Budget Negotiations to Tackle Topics Including Child Tax Credit, Higher Ed – NBC Connecticut

Pressure on lawmakers is coming from all sides when it comes to adding more funding on education.

When it comes to the budget, lawmakers on both sides of the aisle agree to extend fiscal guardrails when it comes to spending caps for five more years, which means that pretty tough decisions will be made in the coming weeks.

NBC Connecticut’s Mike Hydeck spoke with House Speaker Matt Ritter (D – Hartford) about it. He’s been representing the capitol city since 2010.

Mike Hydeck: So first – school budgets, are they or are they not facing a budget shortfall?

Matt Ritter: For the higher education system? We think they are, right. But I think we need to, we’ve gone back to them to get really hard data, we may want to do some fact-checking with them on some of the things that we’ve heard from the executive branch versus what they’ve had to say. But at the end of the day, I talked to the governor just today, I think we’re a couple hundred million dollars away from wrapping this budget up quickly. It doesn’t seem like a lot of money when we’re talking about a $50 billion biennium budget, but a lot of our stuff’s fixed costs, right, debt service salaries, things like that. So it’s a little harder than you think when you talk about discretionary funding. But I’m confident we’ll get there at the end of the day.

Mike Hydeck: Do you believe some of those fixed costs could be dealt with when it comes to the state’s view of them, as opposed to the colleges and universities?

Matt Ritter: I think we can talk about that. I know we’ve put some mandates on them, for example, on workforce training just alone, that seem a little redundant. I was talking to, you know, one of the staffers over there. So there’s things we can do to alleviate that pressure. But it’s not just higher education, right. We have nonprofits, I think that you’re correct when they say you’re privatizing more services, and you’re expecting us to do more with people with physical and intellectual disabilities, for example, our rates have to go up as inflation goes up. So for $200 million ballpark, you can really make a good investment in higher education, local education, nonprofits, long-term healthcare workers, para educators. I think that gets a lot of my caucus there on the budget. Then you go back and revisit the finance package after that.

Mike Hydeck: And the question eventually will be how. Also this week, the level of aid to cities and towns was a pressure point as well. In fact, Connecticut Conference of Municipalities Executive Director Joe DeLong, quoted in the mirror saying, “I think the governor may be a little tone deaf about what we need.” What’s your opinion on one, that comment but two, how do you try to help cities and towns?

Matt Ritter: I mean, the governor is not tone deaf. He got 57% of the vote in his reelection. I think he has a good pulse of the people in the state of Connecticut. I understand Joe’s comment. I understand Joe’s frustration. I represent Hartford. We’re always looking for ways to increase PILOT education funding. We are going to increase education funding. The question is how quickly we escalate the ten-year phase in which began in 2017. Is it over two years or three years? We’ll have those conversations. Again, as you mentioned, we have to live within a spending cap. We want to do things that are, but we don’t want to pass an austere budget. I think that sends the wrong message. So how do you reduce taxes, fund the things you care about? Live within guardrails? Don’t set yourself up for failure two years from now because you baked in money you’re not going to have. But I think we can accomplish that. But I also think Republicans will play a big role here. My good friend, Representative Candelora in the House, he has an option. He could sit back and say it’s your problem. You figure it out. Right. To his credit, he’s gonna put a budget forward. That lets us see our commonalities, which is probably gonna be 85 to 90%. And then hash out the differences. I remind people we passed a bipartisan budget and 2021 I think we could do it again in 2023.

Mike Hydeck: That would be nice. And it might be historic if it could actually happen twice within a 10 year period. Within a three year period. Let’s also talk about, so we’ve gotten a lot of money. You said baked in. So $2.5 million in ARP money over the last two years. There’s been stories of, a lot of this isn’t spent. Is it spent? Can that be used? Does that offset the larger budget picture?

Matt Ritter: We do have ARPA funds available, right. The federal funds that came in, the COVID funds, were the COVID relief funds, right. Some have been deemed ineligible. A lot of the money we gave to pay smaller nonprofits, they’ve had a hard time complying with the paperwork. So yeah, there will be funding there. There’ll be surplus funds from last year, we can carry forward. So there are probably three or four pots of money. And then you have to sit down with the agencies and the Office of Fiscal Analysis and figure out which ones, some fall under the cap, others do not. You know, my staff actually met with an individual who did his dissertation on the Connecticut spending cap. So some of that stuff is actually getting lawyers in a room to think about, okay, what needs to be under, what is out? The federal funding, for example, is a good example of sometimes it’s a little trickier than it sounds. But yes, there will be funds available for that.

Mike Hydeck: Because then the infrastructure funding as well. So that can go to cities and towns, you’re not paying out of your own taxpayers’ money to pave your roads. That’s federal money. So that should offset a budget item as well?

Matt Ritter: Yeah. And I do think that, you know, we’ve done really well by cities and towns over the last couple of years. I know Hartford alone beyond the 2017, where we took over all the city’s debt, which was over $400 million, PILOT increased $25 million alone in the last plan, and we’ve done very well by our cities. And I’m proud of that.

Mike Hydeck: And obviously, you should be. So state tax credit proposals when it comes to the Child Tax Credit, some asked for $200 a child, I think you mentioned $600 a child. Republicans say let’s just put $1,000 on the table. Where’s that right now?

Matt Ritter: Yeah, right now, there was not a child tax credit in the budget, or the recommendations that came out of the Finance Revenue and Bonding committee. They did increase the earned income tax credit to its highest level in state history, which would benefit a lot of families who have children. We also cut income taxes. And the thought being that there’s broad base applicability when you just cut the income tax and you base it on an income level. So I bet when you run the numbers between the earned income tax credit increase in the income tax reduction, the same family that got a check last year for $200 a kid is probably making out even better. And so we’re going to look at it. But I can tell you if we find additional revenue, we get our revenue estimates this week. The child tax credit is one of the things still under consideration.

Mike Hydeck: Will the income tax rates be solidified as far as the percentages at each level as well this week, do you think?

Matt Ritter: I hope so, we might need a week or two to do that. Because I think appropriations, you have to figure out what you got to spend, what you can afford. I know the governor’s priority is to restore as much as possible of what he originally proposed. And I think we’re okay doing that. I do.

Mike Hydeck: I got a little less than a minute, this a little bit of a complex question. So I know revenue intercepts can go around the budget rails. Is that a possibility?

Matt Ritter: The income tax? No, that would violate the guardrails. Capital gains? No. Violates the guardrails. Sales tax and other revenues? You can intercept that without violating the guardrails. It may violate the spirit, but on a one-time basis when you’re giving back sales tax revenue that is caused by inflation. That’s why we have so much sales tax revenue. I can make the intellectual argument that you can do that and not weaken future budgets if it’s a one-time thing.

Mike Hydeck: You have other lawmakers who back that proposal. Have you gotten pushback yet?

Matt Ritter: I get pushback every day of my life. My job is to figure out how strong the pushback is and try to build consensus.