For 900,000 seniors and low-income patients, it’s crisis averted.
HUSKY Medicaid checks will go out to clinics this week, as scheduled, after Gov. Ned Lamont declared a fiscal emergency to cover a $300 million budget deficit.
But the deal pushes Connecticut over the state’s constitutional spending cap for the first time in nearly two decades.
Republicans slammed it as a budget gimmick that will lead to more spending – and higher taxes.
"EXTRAORDINARY CIRCUMSTANCES"
Without a deal, checks would be
delayed until July. Some providers even warned that they couldn’t pay their workers.
Like many states, Connecticut’s Medicaid program is in the red due to higher demand.
“Medicaid has gone up a lot. It has happened in 49 other states,” Lamont told reporters. “We’ve got to get the Medicaid checks out.”
To plug the hole, the governor declared "extraordinary circumstances" on Monday. The move lets lawmakers break the cap by a modest $25 million – roughly 0.1% of the entire state budget.
The state can also carry forward surplus money into the next state budget, which begins on July 1. That extra money typically goes to pay down Connecticut's massive pension debt. Instead, it will go to local town aid and special education, which keeps property taxes down, Democratic leaders said.
“When you prepay your Medicaid deficiency in cash, like we’re going to do, that will free up operating surplus from Fiscal Year '25 that you can carry forward to Fiscal Year ‘26 and spend,” said Connecticut House Speaker Matt Ritter (D-Hartford).
SLIPPERY SLOPE TO HIGHER TAXES?
If this all sounds complicated, Republicans think so, too.
“Republicans understand that one plus one equals two,” said state Sen. Heather Somers (R-Groton). “The Democrats in the state of Connecticut think one plus one equals $300 million for them to spend on whatever they want to spend.”
The cap ties state spending to the growth of inflation and personal income. Lawmakers have not exceeded it since 2007 under Gov. Jodi Rell – a Republican.
“When we blew through the spending cap 18 years ago, you know what we had? The largest tax increase in Connecticut’s state history,” said state Rep. Joe Polletta (R-Watertown). “We have not learned from the sins of the past.”
Earlier this year, Lamont called the state’s spending limits “sacrosanct.”
“It's really disappointing that we have a governor who has literally folded like a lawn chair over this,” said state Sen. Heather Somers (R-Groton).
But the governor insisted this is a “one-time” fix.
“Look, everybody calm down,” he said. “I’m pretty strong about, we’re not going to raise taxes. I’m going to hold the line on our spending cap, and that's what we're doing in [Fiscal Years] ‘26 and ‘27 and beyond.”
Going past the cap requires a three-fifths majority vote. Lawmakers approved the deficiency package on Monday afternoon, sending it to Lamont's desk.
AVOIDABLE CRISIS?
Republicans argued that the Medicaid crisis could be solved with cuts and by shifting money from other programs.
“We are now in crisis,” said House GOP leader Vin Candelora (R-North Branford). “Not because of President Trump, not because of the federal government, but because of the inactions of the governor and Democrat majority over the past year."
Republicans warned about a looming crisis last year when majority Democrats opted not to adjust spending, despite significant Medicaid cost overruns.
“We wouldn’t have had to do anything if we had actually done our jobs last year and adjusted the budget,” said state Rep. Tammy Nuccio (R-Tolland), the top Republican on the Legislature’s budget-writing committee.
As for the rest of the new two-year state budget, Ritter said he expects a vote on the $55.5 billion plan by late next week.
But lawmakers might be back this fall to make adjustments, since Congress is threatening massive
cuts to Medicaid and other federal programs.
To plan for those losses, the new budget will likely expand Connecticut’s “Rainy Day Fund” by about $1 billion, according to both Lamont and Ritter.
The General Assembly session ends on June 4.