Some politicians want to break Connecticut’s fiscal guardrails to survive “catastrophic” federal funding cuts. But here’s the truth: no one knows when or whether federal cuts will happen — or how big they’ll be. It’s all just a scare tactic to justify a return to the tax-and-spend governance that resulted in big tax increases in 2011, 2015 and 2017 — and to bust the bipartisan guardrails that have brought stability and growth to our state.
In fact, Connecticut isn’t as dependent on federal aid as some lawmakers want you to believe. Our state ranks 40th in dependence on federal money overall, including 45th for state government dependence and 17th for resident dependence. Connecticut is actually one of the most self-reliant states in the nation!
Connecticut can handle any potential reductions, continue paying down our $80 billion pension debt, and strengthen our economy — without breaking what works.
Here’s how we do it:
Avoid New Permanent Spending Programs
It’s just common sense. If families anticipate a lower annual income, they don’t buy a second home and take out another mortgage to pay for it. Government should adopt the same mindset. Even as lawmakers complain that the state will lack funding for existing programs due to fewer federal dollars — and propose tax increases as a result — they’re also proposing to create new permanent programs like universal pre-K. For FY 25 and 26, universal pre-K is estimated to cost more than $600 million. This will lock taxpayers into paying future costs, thus limiting flexibility and increasing deficits.
Reduce Spending on Existing Programs
Connecticut spends $1.3 billion on services for an estimated 167,000 illegal migrants — 225,000 if children are included — who receive services including medical care, in-state tuition, incarceration, legal services, shelter, and welfare. Reducing or reallocating these funds could ease budget strains.
Additionally, the state should eliminate any program created using American Rescue Plan Act (ARPA) funds. These were temporary dollars received for pandemic relief, which were never intended to be used to pay for permanent needs.
Freeze State Employee Wages
State employees have received a 33% pay increase through step and annual raises over the past six years. If wages are frozen, Connecticut could save $360 million over the next two years. Moreover, state employees pay only 2% of their medical bills, while the national average is 14%. This should also be reconsidered.
Avoid ‘Resistance’ Theater
Connecticut is refusing to abide by the Trump administration’s interpretation of federal civil rights laws, which has required the elimination of diversity, equity, and inclusion (DEI) programs on the grounds that discriminate based on race. The state is also pursuing numerous lawsuits against the federal government. It is important to recognize that pursuing politically driven initiatives that invite legal or federal conflicts could result in costly litigation or loss of significant federal funds.
Re-Examine Film Tax Credit
The state should also eliminate its film tax credit, a policy on which the left-leaning CT Voices for Children and Yankee Institute agree. In Fiscal Year 2023, Connecticut gave $112 million in tax credits.
These commonsense measures allow Connecticut to maintain the fiscal progress it’s already achieved, reduce debt, and improve its economic outlook without dismantling the guardrails that will secure a prosperous future for our state’s families and businesses.
