Gov. Ned Lamont and Democratic legislative leaders have nearly wrapped plans to use part of last fiscal year’s historic state budget surplus to blunt federal cutbacks to vital human service programs.
The two sides won’t use more than $500 million from last fiscal year’s $2.5 billion surplus — the second-largest year-end cushion in state history — for a response fund, House Speaker Matt Ritter, D-Hartford, and Senate President Pro Tem Martin M. Looney, D-New Haven, said Wednesday.
But the two sides still haven’t settled on an amount, nor have they specified how and when funds might be disbursed to bolster certain programs.
Still, both Ritter and Looney said they expect the General Assembly to be called into special session Nov. 12 and 13 to approve a response fund.
“This fund is meant as a bridge,” Ritter told the Connecticut Mirror on Wednesday. “It’s a short-term fund that’s meant to address more immediate things” that may crop up between now and adoption of the next state budget in early May 2026.
Most of the big cutbacks in federal aid that President Donald Trump and Congress ordered last July won’t take effect until late 2026 or later, leaving Lamont and the General Assembly more time to plan a response.
But the partial federal government shutdown triggered Oct. 1 by congressional gridlock has created a host of short-term threats.
The Special Supplemental Nutrition Program for Women, Infants and Children — commonly known as WIC — already is out of money. Connecticut, which administers the federal program here, is fronting the $6 million needed monthly to maintain aid to about 52,000 infants, older children and women.
The Supplemental Nutrition Assistance Program, commonly known as SNAP, which provides about $72 million in nutrition assistance to more than 391,000 Connecticut residents monthly, runs out of reserves in early November, according to the Lamont administration.
The same is true for the state’s winter heating assistance program, which is funded chiefly with federal Low Income Household Energy Assistance Program grants. The Lamont administration projects more than 100,375 households will need heating assistance this winter, up more than 12% from one year ago.
And the governor’s social services commissioner, Andrea Barton Reeves, said if the federal shutdown lasts until March, it likely would impact Medicaid, a massive program that pumped almost $7 billion in federal funding last year into nursing homes, at-home care services, hospitals, federally qualified health clinics and health insurance for low-income households in Connecticut.
Federal block grants that Connecticut uses to support community action agencies — regional nonprofits that link vulnerable households with housing, energy, employment, child care and other human services — also face a funding crunch in early 2026.
“I think that we are fortunate to have a response fund,” Looney said. “Many other states are facing the same cuts and crises but without the capacity” to temper those reductions.
The $2.5 billion surplus Connecticut generated in the fiscal year that closed June 30 represents 11% of the General Fund. Given that just one-quarter of the state budget involves discretionary funding, leaving 11% unspent is huge.
Since the General Assembly established an aggressive series of budget caps in 2017, Connecticut has generated an annual average surplus of $1.8 billion, or more than 8%.
State officials have used these surpluses to build reserves and shrink pension debt, though many concede that effort has taken a toll on education, health care, municipal aid and other core programs.
Looney also noted that even if $500 million from the last surplus is deposited in a response fund, there is plenty available to meet other needs.
Officials estimate about $220 million from that surplus would be added to the $4.1 billion already in Connecticut’s rainy day fund. This deposit would ensure the rainy day fund remains equal to 18% of annual operating costs, the maximum allowed by current law.
Another $300 million would be used, as Lamont and lawmakers agreed last spring, to launch a new effort to dramatically expand affordable child care services.
The remaining $1.5 billion would be used to further shrink pension debt, which entered last fiscal year at about $35 billion.
State Treasurer Erick Russell said Wednesday he remains confident that Wall Street credit rating agencies would not object to this plan for allocating state budget surplus.
“I think this is consistent with the work we have done and the track record of fiscal responsibility,” the Democratic treasurer said, adding it is prudent to protect programs against “the chaos, uncertainty and cruelty that’s coming out of Washington.”
Last spring, when Trump and the GOP-controlled Congress began planning big cutbacks in federal aid to states, majority Democrats in the General Assembly first proposed redirecting a portion of these big surpluses to supplant lost assistance and mitigate the deepest federal cuts.
Connecticut officials specifically planned two lines of defense: one for the short-term and another for down the road.
Next month’s special session would set aside funds to shore up holes in key programs during the fall and winter — whether caused by federal cuts or the government shutdown.
The long-term response is partially in place. State lawmakers modified one budget cap last spring, moving $600 million from the must-save category back into the General Fund for use in future years. But legislators still may need to modify another cap before those dollars can be used, and that’s unlikely to occur before the next state budget is adopted in May 2026.
Lamont’s budget spokesman, Chris Collibee, confirmed Wednesday only that the administration and Democratic legislative leaders continue to talk about a response fund.
“Nothing has been finalized at this time,” he said.
House Minority Leader Vincent J. Candelora, R-North Branford, criticized the response fund. Connecticut should be following Washington’s example, he said, and seeking first to tighten its own spending before tapping state reserves to bolster federal programs.
“The Democrats [in Connecticut] have become very unprincipled,” Candelora said, adding that if the economy slips into recession this winter, as some economists predict, the state budget surpluses that legislators are counting on could vanish quickly.
“The legislature and the governor have already forgotten what happens when the economy goes south,” he said.

