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February 12, 2024

5 takeaways from Lamont’s $26.1 billion CT budget proposal

SHAHRZAD RASEKH / CT MIRROR Gov. Ned Lamont delivers the 2024 State of the State Address at the State Capitol on February 7, 2024.

For Gov. Ned Lamont, describing the state’s finances is pretty simple: it’s on a steady path. For progressive advocates, it’s not as simple: areas like social services and higher education have eroded, they say, even as the state’s coffers have accumulated nearly $11 billion in surpluses since 2017.

Lamont’s latest proposal adds $89 million to the preliminary, $26 billion budget legislators approved last June for the 2024-25 fiscal year. The legislature passes a two-year budget in odd-numbered years, then considers adjustments to the second half of the biennial plan in even-numbered years.

Here are five key takeaways from the start of this year’s legislative session and the governor’s proposed budget.

Lamont remains committed to fiscal guardrails

Lamont stayed within Connecticut’s statutory limits on spending and borrowing — commonly known as fiscal guardrails — Wednesday, recommending a $26.1 billion budget that erases $500 million in bonded debt and invests in child care and education while largely holding the line in most other places.

The governor’s proposal would boost spending by 3.1% over the current level, and is designed to close in mid-2025 more than $740 million in the black.

Lamont, legislature on collision course over education funding

Under Lamont’s budget revisions, the governor committed an increase in funding for the Board of Regents for Higher Education, which oversees community colleges, four regional state universities, and the online Charter Oak State College. The system would see its base funding grow from $423 million this fiscal year to $440 million in 2024-25. 

But, Connecticut has been propping up higher education with hundreds of millions of dollars from temporary sources, state surpluses and federal funds, since the coronavirus pandemic began in 2020. Those subsidies are being reduced, meaning that the state’s overall funding to the regents’ system will decrease from $647.5 million this year to $516 million next year. Similarly, the University of Connecticut will see its state funding decrease from $299 million this year to $251 million next year.

Lamont is also proposing to scale back a previously approved increase for K-12 schools from $150 million to $111 million. The governor wants to redirect some of that $39 million from magnet, charter, and vocational schools to child care programs.

Education Committee co-chair Rep. Jeff Currey, D-East Hartford, criticized Lamont and his staff after his State of the State Address for abrogating a deal he struck with the legislature last year to dedicate the full $150 million for K-12 education. The administration counters that most of the funding it wants to reassign never would have been spent in the classroom under the original plan. Rather it would have been used to ease tuition burdens placed on the towns that send students to these specialized schools.

Lamont highlights hospital oversight, pauses some Medicaid rate raises

In his budget revisions, Lamont proposed adding four new positions to the state’s Office of Health Strategy, which oversees hospitals in the state, and these new positions will help the office speed up its internal processes. In recent months, OHS has come under fire for taking more than a year to approve Yale New Haven Health’s acquisition of three financially beleaguered hospitals owned by Prospect Medical Holdings.

Medicaid reimbursements were a major issue last legislative session, with leaders directing the Department of Social Services to conduct a two-step review of rates paid to providers who treat patients covered by Medicaid. The first stage of the report is due out in the coming weeks and the second in early 2025.

Lamont’s proposal maintains the $7 million he and the legislature set aside last year to bolster rates identified in the first phase of the report, which assesses fees for physician specialists, dentists and behavioral health providers. He proposed halting raises already approved for ambulance and methadone maintenance providers, saying this should hold until the second phase of the report, which addresses these groups and all other providers not covered in the first phase.

Hospitals and community health centers in Connecticut say the current rate prevents them from serving as many people on Medicaid as they would hope. CHCs are underpaid by $65 million for medical services provided to patients with Medicaid coverage, said Jennifer Granger, president and CEO of United Community and Family Services in Norwich. 

The governor’s proposed budget also would decrease the eligibility threshold for the state’s Medicaid HUSKY A program from 160% of the federal poverty level, or FPL, to 138%. This only would affect adults, excluding pregnant women. Connecticut is the only state providing Medicaid coverage to parents and relative caregivers with incomes over 138% of the FPL. 

Jeffrey Beckham, secretary of the state’s Office of Policy and Management, said people who no longer qualify for Medicaid would still be eligible for a zero-premium, no-cost-share coverage plan under Covered CT.

Lamont’s budget plan falls short of social service providers’ requests 

Homeless service providers have asked for a $20 million funding bump to deal with Connecticut’s historic housing crisis currently. Lamont’s proposal adds $4.1 million. 

The hundreds of community-based nonprofits that deliver the bulk of state-sponsored social services for clients with disabilities and patients dealing with mental illness or substance abuse issues did not get the $186 million increase they requested in the governor’s budget. The CT Community Nonprofit Alliance estimates that the industry loses about $480 million annually because state payments haven’t fully kept pace with inflation since 2007.

Lamont did propose an additional $43.3 million for child care, as well as $12 million for Care4Kids, a state-funded program that helps low-income families pay for child care. He also proposed increasing income eligibility limits from 60% to 65% of the state’s median income. The budget revision also includes adding $8.8 million to bolster the state’s mental health care system for kids. 

Lamont proposes his first comprehensive bill on elder care

The Connecticut Mirror has extensively reported on gaps in the state’s elder care system — both in nursing homes and home care. Serious violations known as immediate jeopardy orders were on the rise in 2023 and a major nursing home chain faced a number of lawsuits.

One of the bills raised to implement the governor’s budget proposals includes a wide set of reforms. The bill would:

  • Propose a website where people can compare nursing homes’ quality ratings, track complaints and find information about recent safety violations and staffing levels, which will be supported by $500,000 in American Rescue Plan Act funding.
  • Enact a ban on three- and four-person nursing home rooms to help curb the spread of infection and promote privacy.
  • Create a set of standards that would allow some nursing homes to be designated as “Centers for Excellence”; the evaluation program would be voluntary and is meant to incentivize higher quality care, using $250,000 from federal pandemic relief grant funding.
  • Include a requirement that facilities report how frequently they increase fees.
  • Allow the public health department to deny a nursing home management certificate (or decline to renew one).
  • Give the health department power to impose disciplinary action on nursing home management companies, including revocation of a certificate or imposition of civil penalties, and to enforce plans of correction against these companies.
  • Require management companies to get state approval before taking on new facilities beyond those identified at licensure or renewal.
  • Permit forensic audits of nursing home finances under certain circumstances.

Compiled by Yash Roy.

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