May 2019

Impact of the FY 2020-2021 Appropriations and Finance Committee Budget and Revenue Proposals on Children and Families

Jamie Mills, J.D., Lauren Ruth, Ph.D., Karen Siegel, M.P.H., Wendy Waithe Simmons, Ph.D., Camara Stokes Hudson, Jessica Nelson, and Sharon Langer, J.D.

While the state budget proposals by the General Assembly protect many programs that serve children and families from budget cuts, rigid and counterproductive budget rules are starving schools, infrastructure, and health systems of the revenue to support critical  investments. Even though the state faces a large budget deficit for the next two fiscal years, the state’s volatility cap and revenue cap are depriving the state of revenues it needs.

Over the next two years, the volatility cap is projected to sweep $630 million from the General Fund into the state’s rainy day fund (the Budget Reserve Fund). The revenue cap will also deplete the General Fund of an additional $22 million. Finally, the spending cap is preventing the state from making needed investments in early childhood education, health care access, and infrastructure. Even with the funds available to make these investments, rules adopted by past legislatures prohibit the current legislature from doing so.

The Appropriations Committee restores funds for juvenile justice services that had been previously cut. The budget plan also includes new dollars for start-up costs for a public option to expand health insurance coverage, and a paid Family and Medical Leave program.

The Finance Committee’s proposal raises new progressive revenue through a surcharge on capital gains for high-income residents and through closing corporate tax loopholes. Both proposals raise significant revenue without further exacerbating growing income inequality. However, the Committee’s plan falls $340 million short of the revenues proposed by Governor Lamont for the next two years.

The report recommends that state legislators and the Governor repeal the state’s Bond Lock, revise the volatility cap, and implement additional tax reforms that begin to correct the state’s regressive revenue system by asking more of the state’s wealthiest residents.

Issue Areas:
Budget and Tax, Child Welfare, Early Care, Education, Health, Juvenile Justice