Lamont to spare UConn, CSCU from required spending cuts

Hartford Business Journal – Friday, August 1, 2025
By Keith M. Phaneuf

Gov. Ned Lamont will not ask public colleges and universities to sacrifice further over the next year as his administration tries to achieve big efficiency savings ordered by legislators in the new state budget, officials said.

The governor’s budget spokesman, Chris Collibee, confirmed Tuesday that neither the University of Connecticut nor the Connecticut State Colleges & Universities system would be asked — at least initially — to forfeit any more money as they adjust to the loss of hundreds of millions of dollars in federal pandemic grants.

But that won’t be good news for other executive branch agencies. To keep spending under the constitutional cap, Lamont will have to find the $106 million in savings required by the legislature somewhere else — if higher education, which accounts for nearly one fifth of the annual budget, won’t absorb any of it.

“I’m grateful that the governor’s decided not to hold back any funding for CSCU and UConn institutions,” said Rep. Gregory Haddad, D-Mansfield, co-chairman of the Higher Education and Employment Advancement Committee, who added those units already have “a significant amount of cost-cutting to accomplish while trying to prioritize student services and maintain affordability.”

Higher education units, collectively, must do without about $270 million in federal pandemic grant funding that support their operations last fiscal year, which wrapped on June 30.

The General Assembly has struggled increasingly in recent years to adhere to a spending cap that keeps most state budget growth in line with household income or inflation.

The governor — a fiscal moderate — and his fellow Democrats in the legislature’s majority have postponed a showdown over higher education funding since 2021 thanks to more than $2.8 billion in emergency pandemic relief Congress granted Connecticut through the American Rescue Plan Act [ARPA].

Faced with universities’ requests for more funding, the governor and lawmakers normally have two options: Deny those asks, risking programmatic cuts, tuition hikes, or both, or grant them, shifting resources — already limited by the cap — away from other programs.

Instead, years ago, they chose a third option: assigning hundreds of millions in temporary ARPA dollars, which could be spent outside of the cap system, to cover ongoing higher education costs.

But state officials knew those ARPA dollars would be exhausted by 2026 and that using them to cover recurring expenses was a ticking fiscal time bomb, a huge hole that eventually would have to be filled some other way.

Lamont says universities should have done more to prepare for the eventual loss of those funds. But higher ed officials sought that support, at numerous public hearings and meetings, to cover regular operations, and many legislators say everyone, including Lamont administration officials, understood this.

But Lamont faces his own fiscal challenges.

The $27.2 billion spending plan legislators set for the fiscal year that began July 1 directs the Executive Branch, which oversees the bulk of spending, to achieve $106 million in savings once the budget is in force.

Governors traditionally meet these savings targets by spreading the pain among dozens of state agencies, holding back a share of their allotments. And by exempting higher education, Lamont is taking a big piece of the budget pie out of the cost-saving exercise.

UConn expects to spend almost $3.7 billion this fiscal year on its main campus in Storrs, its regional campuses and its Farmington health center combined.

The CSCU system, which includes four regional universities, 12 community colleges and the online Charter Oak State College, has a $1.2 billion budget.

Together, the spending plans for these public colleges and universities represent almost one-fifth of the entire state budget.

Collibee added that while there are no plans to reduce funds for higher education now, things could change.

“The administration may still choose to apply the remaining holdback authority, including potentially in higher education, if we believe spending or revenue trends warrant that action this fiscal year,” he said.

That was the situation this past fiscal year.

Lamont initially exempted higher education from helping him meet a $209 million efficiency savings target for 2024-25. But the administration reversed itself in late March after the General Assembly went against Lamont’s wishes and ordered a supplemental $40 million increase in special education grants for K-12 school districts.

Legislators said the funding was crucial and that a growing gap between the demand for special education needs and local resources to cover them was pushing district school budgets into crisis.

Lamont, who had proposed boosting special education aid by $40 million — but not until July 2026 — countered that the state budget already was on pace to exceed the budget cap and that legislators needed to make tough choices and trim spending.

The two sides eventually agreed to send the extra $40 million to school districts right away, using a technical accounting maneuver, which Lamont traditionally has decried, to skirt the spending cap issue.

The administration responded by ordering about $41 million in spending reductions across numerous state agencies, including $6 million from public colleges and universities.

Higher education units hope to avoid a situation like that this year and are taking steps to adjust to the loss of ARPA dollars.

The CSCU system came under fire last spring when the Connecticut Mirror disclosed it held more than $600 million in reserves, a huge cushion equal to roughly half its operating budget.

UConn’s budgetary safety net was more modest last spring, involving about $170 million for the Storrs and regional campuses and about $300 million for the health center.

But all higher ed units are beginning to spend their reserves.

The CSCU system expects to dedicate $162 million to support the budget and mitigate program cuts, according to spokeswoman Samantha Norton.

UConn officials still are working on various cost-cutting initiatives, but spokeswoman Stephanie Reitz said as much as $38 million in reserves could be used to support the main and regional campuses and another $62 million to bolster the health center’s budget.

Both Haddad and Sen. Derek Slap, D-West Hartford, the other co-chair of the higher education committee, called for higher education units to reduce their reserves last spring.

Slap also praised Lamont this week for not asking higher education to forfeit funds to meet the budgetary savings mandate.

“The state can’t backfill everything, but I think to not subject them to holdbacks right now is a good thing, especially considering what’s coming down the road,” Slap said, predicting recent federal spending cuts ordered by Congress and President Donald Trump would take a heavy toll on research grants and other programs that support higher education.

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