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Connecticut Paid Leave Authority approves FY27 budget as benefit payouts rise
Summary
The board approved a $17.5 million operating budget for fiscal year 2026–27 and a contribution‑fund budget accounting for higher benefit payments; staff said increased claims and conservative investment assumptions create a modest projected drawdown the authority will monitor.
The Connecticut Paid Leave Authority board on May 14 approved the authority's proposed fiscal 2026–27 budget, including a $17.5 million operating budget and contribution‑fund projections that reflect rising claim payments.
At the meeting, finance lead David Salazar Austin summarized the proposal, saying the authority's budget breaks into three parts: "the operating fund," "the bond budget," and "the contribution budget," and that benefits are "the primary reason why we're here today." He laid out key line items: an operating revenue administrative fee of about $16.9 million, payroll and benefits at $11.4 million, a $1.7 million contact center contract with United Way, and roughly $1 million for outreach. The contribution fund opening balance was presented at roughly $573 million, with payroll contributions budgeted at over $504 million and claims and benefit payments budgeted at $549.4 million.
Board members questioned the increase in fund‑recovery expenses and the projected near‑term deficit. Molly Weston Williamson said she understood the fund‑recovery increase was reasonable but asked why the authority was budgeting to spend more in that area; Salazar Austin explained the rise reflects up‑front litigation and court costs tied to a fund‑recovery initiative. Board member Molly also raised the longer‑term projection that the authority will spend more than it collects next fiscal year and asked about options. Salazar Austin said that actuaries had expected a drawdown and that staff will work with actuaries and stakeholders to consider options over the coming months, noting "we have enough runway to take the appropriate action."
Staff said assumptions behind the budget include a 2.5% COLA and a 3% step increase in payroll, an 80% fringe rate (25% health care, 55% pension overhead set by the Office of the State Controller), an assumed incidence rate of 5.7% (up from ~5.2%), conservative investment income at 3.1% based on OPM guidance, and a $1.6 million redesignation of unused operating reserve back into the contribution fund. Dave noted the bond repayment schedule is fixed and part of previously authorized borrowing.
The board voted by voice to approve the budget. The motion carried. The board also discussed next steps for addressing projected funding gaps and said staff would return with additional analysis and possible options for board consideration.
The board adjourned at 10:30 a.m.
