Budget is “balanced” by borrowing more and deferring payments due
CT Voices for Children has issued a new report that outlines some of the proposals affecting children contained within Governor Malloy’s proposed budget, as well as their likely impacts – highlighting proposed changes in state and local revenues, the capital budget, health, family economic security, child welfare, juvenile justice, early care and education, and K-12 education.
In his budget proposal, Governor Malloy expands Connecticut’s commitment to high-quality preschool and K-12 education, both vital to our future. However, to fund these commitments, the Governor has relied on Medicaid cuts that could cause thousands of parents to lose health coverage, one-shot revenues that will leave holes in future budgets, and substantial borrowing that will burden our children tomorrow. Rather than continue making such tradeoffs on our children’s future, this analysis recommends taking a more balanced approach to the budget deficit that includes revenues and better ensures a prosperous and secure future for our children.
Highlights discussed in the report include:
· The Governor’s budget proposes little in the way of new tax revenue. Rather than tax increases, the largest revenue items in the proposed budget are one-time revenues and transfers among funds and between the state and municipalities
· On balance, the proposal maintains flat funding of municipal aid to cities and towns, but significantly reconfigures municipal aid and substantially shifts the both the makeup and sources of grant aid to towns.
· The plan includes borrowing $750 million to reduce the state’s deficit, as well as delaying payment of existing debt obligations.
· Coverage would be eliminated for thousands of parents enrolled in HUSKY as of January 1, 2014, with the expectation that they will instead purchase coverage through a new health insurance exchange.
· A temporary reduction in the state earned-income tax credit (EITC) would reduce the credit from 30 to 25 percent of a filer’s federal EITC and affect some 180,000 households in Connecticut.
· The budget reduces funding to the Department of Children and Families compared to the level of funding it would require to maintain current service levels, in part reflecting DCF’s efforts both to reduce its reliance on serving youth in expensive congregate care settings and to increase the number of youth who are served in their homes and communities.
· Overall, the budget maintains funding for juvenile services through the Court Support Services Division of the Judicial Department and the Department of Children and Families.
· The Governor’s proposed biennial budget for FY 2014-15 preserves funding for the majority of early care and education-related programs, and includes an important consolidation and reorganization of early childhood program into a new Office of Early Childhood.
· The Governor’s budget recommends increased grants for education in several areas, while funding in others areas would be cut or remain flat. The largest grant, the $2.01 billion Education Cost Sharing (ECS) grant, would increase by about $152 million over two years.