CT Dems are nearing a budget deal. Trump’s spending bill could upend it

CT Insider – Tuesday, May 20, 2025
By Alex Putterman

HARTFORD — In recent days, lawmakers at the state and federal level have made progress on several bills with major implications for Connecticut.

At the state Capitol, Gov. Ned Lamont and top legislative leaders have resolved a dispute over Medicaid funding that had complicated the process of negotiating a two-year state budget. Multiple parties expressed optimism about discussions Monday, and legislators could vote on the budget as soon as next week.

In Washington, D.C., meanwhile, congressional Republicans have advanced a spending bill that would extend broad tax cuts while reducing funding for food assistance, Medicaid and more. If it passes, states would be left to backfill some of those costs, possibly forcing Connecticut lawmakers to return this fall to redirect money they had allocated only months earlier.

“I don’t know what’s coming out of Washington. Every day it sort of changes,” Lamont said Monday. “I wouldn’t be surprised if we’re coming back in September to say, ‘OK, now we have a better idea of what the feds are doing to us.'”

Here’s the plan, as explained by Lamont and legislative leaders: Pass a mostly normal budget during their current session, which ends June 4, setting aside some money for use later on if needed to respond to federal cuts. Then return this fall, after the federal budget has been resolved, to make adjustments.

Speaker of the House Matt Ritter, a Hartford Democrat, said a special session in September would be focused narrowly on addressing federal impacts. Still, he wouldn’t rule out that money appropriated for one purpose this spring could be reallocated come fall to fill a gap.

“It depends on how bad it is,” Ritter said, referring to the federal budget.

Connecticut Democrats’ top concern is Medicaid, which provides health insurance for about 1 in 5 Connecticut adults. Congressional Republicans, as well as President Donald Trump, are looking to reduce spending on the program, possibly through new work requirements, which could leave millions more Americans without health coverage.

If Congress were to cut Medicaid funding, Democratic lawmakers in Connecticut would likely step in to bolster coverage in the state.

“We can’t possibly backfill everything, but there are some really important key things that we are committed to,” House Majority Leader Jason Rojas, D-East Hartford, said Monday. “And one of those, I think, is Medicaid.”

Connecticut Republicans say Democrats have created the problem for themselves and that federal cuts would be more manageable if the state had budgeted more conservatively. House Minority Leader Vincent Candelora on Monday accused Democrats of blaming Trump for their own budget issues.

“It’s not some other force in the federal government or some other recession,” said Candelora, R-North Branford. “It is actually their own inaction of not wanting to prioritize and deal with these issues as they come forward.”

State budget update

Last week, Ritter sounded vaguely discouraged when asked about the state budget, saying legislative leaders and the governor’s office had made little progress toward a deal.

On Monday, he sounded much more optimistic, citing lawmakers’ agreement to fill a gap in Medicaid funding in a way that frees up money for other priorities under the state’s spending cap. Legislators were set to vote on the proposal Monday.

“Solving what we do today makes it easier to get to a budget,” Ritter said. “We believe, based on the parameters of the Medicaid deficiency package we’re voting on, it will give us the ability to spend more money than, perhaps, the administration originally proposed, and that will help us pay for things like municipal aid, special education, hopefully Medicaid.”

Lamont seemed similarly upbeat about the prospects of a deal on a two-year budget that will cover the 2026 and 2027 fiscal years.

“We’ve got a broad framework right now what we want to do in ’26 and ’27,” he said. “We’re in the red zone.”

Still, Lamont acknowledged Monday that “the last 20 yards is the toughest,” indicating he and the legislative leaders were “a couple hundred million dollars” apart in negotiations.

Generally, top Democrats in the legislature have advocated for additional funding for key priorities, while Lamont has proposed a more conservative approach that respects the “fiscal guardrails” in place to constrain spending.

That dynamic remains in place heading into the final days of the legislative session. Ritter said he is hoping for more money for Medicaid reimbursement rates and special education. Lamont, when asked where he sees gaps between his office and the legislature, emphasized his desire to stay under the spending cap.

Ritter said he expects a budget vote next week, allowing lawmakers to focus on other things during the final days of the session.

Federal spending bill advances

One thing Lamont and Ritter agreed on Monday: their displeasure with the Republican spending bill advancing through Congress.

“They want to cut the heck out of Medicaid, which is going to hurt health care in Connecticut and 49 other states, and at the same time they’re making the deficit bigger,” Lamont said. “Go home, you’re just wasting my time. You’re making the economy a lot more fragile than it needs to be, and a lot of families are going to be hurt.”

Congressional Republicans are still debating details, and specifics are likely to change repeatedly in the coming weeks, but at its core, the spending bill would extend Trump’s 2017 tax cuts, introduce some new tax breaks, increase funding for border enforcement and cut funding for Medicaid and food assistance.

The ultimate effect would be decreased taxes but a larger deficit and a weaker social safety net.

“They’re cutting to give the richest Americans tax cuts, and that’s where I just disagree,” Ritter said. “They’re going to give people who won’t even see it, won’t even feel it, and certainly don’t need it a massive break, all in the name of cutting food benefits.”

To prepare for cuts, Democrats plan to set aside money in the state budget they can allocate as necessary come fall.

“We’re passing a budget with a significant contingency,” Rojas said.

Connecticut Republicans have generally cheered on Congress’s efforts. Candelora acknowledged the Republican spending bill will likely lead to cuts for Connecticut and that state legislators will “have to address it” in the fall but blamed Democrats in the state for failing to responsibly budget around that scenario.

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