Last fiscal year, Connecticut Paid Leave paid out roughly $104 in benefits for every $100 collected from workers’ paychecks. Despite workers already contributing at the maximum rate allowed by law, its own annual report projects it will burn through nearly half its financial cushion by June 2029.
In FY26, which ended June 30, the Connecticut Paid Leave Authority collected $497.1 million from workers’ paychecks and paid $516.6 million in benefits — a $19.5 million gap. The full picture was worse. Counting investment earnings, operating costs and money still owed to and by the fund, costs exceeded revenue by $34.2 million. A $14.2 million transfer from the operating reserve softened the hit, but the fund’s adjusted balance still fell by $20 million.
Workers pay 0.5% of covered earnings — the maximum state law allows — to receive partial wage replacement during qualifying medical or family leave. Someone earning $60,000 pays $300 a year. The 2026 annual report describes Connecticut’s rate as low compared with other states, although benefits and employer contributions differ across programs.
Those deductions do not guarantee today’s benefits. If the authority determines that contributions at the maximum rate cannot keep the program solvent, state law requires it to reduce benefits by the minimum amount necessary.
Raising the 0.5% cap would take an act of the legislature. Workers could end up getting less when they need leave — or paying more if lawmakers raise the cap.
The General Assembly created the program without guaranteeing that the state would cover its bills. The 2019 law limits payments to money available in the fund. Lawmakers could vote to put more money in, but workers have no guaranteed state bailout to count on.
Annual reports show benefit payments growing faster than workers’ contributions. From FY24 to FY26, benefits increased about 36%, from $379.1 million to $516.6 million. Contributions from workers’ paychecks grew about 9%, from $457.2 million to $497.1 million.
“We knew that was coming from our actuarial studies, but it did come earlier than expected,” Controller David Marcone told the Paid Leave board on Oct. 8, discussing the first fiscal year in which benefits exceeded contributions.
Claims exceeded projections by 5.41%, while benefit payments ran $35.8 million, or 7.45%, above expectations. “This is the third year in a row that actual claim volume and actual benefit payments exceeded anticipated claims and payments,” the 2026 annual report says. Officials had expected claims to rise as more workers learned about the program and legislative changes expanded coverage.
Operating expenses have remained relatively steady since FY23 despite the growth in benefits. Officials described scrutinizing vacancies, software licenses and consulting costs. During the October meeting, a board member urged careful hiring and savings through attrition, saying those efforts should intensify if the authority planned to seek higher employee contributions.
Keeping overhead in check deserves credit, and the program isn’t running on empty: the fund had $567.1 million in cash on June 30. That money, along with investment earnings, helps cover what payroll deductions don’t.
After counting contributions still owed and subtracting unpaid claims, the fund’s balance stood at $618.9 million in June 2026. By the end of FY29, that balance is projected to fall to $316.7 million, with the program eating through nearly half its reserves in three years.
In FY29 alone, projected costs exceed revenue by $125.8 million. That includes benefits and the cost of running the program, even after counting investment earnings.
The fund still has enough money to pay claims in the near term. But it falls short on one of the board’s three financial tests: could it withstand two years of losses if claims surged?
Meanwhile, the maximum weekly benefit rises automatically with Connecticut’s minimum wage. The cap climbed from $780 when payments began in January 2022 to $1,016.40 in 2026 — about a 30% increase, without a separate legislative vote to increase paid-leave benefits.
On Sept. 4, CT Capitol Dispatch, operated by Senate Democrats’ communications staff, celebrated the program approaching $2 billion in benefits distributed. The post acknowledged the missed funding target, but did not explain that annual benefit payments had exceeded payroll contributions or point out the projected reserve decline.
The annual report says the program is reviewing how to strengthen its finances, but does not spell out the changes under consideration. Lawmakers who support paid leave owe workers a public explanation of how they intend to keep it funded. If they favor higher deductions, changes to benefits or additional state funding, they should say so and show what their approach would cost. The workers financing the program should not have to guess.
