GOVERNOR LAMONT’S FY 2025 PROPOSED BUDGET ADJUSTMENTS

February 9, 2024

At his Opening Day Address to the Connecticut General Assembly, Governor Lamont recommended a $26.1 billion budget for Fiscal Year 2025 that stayed within the fiscal limits imposed by the budget controls enacted in 2017 and extended in 2023. The Governor’s FY25 proposed budget adjustments do not include any new significant resources for housing.

INADEQUATE FUNDING FOR RENTAL ASSISTANCE
“We are disappointed the Governor’s proposed budget adjustments do not include increased funding for the Rental Assistance Program (RAP) – the state’s housing voucher program. Rents have risen more than 20 percent in the last three years alone, but RAP has not seen any significant funding increase in at least a decade,” said Chelsea Ross, Executive Director of Partnership for Strong Communities.

Thousands of families who are eligible for a rental assistance voucher do not have one. They continue to struggle to pay increasing rents – often forced to live in overcrowded or unhealthy conditions, or face eviction. RAP alleviates housing insecurity and prevents the experience of homelessness. The program is expected to run a deficit in FY25. Without additional funding, fewer families will have access to affordable homes at a time when we should be expanding our support to them.

BONDING PRESERVED
The Governor began his address focused on housing, indicating just how critical expanding our housing supply is. The Governor’s proposed adjustments maintain the bonding resources ($430M) authorized in last year’s biennial budget. “State bonding programs are critical to preserving and creating new affordable homes for low- and moderate-income households,” Ross said.

The Governor reiterated his belief that housing decisions, including location and density, should be made locally. In the absence of significant land use regulatory reforms, it remains incumbent upon the state to create more affordable homes. While there is a need for housing that is affordable at all income levels; the state must prioritize its limited funding for the creation of homes affordable to Connecticut families with the lowest incomes and greatest vulnerability.

“The deepest need for housing in our state is among renter households making less than 30% of median income – or about $39,995 for a family of four. Connecticut Housing Finance Authority’s 2023 Housing Needs Assessment estimates a gap of approximately 92,560 homes affordable to these extremely low income renter households,” Ross said.


BUDGET SUMMARY
A summary of housing-related budget adjustments proposed by Governor Lamont is below. Relevant budget document page references are included in parentheses.

PROPOSED CAPITAL BUDGET
The $430M in bonding for housing authorized in the existing FY25 budget remains in the Governor’s proposed budget adjustments. (p 33, D-5) Authorizations in the existing budget include:

  • Bond authorization for Affordable Housing Program (FLEX) at $100M, including $60M set aside to revitalize moderate-income housing units within the Connecticut Housing Finance Authority’s (CHFA) State Housing Portfolio. FLEX may be used for housing affordable to residents with incomes up to 100% of the area median income.
  • Bond authorization for the Housing Trust Fund (HTF) at $200M, with no more than $200M of the total allocation going towards the CHFA-administered Build for CT program for workforce housing projects. HTF may be used for housing affordable to residents with incomes up to 120% of the area median income.
  • Bond authorization for the Time-to-Own down payment assistance program.
  • Bond authorization for $5M for grants or forgivable loans to Time-To-Own recipients for unanticipated capital improvements to their newly purchased homes.
  • Bond authorization for $25M for the Housing Receivership Fund for the rehabilitation of existing housing that has been put under court ordered receivership.

PROPOSED APPROPRIATIONS BUDGET

Department of Housing (DOH)

  • Increase in the Housing/Homeless Services (HHS) line item of $905K for FY25 from $87,882,789 to $88,787,888. Spending in that line item in FY23 was overbudget at $91,469,052. Spending for FY24 is estimated to be overbudget at $93,007,888. (A-27)
    • $500K of the $905K increase in HHS line will support the increased cost of homeless services contracts due to recent DOH request for proposals that resulted in increased bed/case management costs (B-44)
  • $145,852 for two new positions for DOH’s Asset Management and Planning Units (one position to monitor state portfolio of affordable housing planning and one to support long term and short-term planning and reporting of obligations) (B-44)
  • $613,356 reallocated to annualize FY24 private provider Cost of Living Adjustment (B-44)
  • $80.5K increase for Homeless
  • $72K increase for congregate facilities operation costs
  • $38K increase for Project Longevity-Housing initiative to reduce gun violence in the Bridgeport, Hartford, and New Haven
  • $17K increase for housing/homeless services to municipalities

Department of Mental Health and Addiction Services (DMHAS)

  • $2.9M to DMHAS for wrap around services (p. 17), including:
    • $1.3M for chronic homelessness/additional supportive housing – wrap around services to match with existing 140 Section 8 vouchers designed to create additional supportive housing units (B-54)
    • $1.2M for 12 positions for state operated homeless outreach (B-54)
    • $400K for SSI/SSDI outreach (B-54)

American Rescue Plan (ARPA) Allocations

  • $2M to the Judicial Department for the Connecticut Right to Counsel program which provides no cost legal representation to income-eligible tenants and occupants at risk of eviction or subsidy termination. (p. 26)
  • $1.5M to DOH to develop a single point of access application for federal, state, and local affordable housing choice vouchers statewide. (p. 27, A-52)

GOVERNOR’S LEGISLATIVE PROPOSALS 
H.B. 5056 – An Act Facilitating the Expansion Of Shared Municipal Services will eliminate outdated statutory barriers and enables regional council of governments to make joint appointments/commissions in lieu of required municipal commissions, including: Fair Rent Commission, Fair Housing Commission, Land Bank Authority, Zoning Enforcement Office, Plan of Conservation and Development, Affordable Housing Plans, Inland Wetlands Agency, and Building Official. 

S.B. 16 – An Act Concerning Revenue Items To Implement The Governor’s Budget, Section 15, would establish that the Workforce Housing Tax Credit is equal to 50% of the cash contribution to an eligible developer of workforce housing. Under current law, the tax credit value is not specified in statute, but is left to the Commissioner of Housing. There is no fiscal impact with this proposal as there is an issuance cap of $5 million per fiscal year that is already assumed in the budget projections. 

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