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Connecticut State Capitol Credit: Shahrzad Rasekh / CT Mirror

Overview:

Cost of most federal cutbacks won't be known for months

Connecticut could face close to $180 million in annual extra costs to its supplementary nutrition and food stamps program within the next five years, according to a very preliminary analysis of recent federal budget cuts by Gov. Ned Lamont’s administration.

But the memorandum Lamont’s budget office issued Friday did not project added costs tied to the biggest area that President Donald Trump and Congress targeted for cutbacks: the Medicaid program, which will pump nearly $7 billion in federal funds this year into Connecticut nursing homes, hospitals, health clinics, social service programs and into health coverage for low-income adults and children.

Some policy changes in the “One Big Beautiful Bill Act,” enacted in July to finance huge federal tax cuts, took effect immediately. But many don’t kick in until after the November 2026 elections, and others have no financial impact on Connecticut until 2028 or later.

The Connecticut legislature directed the Lamont administration to provide lawmakers with an update in early August, once all federal budget levels had been set.

Lamont’s budget director, Jeffrey Beckham, noted that despite the bill’s passage in July, it doesn’t represent final congressional action, and federal officials won’t fix many spending levels until this fall or later.

“We anticipate additional federal actions will be adopted in the coming months for which the state will also need to consider what response, if any, is appropriate,” Beckham wrote in his memo to the General Assembly. “Finally, we note that many provisions in the act have future effective dates, and even those that were effective on passage require additional clarity and guidance from the federal government before we have a full understanding of all of the impacts, both primary and secondary.”

In other words, Connecticut officials likely will be making program adjustments and spending decisions related to this for years to come.

The General Assembly is expected to meet in special session in late September or early October, and leaders have left open the possibility of making some adjustments to state spending to response to the federal cutbacks.

Leaders of the legislature’s Democratic majority have said for months they expect that Connecticut may want to invest hundreds of millions more of its own dollars annually — starting in the near future — to blunt the pain of federal cutbacks.

And while most of that pain is expected to come in the Medicaid program, Beckham wrote that there are issues already identified in the Supplemental Nutrition Assistance Program, or SNAP, a joint effort by federal and state governments to provide food stamps and other aid to low-income adults and children.

Connecticut serves more than 391,000 residents yearly through this program, providing $894 million in benefits.

The Lamont administration estimates Connecticut could lose up to $130 million annually, by 2029 or 2030, because Congress has tightened rules for states with high “error rates.” This refers to how often they issue food stamp benefits to ineligible households, or how frequently they issue the incorrect amount.

Washington also has indicated it will cover a small share of the SNAP program administrative costs, which should add $43 million per year to Connecticut’s expenses by 2027.

Congress and Trump also are ending a national obesity prevent grant offered through the SNAP program. That’s another $4.6 million Connecticut must do without.

Keith has spent most of his four decades as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.