CT Paid Leave finance committee advances FY2026–27 draft budget as fund balance tightens; review period shortened

The Connecticut Paid Leave Authority Finance and Audit Committee on March 27 heard a presentation on the draft fiscal year 2026–27 budget and voted to shorten the committee’s formal review period so the proposal can proceed to the board in May.

Dave, who led the presentation, outlined three budget components: an operating budget of about $17.5 million, a bond budget that will use roughly $300,000 this year, and a contribution budget built around expected payroll contributions. "The administrative fee is basically based on our total operating expenses for the year," Dave said, and he listed the operating-budget drivers: payroll and benefits ($11.4M), a contact center ($1.7M), outreach ($1.0M), software licenses ($917K), community engagement contractors ($757K), grievance adjudication ($215K) and fund-recovery fees ($207K). He said the operating headcount is budgeted to increase from 47 to 50 positions during the year.

Why it matters: committee members pressed staff about rising benefit payments and assumptions that determine solvency. The contribution budget assumes $504.1 million in payroll contributions, $16.4 million in investment income and benefit payments budgeted at $549.4 million. Dave told the panel the incident (utilization) rate used in actuarial work is budgeted at 5.7%, up from 5.2%, and that claims and benefit payments have trended roughly 10% year over year. "We are expecting the fund balance to decrease this year," he said, noting staff are preparing options to preserve solvency and will monitor the April contribution quarter.

Committee members sought detail on compensation and outreach. One member asked why the budget includes a 3% step increase in January 2027 in addition to a 2.5% COLA. Dave and staff explained that staff who are state employees follow collective-bargaining and state guidance for step/COLA mechanics and that nonunion increases typically follow state executive-branch guidance; staff said they would provide a historical lookback. Members also asked what comprises the $1 million outreach line: staff said it covers media buys (radio, billboards, online), production and consultant fees, employer webinars and community engagement activities.

On administrative costs and comparison metrics, the committee heard that cross-state comparisons are imperfect because other jurisdictions may not bill the same overhead to their paid-leave programs. "Other programs may have equivalent services performed by different state agencies," staff said, adding that early actuarial expectations had targeted administration near 5% at maturity and that the Authority’s current administrative share is under that threshold when accounting for direct payments for functions others do not perform.

Procedural action: the committee voted unanimously to shorten the bylaw-mandated 31-day review period for the draft budget to 28 days so staff can return feedback at the committee’s April meeting and the board can consider final action at its May 14 meeting. Dave had asked the committee to approve the shortened review period, noting the budget must be approved by May 31.

Spending-to-date: staff reviewed February financials. The operating account was negative $1.1M for the month, with year-to-date variances close to budget; notable monthly expenses included payroll ($705K), software licenses ($195K), a contact center charge ($137K) and outreach ($118K). Contribution activity in February was negative $37.3M, with a weekly benefit-payment rate around $9.7M for the month; the year-end projection (after the planned operating-to-contribution redesignation) showed a roughly $12.7M negative result versus budget, leaving the fund balance north of $570M in the projection.

What’s next: staff will revisit projections after the large April contribution quarter and return options for maintaining solvency. The committee’s next scheduled meeting will be the venue for finalizing questions and forwarding a recommended budget to the board.

Votes at a glance: The committee approved meeting minutes for Dec. 19, 2025 (motion carried), Jan. 23, 2026 (motion carried; one abstention recorded), and Feb. 27, 2026 (motion carried; two abstentions recorded). The committee unanimously approved a motion to reduce the draft-budget review period from 31 days to 28 days so the budget may advance to the board’s May meeting.

Sources: staff presentation and committee discussion at the Connecticut Paid Leave Authority Finance and Audit Committee meeting, March 27, 2026.