Connecticut Paid Leave Authority board approves FY2025–26 budget, reduces administrative fee to $16 million

The Connecticut Paid Leave Authority board of directors voted May 8 to approve the fiscal year 2025–26 budget package, a set of operating, bond and contribution budgets staff said are built on conservative assumptions and recent program experience.

David Salazar Austin, who led the presentation, said operating revenue is budgeted at $16.7 million and operating expenses at just under $16.9 million. "The revenue is $16.7 million," he said, and the number reflects the authority's administrative fee for the coming year. Staff also proposed moving about $14.2 million from operating reserves into the contribution fund so that those funds can earn investment income rather than remain idle.

Why it matters: the package ties operating needs, planned bond spending and benefit projections together. The contribution budget — which supports benefit payments — reflects payroll contributions, investment income and a planned redesation of operating reserves into the contribution fund. The authority projects contribution receipts of approximately $490 million and benefit payments budgeted at about $475.3 million for the coming year.

Key assumptions and drivers: Salazar Austin told the board that the administrative fee was ratcheted down from a previously budgeted $20 million to $16 million based on historical trends and spending patterns. Staff also built in salary adjustments (a 2.5% increase in July and an anticipated 3% increase in January tied to state bargaining patterns), a 76% fringe benefit rate (about 24% for health care and 52% for pension), and a conservative investment income assumption of 4.1% drawn from state guidance. The budget includes a contingency of $100,000.

Bond program: Staff described $50 million of total bonds previously authorized for system builds. Salazar Austin said the legislative finance committee had included language in a bond bill to reduce that total authorization from $50 million to $26 million; if that change becomes law, staff said, it will effectively make $10 million more bond authority available than previously expected in the near term. The authority is responsible for bond debt service and plans bond spending for continued system enhancements, fund recovery work and security improvements.

Board action and context: After discussion and questions about salary and actuarial assumptions, a motion to approve the FY2025–26 budgets was made, seconded and carried by voice vote; no formal roll‑call tally was read into the meeting minutes. Chair (recorded in the meeting transcript as Eleanor) declared the motion carried.

What’s next: Staff said they will continue to work with the authority's actuaries and the Office of Policy and Management on assumptions and will present quarterly actuarial updates. The authority also plans to monitor investment returns and claims trends carefully; staff noted that higher claim volumes and approval rates have increased benefit spending in recent months.

Ending: The budget vote concluded the presentation and moved the board on to other agenda items.