Connecticut OKs $20.5 billion budget, closes deficit

Reuters News
Posted: May 10, 2012 4:54 PM
Connecticut OKs $20.5 billion budget, closes deficit

(Reuters) - The Connecticut legislature has approved a $20.5 billion budget for the next fiscal year, which closes a $200 million deficit and adds $100 million in spending on education without increasing taxes, officials said on Wednesday.

The budget, enacted late on Tuesday by lawmakers, includes savings of around $75 million focused on Medicaid, the federal-state health plan for the poor, raising the bar for low-income adults to qualify.

Ben Barnes, the Secretary of the Office of Policy and Management, said the deficit, which was in the current budget that ends on June 30, was closed by tapping $222 million that had been set aside to repay outstanding notes.

"This budget invests millions in public education, funds youth employment programs to help train the next generation and identifies tens of millions in new savings," Andrew Doba, a spokesman for Governor Dannel Malloy, said by email.

The total spending on Medicaid will be nearly flat at about $4.5 billion, with $60 million of savings coming from closing a loophole by setting a limit on wealth. "Unfortunately, folks with significant assets were able to get into the program," Barnes said.

Another $15 million of savings in Medicaid will be reaped by allowing home health care aides to do more medical care under the supervision of nurses, he said.

The budget allocates about $2.4 billion for education, he said.

Fares for commuters on the MetroNorth railroad will rise about 4 percent starting on January 1 to cover increased operating expenses, Barnes said.

Connecticut enacts two-year budgets, and the total budget for the next two fiscal years is $40.11 billion, up slightly from the current $40 billion accord.

Yearly contribution to the public pension fund will be $100 million higher, raising the total to more than $1 billion, which will help reduce the amount due in future years.

(Reporting by Joan Gralla; Editing by Leslie Adler and Leslie Gevirtz)