education Cost Sharing Formula that takes into account factors regarding CCJEF and Meskill court decisions, enrollment, poverty and wealth. In addition, this budget dedicates $33.6 million more to education in fiscal year 2018 and $136.6 million more in fiscal year 2019. Once fully implemented, the state will be spending $678.7 million more on education funding under this proposal. In 2018 all towns and cities will either be held harmless or gain more funding for education needs.

Protects Hospitals
This budget rejects a proposal to eliminate the tax exempt status for hospitals, and therefore protects hospitals from being subject to a new local tax. This budget preserves the small hospital pool to protect funding for community hospitals and does not increase the current hospital tax. It also reinstates hospital Payment in Lieu of Taxes to towns and cities.

Protects Core Services
Budgeting is about priorities. This budget prioritizes core social services for the most vulnerable as well as important health and public safety programs. In order to preserve the safety net of services for the disabled, poor, those with mental health needs, children, the elderly and those in poverty, this budget rejects proposed cuts to many direct services and restores funding for core functions of government. For example, this budget fully funds Meals on Wheels, Care4Kids, day services and employment opportunities for those with developmental disabilities, and mental health and substance abuse grants.

Prioritizes Transportation
This budget would enact the Republican “Prioritize Progress” transportation funding plan which dedicates $63 billion to transportation needs over 30 years without tolls or new taxes. In addition to the funding plan, this budget includes a plan to make the state’s Special Transportation Fund solvent in future years by dedicating transportation related revenue to the fund and weening the General Fund off of transportation related revenue. Currently, the fund is in danger of being in deficit by fiscal year 2020. This budget resolves that issue for future years.

Implements Structural Changes
In addition to addressing the deficit over the next two years, this budget includes changes to the structure of government that will roll out into the future to create significant savings for future generations. Recognizing that the state desperately needs to think about the current size and shape of state government, this budget recommends consolidating duplicative administrative functions and privatizing certain functions to best protect core services and enhance efficiencies. In addition, this budget contains an extensive list of policy changes to put the state on a better path in future years.