The legislature’s Finance, Revenue and Bonding Committee adopted omnibus measures Wednesday designed to eradicate concentrated poverty and bolster early childhood education, while also backing a five-year $674 million capital building program for the University of Connecticut.
But the child care plan — which relies on transferring surplus dollars and an off-budget fund — could be complicated by an announcement this week from top legislative leadership that lawmakers would not make formal adjustments to the preliminary $26 billion budget for the next fiscal year.
The Democratic-controlled finance committee voted largely along party lines to back a measure creating a new Office of Neighborhood Investment and Community Engagement in the Department of Economic and Community Development.
The office, working with local officials, would create 10-year plans to address “concentrated poverty,” defined as U.S. Census tracts in which at least 30% of residents have incomes below the Federal Poverty Level. According to the FPL, a family of four earning more than $31,200 per year in 2024 is above the poverty line.
Economic development officials would have to submit progress reports to the committee by June 1, 2025, with full plans to the legislature by Jan. 1, 2026. Those plans likely would include proposals for further state investment in these communities.
Municipalities would be asked to establish community development corporations to help carry out these plans.
“What we do to children in this state that live in concentrated poverty is criminal. What we accept and we tolerate is criminal,” said Sen. John Fonfara, D-Hartford, who spearheaded the measure and is one of the legislature’s most vocal advocates for increased state investment in Connecticut’s poorest urban centers. “We doom the children. We doom adults to a substandard life.”
Some of these census tracts have localized unemployment rates topping 30%, along with high crime and high taxes, Fonfara said, adding that “the vast majority of people who live in these communities are Black or Latino” and that society seems OK with that.
But most Republicans on the panel opposed the measure.
Rep. Holly Cheeseman of East Lyme, ranking GOP representative on the committee, questioned whether the bill requires tests sufficient enough to ensure that state investments are creating jobs and improving student achievement.
“How do you find the right people within DECD to administer this brand new” office? Cheeseman asked, adding, “I would love more specificity.”
But Democrats countered that legislators for too long have allowed the poorest communities to languish with a quality of life far below that of most other parts of the state.
Connecticut has long been recognized as one of the wealthiest states in the nation, but concentrated poverty weakens its overall ranking in areas like access to health care and educational achievement, noted Rep. Eleni Kavros DeGraw, D-Avon.
“Wouldn’t it be great if we weren’t just rich in dollars?” she said.
Sen. Marilyn Moore, a Democrat from Bridgeport — Connecticut’s largest city and one of its poorest — challenged skeptics to consider the financial boost the state would receive if more communities were capable of real economic growth.
“Look at the rate of return we could get on this by going deep” into the problem, she said.
The finance committee’s recommendations on state revenue and borrowing, along with those on spending expected Thursday from the Appropriations Committee, will form the basis for final negotiations on the next state budget between top legislative leaders and Gov. Ned Lamont.
Child care investments
The finance panel also wants to help spark economic development through a major new investment in child care and early childhood education.
The committee approved a bill that would direct $50 million in bonding and another $50 million from this fiscal year’s projected surplus to fuel the early childhood education fund created last year.
The measure also directs the state Office of Early Childhood to set up grant programs to help child care providers enhance wages, education and other services. It also would create a new program in New London County to share child care costs between participating families, employers and the state.
Rep. Kate Farrar, D-West Hartford, who led development of the investment bill, said after the meeting that the lack of child care and early childhood development services is a real threat to the economy.
“It’s urgent,” she said. “I hear from families about the crisis in my district, and I know that I’m not alone.”
Too many early childhood educators don’t earn enough to cover their bills, she said, adding the industry won’t rebound without “an innovative and bold move” by the state.
But the financing for this bill could be problematic, given the announcement from House Speaker Matt Ritter, D-Hartford, and Senate President Pro Tem Martin M. Looney, D-New Haven, that legislators would not formally adjust the $26 billion budget approved last June for the fiscal year that begins this July.
Any efforts to reduce or increase revenue would necessitate reopening the budget to include a new revenue schedule. But reopening the budget also would require legislators to plug holes in pension contributions and other technical items that need added funds — problems they would like to postpone until later next fiscal year so they can focus more resources now on higher education, social services and children’s mental health programs.
And since the child care bill would transfer surplus to an off-budget early childhood education fund, that revenue transfer could pose a problem.
But Rep. Maria Horn, D-Salisbury, the other co-chair of the Finance Committee, and Farrar both said they don’t believe that means the child care investment bill has no chance to win full legislative approval this year.
They noted that half of the proposed $100 million in funding would come from borrowing, which would not affect the next budget’s revenue schedule.
And there are other options that could be discussed to provide funding, even if lawmakers don’t formally adjust the next state budget.
“There’s a lot of conversations to be had” before the regular legislative session ends on May 8, Farrar added.
Panel backs new projects at UConn, review of pension investments
While legislators might not formally adjust the next budget, they are considering changes to the annual package of capital projects to be financed with bonding, borrowed dollars that normally support municipal school construction; upgrades to highways, bridges and other transportation infrastructure; repairs to state buildings; capital projects at state universities; and smaller community-based projects in legislators’ home districts.
The finance committee recommended $673.5 million over the next five fiscal years, including $126.5 million in 2024-25, for a new capital building program at University of Connecticut.
UConn President Radenka Maric outlined several pressing needs to legislators in late March. Most of the new investments would support science, technology, engineering and mathematics programs, including construction of a new science facility and renovations to the Gant Science complex.
Maric said Connecticut faces annual worker shortages of 6,000 in manufacturing and 7,000 in health care. In addition, about 5,000 new life sciences workers are needed over the next five years.
UConn officials also want to launch a $100 million renovation to Gampel Pavilion. The home to the university’s national championship men’s and women’s basketball teams was constructed in 1990.
“In the time since the historic and highly successful UConn 2000 program began, UConn’s academic enterprise and its campuses have been transformed into the envy of higher education institutions worldwide,” university officials wrote in a statement following Wednesday’s committee meeting. “The well-being of UConn is intertwined with that of Connecticut as a whole, and extending UConn 2000 will position us to continue to thrive together for generations to come.”
In other business Wednesday, the committee also approved a measure that would order an independent review of the performance of investments of the state’s pension funds.
The Yale School of Management Professor Jeffrey Sonnenfeld ranked Connecticut’s annual performance between 2017 and 2022 as second-worst in the nation. Sonnenfeld told the finance committee during a hearing last week that the state has made progress under new Treasurer Erick Russell, who took office in January 2023.
Pension investments made 12.8% gains last year, Russell announced, and Yale researchers testified that reflects “recent promising changes” made under the leadership of the new treasurer and the chairwoman of the state’s Investment Advisory Committee, Ellen Shuman.
But researchers said more improvement needs to be made, including: setting regular performance reports benchmarked against all other states; independent review and oversight by auditors reporting to the legislature; overhauling cumbersome existing reporting methods to improve the public’s understanding of investment performance; and establishing clear guidelines for replacing external investment managers employed by the state to help make fund investments.
The state has financed multiyear capital programs at its flagship university since the mid-1990s, when it first launched “UConn 2000.” Subsequent renewals of that popular capital program continue to bear the same name, decades later.
