Connecticut’s newly enacted budget for fiscal year 2016 includes a comprehensive reform to the state’s Budget Reserve Fund, designed to help the state better manage its volatile revenues and expand its options for dealing with future budget pressures arising from economic downturns.
Introduced in April 2015 as a stand-alone bill (S.B. 1135), the reform passed the Joint Finance, Revenue, and Bonding Committee unanimously under the leadership of co-chairs Sen. John Fonfara (D) and Rep. Jeffrey Berger (D), and members Sen. Scott Frantz (R) and Rep. Christopher Davis (R). It was then added to H.B. 7061, the budget bill that the General Assembly passed on June 3 and Gov. Dannel Malloy signed into law on June 30, 2015.
Connecticut’s rainy day fund reform:
Pew research shows that Connecticut has the 13th highest revenue volatility in the nation. Other states with highly volatile revenue can heed Connecticut’s well-designed approach to long-term fiscal management. As Comptroller Kevin Lembo said in a press release, “This legislation will put the State of Connecticut in a better position leading into any future economic downturn, reducing the need for future tax increases and requiring fewer crisis-driven budget cuts.”