State budget process not always easy to grasp
My parents, born and raised in Bridgeport, always sang the praises of the city. But having spent most of my adult life working at the Capitol, I can attest that Hartford does not really consider Fairfield County part of Connecticut. “It’s a New York suburb!” is often heard, despite it containing Bridgeport as the largest and among the poorest cities in Connecticut. This has manifested itself in Bridgeport getting short shrift from the Capitol.
It is important that people downstate understand how the state budget process works in Hartford. It is hard to participate and get a fair shake if the process is unknown.
Prior to 1969, Connecticut’s legislature met only in odd numbered years with two-year budgets. When it decided to meet annually in 1970, annual budgeting came along with it. Connecticut reinstituted a biennial budget in 1991 along with the income tax. Although this requirement is observed, the state still functions effectively as though it has annual budgets.
Last Feb. 9, the governor released his 2023 budget adjustment document and related bills. This always coincides with the State of the State address. Adjustments to the biennial budget are not necessary since a budget for the second year already has been put in place, but they nearly always occur. Although much fanfare occurs around the release of the governor’s budget, it is actually dead on arrival and is really a handoff to the legislature.
The legislature allocates the wide range of proposals before it to 26 committees. The informational budget document that accompanies the governor’s proposal is not actually “the budget.” Budget and tax proposals are bills, like every other piece of legislation. The legislature’s only work consists of passing bills (and a few resolutions). You can see that the Final Budget (HB 5506) that was passed in April is not structurally complicated. A usual budget bill consists of: (1) a list of state agencies/accounts and appropriated dollar amounts, followed by (2) multitudinous written sections known as the “back of the budget” that contain directives related to the budget but also piles of unrelated political policies and pork.
When referring to “the budget,” most people are referring to the general fund ($22.1 billion) which makes up more than 90 percent of appropriations. But there are also eight other appropriated funds ($2.1 billion) of which the transportation fund (8 percent) is the largest. The current number of appropriated funds is fungible and is just what has evolved over the years.
The budget is the most important action that a legislature takes since it contains not only operational funding but a load of policy. Unlike most other bills, a budget must be passed. It not only provides continued funding for agency programs but also creates new/expanded programs that gratify a constituent, policy advocate, party member or lobbyist.
The document produced by the governor helps explain changes to the budget but not the base budget itself. This document along with its Economic Report and Three Year Out Year Report is voluminous. No one reads these documents fully — there is too much information and not enough time.
A confusing part is that the subject matters of the committees are different than the 11 government functions utilized by the governor, which is also different than the 13 subcommittees utilized by the Appropriations Committee. These subcommittees oversee a different set of agencies and are staffed by nonpartisan analysts. Many of these functions/processes overlap and are not distinct to one committee which requires elected officials and staff to routinely work together across committees and assignments.
But there are significant other major state spending sources. The first is the Capital Budget (the “Bond Bill,” about $3.2 billion recommended by the governor for 2023). Bonding, like taxation, is under the purview of the Finance Committee since it is made up of projects funded by borrowed money. It does not go through a process like Appropriations has — it is handled primarily by the committee chairs. A list of these projects can be seen starting on page D-1 of the governor’s 2023 document.
Other parts of spending do not get reviewed at all such as funds that are non-appropriated (about $10 billion). These are managed by state agencies with little review by the legislature. The largest portion are federal funds (about $7 billion not including pandemic funds). Some of these are federal block grants which get cursory review before Appropriations. The majority of the rest of the funds are legislated “revolving” funds that take in money from fees or charges to use for program spending by agencies. Although authorized by law at birth, these programs are on auto-pilot afterward.
Finally, there are tax expenditures, which total about $9 billion per year. These also have been legislated and are on auto-pilot. Tax expenditures are not actually “expenditures.” Instead, they result in a loss of (or foregone) tax revenue such as tax breaks/credits. These items get no review at all.
There are far too many programs/funding that do not get enough review but Hartford is happy with the current system. If they weren’t they would change it.
It is important that people downstate understand how the state budget process works in Hartford. It is hard to participate and get a fair shake if the process is unknown.