Can Connecticut’s budget respond to federal threats?
Rigid fiscal rules don’t give much room to protect people
Everyone has to make tough budget decisions sometimes. But it doesn’t make any sense to be forced to choose between paying for groceries or heat when there’s an envelope of cash untouched on the counter. That’s essentially what the state is doing with its budget. Lawmakers are sitting on a massive budget surplus, and they’re going to have to make tough decisions unless they thoughtfully change the rules that control how our money is spent.
Connecticut’s budget is tightly controlled by a set of what are called the “fiscal rules.” Those rules serve a purpose. They’re meant to make sure the state doesn’t spend too much money. They’ve also become outdated. They were designed to pull the state out of a 2017 budget crisis. Now, they’re sending us toward another one.
The budget pays for important services like education, child care, healthcare, roads, and emergency rental assistance. It’s facing two threats: the state is about to lose $1 billion in pandemic relief funds from the federal government, and the Trump Administration’s retaliatory threats to funding are putting even more money in danger. If the state doesn’t adjust the fiscal rules to let it responsibly use money that isn’t being used, then working people will suffer.
Governor Lamont, Senate President Pro Tempore Martin Looney, and Speaker of the House Matt Ritter have acknowledged these threats and that they may require state intervention. And our state soon needs to move from consideration to action.
There are four main parts of the fiscal rules: a spending cap, a revenue cap, a volatility cap, and a bond lock. They overlap with each other and have their own ways they can be changed. It’s possible to change the rules by making thoughtful, responsible adjustments.
The rules right now also encourage legislators to use short-term fixes as ways to get around them. That’s not the way to make an honest budget, and it won’t help us in the impending emergency.
Right now, if the Trump Administration follows through on its threats to cut money for infrastructure, Medicaid, and more, Connecticut’s budget doesn’t have the freedom for our lawmakers to fill the gap. It’s a budget crisis that our leaders must fix to responsibly manage our tax dollars.
Looking just at healthcare, for example, there are 1.2 million people in Connecticut on Medicaid. Centers that serve patients on HUSKY are already at risk. The Trump Administration has already cut billions in healthcare funding for states. Connecticut needs to have the freedom to use its surplus – more income than it’s budgeted to spend – to save people from losing the benefits they’ve earned.
Unless lawmakers change the fiscal rules, people could lose their healthcare, housing, child care, and home heating or electricity. The fiscal rules won’t let the state pay for services that help people during this cost of living crisis. They’re also preventing lawmakers from investing in our future.
The state has been adjusting budget rules since the 1950s. The rules change when the state’s financial situation does. It’s time for leaders to make meaningful, thoughtful adjustments before we’re faced with another emergency we’re not prepared for. Past decisions can’t keep defining our state’s future.
It’s not clear what’s going to happen tomorrow, but surprise executive orders and DOGE budget cuts loom over Connecticut’s future. Meanwhile, lawmakers are sitting on a $1.5 billion surplus it could be using to save crucial services like healthcare, rent assistance, help paying for utilities, and child care. Our leaders need to change the rules so that the state can respond to threats and hardworking families don’t end up paying the price.
A joint report by The Connecticut Project and Yale University’s Tobin Center for Economic Policy provides a deep analysis of the fiscal rules. Read the full report for data-driven options for Connecticut’s future.
