CT, WI sign budgets following difficult negotiations

Connecticut and Wisconsin both ended their protracted budget negotiations with the governors signing budgets in late September and late October. Faced with budget constraints and uncertainty about the spending plan, Connecticut’s funding for economic and community development is decreasing along with funding for the state’s MEP center and Manufacturing Supply Chain program, with no general funds provided for them in the second year of the biennium. Wisconsin appears to be maintaining its status quo on TBED-related initiatives and has increased funding to universities that increase enrollments for “high-demand” degree programs, making $5 million available on a competitive basis.

Connecticut

After 123 days without a budget, Gov. Dannel Malloy signed Connecticut’s $41.3 billion FY 2018-2019 biennial budget into law on October 31. Malloy vetoed a section regarding the hospital tax provision that he says could open a $1 billion gap in the two-year spending plan.

Faced with a considerable deficit, the state’s budget includes little in the way of new funding. The state’s Department of Economic and Community Development will receive $29.9 million in FY 2018 and $29.3 million in FY 2019, roughly 9.5 percent less than the department received in FY 2017.  The DECD general fund budget includes $390,471 for CONNSTEP, the state’s MEP center, in FY 2018, down from the adjusted $447,275 in FY 2017. The budget does not provide funding for CONNSTEP in FY 2019.

The general fund will provide The Connecticut Center for Advanced Technology (CCAT) $497,082 for its Manufacturing Supply Chain program in FY 2018 (44 percent decrease from FY 2017), and no general funds for the program in FY 2019. 

For the department, the state’s capital budget would provide funding through bonds in the following programs:

• $15 million in each fiscal year of the biennium for the Bioscience Innovation Fund;
• $20 million in each year of the biennium for CT Innovations, the state’s main technology-based economic development agency;
• $8.5 million for the Connecticut Manufacturing Innovation Fund, with $3.5 million to be used as grant-in-aid to CCAT for R&D focused on Connecticut’s manufacturing supply chain in FY 2018; and,
• $6.5 million for the Connecticut Manufacturing Innovation Fund, with $1.5 million to be used as grant-in-aid to CCAT for R&D focused on Connecticut’s manufacturing supply chain in FY 2019. 

Incubator facilities at the University of Connecticut will receive a total of $10 million in the budget. In each year of the biennium, Connecticut State Colleges and Universities will receive $2.9 million for advanced manufacturing and emerging technology programs. The biennial bond budget from bond sales for the Connecticut State Colleges and Universities System also includes $25.5 million over the 2018-2019 biennium for the Advanced Manufacturing Center at Asnuntuck Community College.

Wisconsin

Following nearly three extra months of consideration and 99 partial vetoes, Wisconsin’s FY 2017-2018/2018-2019 budget passed in late September. Despite calls for expanding the state’s investment tax credit ($30 million per fiscal year), the program was reauthorized with limited changes, while the state’s research credits appear to have received additional funding for only the second year of the biennium ($2.1 million in FY 2018-2019).

The Wisconsin Economic Development Corp. (WEDC), funded at $35.3 million for FY 2017-2018 and $41.6 million in FY 2018-2019, is under new policy guidance not to provide forgivable loans and to generally adhere to commercial lending practices; any programmatic effects of this stipulation is not yet apparent. The budget also implements a new codification of WEDC’s grant program for fabrication labs and provides $500,000 per year for the awards.

For the state’s institutions of higher education, the budget does not include Gov. Scott Walker’s suggestion for a 5 percent tuition cut, but does implement “outcomes-based” funding of $26.3 million beginning in FY 2018-2019. The Board of Regents will develop the exact formula for the awards, but performance will be tied to student access, student progress, contributions to workforce and operational efficiency. An additional $5 million is made available on a competitive basis to universities that increase enrollments for “high-demand” degree programs, although a provision that would require the Board to define these programs was vetoed. In other budget measures related to higher education, the budget authorizes $5 million for the Brown County Innovation Center to be located in conjunction with the University of Wisconsin – Green Bay.