Communications Director, Connecticut Hospital Association
110 Barnes Road, Wallingford, CT
rall@chime.org, 203-265-7611
CT Insider – Thursday, January 30, 2025
By Cathy Osten
When people talk about state budgets, it’s usually broken down this way: Democrats vs. Republicans, right vs. wrong, spending vs. taxes.
But with the 2026-27 state budget-making process now underway in Hartford, let me assure you that Joe Biden, Donald Trump, and Connecticut politicians have already each had a huge impact — and will continue to have a huge impact — on your quality of life here in the state.
So, before Gov. Ned Lamont unveils his executive branch spending plan for 2025 and 2026, here are three things you should know about what will actually shape the state budget over the next two years.
First: There is no more ARPA money.
ARPA stands for the American Rescue Plan Act, approved in March 2021. ARPA was $1.2 trillion in government spending to help Americans recover from the disastrous impacts of the COVID-19 pandemic, which killed more than a million Americans. About $2.8 billion in ARPA funds came to Connecticut.
Connecticut used its ARPA money for testing and vaccination programs, to expand access to high-speed internet, support nonprofits, address criminal justice, enhance childcare, provide students with additional financial aid and scholarships, support people struggling with mental health issues, make homes more energy-efficient, and a myriad of other uses. It was like having a winning lottery ticket several years in a row.
That money is gone. Yes, we made some interest on those funds. But any of the programs that ARPA touched will now have to be re-examined to see if they’ll continue. And if they do continue, how will we pay for them?
Second: Donald Trump is now president.
Whether or not you voted for Donald Trump doesn’t matter; he and the Republican-controlled Congress now decide how much federal money Connecticut receives. In a typical year, Connecticut receives about $10.5 billion in federal aid (including highway funds), which funds about one-third of our state budget. But over the next four years, who knows? Trump has already hinted at ending FEMA to pay for natural disasters and has called for a “pause” in federal financial assistance programs to states. He’s also looking to cut $2 trillion in federal spending.
What does federal money pay for in the Connecticut budget? I’ve got a 25-page, single-spaced list of programs: sexual assault services, National Guard construction, community policing, food banks, senior nutrition, outdoor recreation, pipeline safety, leaking underground storage tanks, lead paint removal, crop management, immunizations, mental health treatment, child support enforcement, caregiver support, school breakfasts, special education, English language teaching, childcare, student Pell grants, and crime victim restitution. That’s 20 items out of about 900.
Let’s say the Trump administration gives Connecticut gets a 10% “haircut” of $900 million per year, or $1.8 billion over our two-year state budget (we probably won’t know until the fall). Can Connecticut make up any of that, on top of our lost ARPA funds?
Third: The fiscal guardrails
Everybody loves guardrails, right? Except when guardrails become roadblocks, which is what we’re approaching right now with the state budget.
As of late January, we have $1 billion in room under the spending cap. Great news, right? But most all of that space is already eaten up by cost increases in our existing budget.
What does that mean? That means that while your spouse says you two can spend $1,000 on a new refrigerator, you’ve only got $500 in your checking account and that’s already going to pay for gas and groceries and tuition and health insurance. So, no new refrigerator. Also, most of the $3 billion in new funding requests that I’ve already received from various lobbyists and third-party groups will probably never see the light of day.
Governor Lamont will propose his budget ideas in the coming week, then state legislators will take about two months dissecting it before coming up with our own plan. Then both of these plans will be tossed in the shredder in favor of closed-door budget talks.
But regardless of the timelines and the talking points, please remember what’s driving it all: ARPA, Trump, and the fiscal guardrails.
State Sen. Cathy Osten, D-Sprague, is co-chairwoman of the Appropriations Committee.