By Elizabeth Barhydt
Just before the stroke of midnight on Tuesday, June 3, the Connecticut General Assembly gave final approval to a $55.8 billion two-year budget, sending it to Governor Ned Lamont, who is expected to sign it.
The final vote—99-49 in the House came down largely along party lines, with two Democrats voting against. In the Senate the 25-11 vote was exactly along party lines.
Behind those numbers lies a deeper shift: a bipartisan experiment in fiscal discipline that began in 2017 has been partially undone.
The budget required 22 votes or more to pass in the 36-member Senate because state budget control changes must be approved in both chambers by at least a three-fifths margin.
For legislative Democrats, the budget is being hailed as a compassionate investment. It boosts Medicaid reimbursement rates, increases the property tax credit, and devotes $60 million over two years to special education. It also includes a $250 expansion of the Earned Income Tax Credit for low-income working families—though not the broader child tax credit favored by progressives.
Senate President Pro Tempore Martin Looney called it a “transformational budget,” and Governor Lamont emphasized that it “holds the line on taxes” for the middle class.
Legislative Republicans disagree. They say the budget sidesteps the fiscal guardrails that helped rebuild the state’s credit and stabilize its reserves over the past eight years. “This year they are being broken and taxes, spending, and debt are set to go up,” said Fazio.
The spending cap, instituted during the 2017 bipartisan budget reforms, was exceeded by more than $450 million. Additionally, lawmakers created a $300 million “off-budget” education fund, and revised the volatility cap to divert $1.8 billion from debt payments into general spending—moves Republicans say are breaking the guardrails and sending Connecticut back to its old ways that led to the brink of bankruptcy and a credit rating reduction.
“The volatility cap alone has paid down $8 billion of our roughly $90 billion in unfunded liabilities and avoided over $700 million in higher taxes annually,” Fazio noted. “What the government spends and borrows, it must raise taxes to fund sooner or later.”
Former State Senator L. Scott Frantz, who co-led the bipartisan fiscal reform effort in 2017, has been watching with concern. “We were on the verge of bankruptcy,” Frantz told the Sentinel in an interview last year. “The forecasts were horrific. It was clear that if we didn’t change course, the situation was going to implode.”
Frantz pointed to the long-term consequences of years of unchecked spending and over-reliance on volatile income tax revenue. “We had windfall revenue from capital gains and other taxes during good years,” he said, “but instead of saving for a rainy day, they spent it all.”
The result was a downgrade in Connecticut’s credit rating, outmigration of major employers, and a crisis of public confidence. “It was insane,” Frantz said of the pre-guardrail era. “The pensions were a ticking time bomb, and no one wanted to make the tough decisions to rein in spending.”
Since 2017, those tough decisions had paid off. The state built a record-setting rainy day fund, paid billions toward pension obligations, and—until this week—maintained the fiscal guardrails.
Democratic leaders say the investments are necessary. Republican leaders say the consequences are inevitable.
