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October 15, 2017; San Francisco Chronicle (Associated Press) and the Connecticut Mirror.

Although not in the national news as much as some states, Connecticut faces many challenges. These include the fact that the state has the nation’s largest income gap and the nation’s largest achievement gap. Yet another complication is a 2016 state Supreme Court ruling that found the state’s education funding system to be unconstitutional.

Most states run on a July–June fiscal year. Passing budgets late is not unusual. For example, as of this past July 2nd, 11 states had not passed budgets. But today, Connecticut is the only state that has not enacted a budget. As such, it operates under the authority of a gubernatorial executive order, updated on August 18th to restore $40 million to services and programs provided by nonprofit organizations.

The state missed a key deadline on October 1st, when the executive order zeroed out education funding for 85 school districts and significantly reduced aid to 54 districts. With no county governments, Connecticut’s structure forces its 169 self-governing cities and towns to compete for state aid to supplement property taxes. The continuing standoff has widespread implications as the state’s financial crisis worsens. For example, an approved state budget includes the funding Hartford needs to avoid bankruptcy in the coming weeks. As just reported by the Connecticut Mirror, the “budget fight threatens credit for a third of [Connecticut] municipalities.”

Susan Haigh’s reporting for the Associated Press provided an update on the state budget process as of Sunday, October 15th.

For the past week, Democratic and Republican legislative leaders have been holed up in the state Capitol, without Democratic Gov. Dannel P. Malloy, combing line-by-line through budget documents. They said they have been discussing ways to not only cover a projected $3.5 billion deficit in a roughly $40 billion two-year budget, but to make lasting fiscal changes in hopes of stopping what’s become a cycle of budget crises in one of the nation’s wealthiest states.

On Monday, October 16th, Malloy offered his fourth budget proposal for the new biennium asking the state’s General Assembly to reduce tax increases by accepting even deeper cuts to town aid, education and social services. Malloy presented his first budget on February 8th, followed by revised two-year plans on May 15th and September 8th. Malloy continues to insist that the state meet its pension obligations, according to Haigh’s reporting.

The governor, who expressed frustration Thursday over the slowness of the process, has warned that he’s willing to veto another budget, even a bipartisan one, if he believes it includes “gimmicks” to cover the red ink, such as reducing payments to state employee pension funds.

NPQ reported several days after the Connecticut fiscal year began on July 1st on what nonprofits might expect with no state budget. Haigh provides an update on how the governor’s executive order reduced funding for “social service programs, such as day services to people with developmental disabilities and initiatives serving people leaving prison.”

The Connecticut Mirror offers perhaps the best daily update on the budget process and the consequences of the impasse. Malloy’s signature prison reform “Second Chance Society” legislation is a national model for reducing penalties for drug possession and helping people charged with nonviolent crimes to apply for parole. Despite this exemplary commitment, the state’s Department of Correction lost 4.5 percent in this fiscal year’s first-quarter funding.

Jeff Grant, the executive director of Family ReEntry, which helps inmates leaving prison and their families, said his agency escaped specific cuts this month but said its non-residential behavioral health programs were cut last year and services to former inmates are diminishing across the state.

He said he has seen hundreds of former inmates, including himself, who were helped by mental health and addiction counselors as well as housing and employment placements provided by state-funded non-profits.

“When I came out, I went to court-ordered drug and alcohol counseling, which I did do in state here. Thank god it was available for me,” Grant said. “With the opioid epidemic that’s going on now and the cutbacks of a lot of these services, there are a lot of sick and suffering people out there. I had an opioid addiction. I’m clean and sober 15 years this week actually, but I don’t know what would have happened without the programs.”

As the state moves into its fourth month without a budget, the Connecticut Nonprofit Alliance provides tools and on its website homepage to help people urge the state’s 187 legislators to pass a budget soon that protects nonprofit programs and services.—Jim Schaffer