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CT Paid Leave Authority committee reviews FY2026 draft budget, eyes reserve transfer
Summary
Staff presented a largely unchanged FY2026 draft budget showing operating revenue of about $16.7 million and expenses of roughly $16.9 million; officials plan to transfer operating reserves back to the contribution fund and noted a reduction in bond authorization from $50 million to $26 million in the legislature’s bond bill.
The Connecticut Paid Leave Authority Finance and Audit Committee reviewed the authority’s draft fiscal year 2026 budget on April 25, with staff presenting a status update and projections for operating, bond and contribution accounts.
Dave, the authority’s finance presenter, said the overview would be "brief because we haven't had any changes to the budget since the last time presented it." He said the operating budget shows revenue budgeted at about $16.7 million and expected expenses of roughly $16.9 million, and that the authority will apply a carryforward of about $160,000 from operating reserves to balance the year.
Dave outlined a plan to "redesate" (transfer) approximately $14.2 million from the operating reserves back into the contribution fund so those funds can earn interest and be available for future benefits and expenses. He said the authority presently holds about $15.4 million in operating reserves accumulated over the past four-plus years.
On bond funding, Dave told the committee the legislative finance committee’s bond bill reduced the total authorized bond amount for the authority from $50 million to $26 million; the authority expects an allocation of about $16 million initially and said it could seek additional authorization in future years if needed.
For the contribution fund, Dave reported an expected balance of more than $597 million by year-end, driven by roughly $490 million in payroll contributions and about $475 million in benefits paid. He noted benefit payments have been running at an elevated pace: benefits paid for March were about $35.2 million, a weekly run rate of roughly $8.8 million.
On spending through March, staff reported operating-month net activity of just over $1.1 million and month expenses including payroll ($709,000), contact center ($132,000), outreach ($103,000) and software licenses ($76,000). Year-to-date figures showed a negative variance primarily because a $5 million transfer was deferred; bond spending for the month was about $98,000 with approximately $1.5 million of bond funds remaining.
Dave said investment income for the period came in at about $2.1 million (a 4.4% short-term yield) and that the contribution fund balance at the end of March was just over $565 million. His outlook left the authority solvent and on track to finish the year with a positive net activity and a projected contribution fund of roughly $580 million at fiscal year-end.
The committee did not raise questions during the presentation. Dave said the committee hopes to finalize the budget with the finance and audit committee and bring it to the board for approval at the next board meeting; he referenced a board meeting date in his remarks.
Next steps: the committee will finalize its recommendation and the board will consider the budget at its upcoming meeting, per staff schedule.
