Gov. Ned Lamont, who has been under pressure to more forcefully respond to federal cuts in social services, said Monday he has agreed to hundreds of millions of dollars in emergency funding to be addressed next week in a special session of the General Assembly.
The legislation would divert $500 million now slated for the state pension funds to the state’s budget reserves, which now stand at the statutory maximum of $4.3 billion, or 18% of the general fund. The result would be Connecticut having up to $4.8 billion to confront federal cuts and other contingencies.
“We’re going to be going forward. We got a special session. We’re going to have money set aside to be able to take care of people in need,” Lamont said, speaking to reporters at a food pantry in Hartford.
House Speaker Matt Ritter, D-Hartford, was presenting the plan to his caucus Monday night, and Senate President Pro Tem Martin M. Looney, D-New Haven, said that the $500 million would be a significant step toward bolstering the state’s ability to provide necessary services.
Prior to the month-old federal government shutdown, Connecticut lawmakers and Lamont were considering whether to bolster the state’s rainy day fund in response to anticipated Medicaid cuts and tighter eligibility rules for SNAP food assistance in the “One Big Beautiful Bill” signed on July 4 by President Donald Trump.
The Trump administration’s planned suspension of SNAP benefits that help feed more than 360,000 people in Connecticut, which now is likely to be at least partly mitigated by a court order releasing some federal SNAP funds, greatly increased pressure on Lamont and the legislature to take action.
It was unclear Monday if the Trump administration would once again suspend SNAP if the federal shutdown persisted. Looney said the bolstered budget reserves would give Connecticut the ability to respond.
“If the SNAP suspension continues, we expect a significant amount of money would go to restore that and, in addition, LIHEAP is a concern as as well,” Looney said. LIHEAP is the federally funded low-income heating and energy assistance program disrupted by the shutdown.
“The shutdown just made the fund even more important and more imminent in terms of getting it up and running,” Ritter said.
Lamont released $3 million last week for aid to food pantries, a modest offset to the loss of SNAP benefits that provide $72 million in food to Connecticut recipients every month. The emergency aid is paying for food that the nonprofit Connecticut Foodshare purchased for distribution this week to food pantries.
The legislature’s Black and Puerto Rican Caucus met with Lamont on Friday to urge him to provide greater aid given the immediate suspension of SNAP and the anticipated loss of Medicaid funding as a means to partly offset tax cuts in the bill Trump signed.
“You know, $3 million going to Foodshare, standing by itself, doesn’t look very great,” said Rep. Antonio Felipe, D-Bridgeport, a leader of the caucus. “It just feels like there can be more done. And we shouldn’t sit there and say, ‘We can do more.’ We should be laying out how we’re going to do more, like states like Virginia and Hawaii have done.”
It is a message Lamont has been hearing as he’s campaign for municipal candidates. As he left a rally in New Britain on Saturday, Sherry Manetta confronted him and urged a more aggressive approach to both the federal cutbacks and the Trump administration’s pursuit of undocumented immigrants.
The governor politely listened, she said.
Sen. Gary Winfield, D-New Haven, said he told the governor Friday that it would be unacceptable not to set aside resources to protect residents against losses in federal aid for food, heating and health care.
“That doesn’t mean you have to spend it all right away, but it means you’re able to do the things you need to do,” Winfield said.
Under the terms of a volatility cap adopted in 2017, surpluses generated by more volatile revenue sources cannot be readily spent. Absent an emergency declaration, they must go into the budget reserves until the maximum is reached, then flow into the state’s underfunding pensions.
Projections are that the state will end the fiscal year next June with a surplus of $1.8 billion, another in a string of surpluses that have stabilized the state’s finances and increased complaints that too many needs are going unmet in a time of plenty.
Treasurer Erick Russell has said that increasing the budget reserves by $500 million will not violate the bond covenants that are an element of the state’s fiscal guardrails.
“His recommendation is that $500 million would be fully defensible,” said Looney, who noted others are pressing for more money to be set aside. “And certainly I would, in an unrestricted world, I would support larger numbers, too. But I think the $500 million is, given the constraints we’re operating under, that’s a reasonable, realistic number.”
Lamont spoke to reporters during a visit to Hands on Hartford, a nonprofit that provides a range of services including a food pantry. On Monday, the refrigerated cases that normally contain fresh produce were empty.
He asked Jane Bermudez, the executive director, if she was expecting a delivering from Connecticut Foodshare. Deliveries of the food purchased with the $3 million emergency grant started to go out that morning, Lamont said.
Bermudez said she was expecting a delivery. About 75% of the food it distributes comes from Foodshare, she said.
The governor was accompanied by Attorney General William Tong, one of the litigants who succeeded in forcing at least a partial resumption of SNAP payments, and U.S. Sen. Richard Blumenthal.
“Thank you to you and your team at Hands on Hartford for helping to fill the gaps that have been created by the federal government and meet the needs of countless people,” Blumenthal said.
Both Tong and Blumenthal praised the governor for making the additional food aid available.
Lamont is close to announcing his candidacy for third term, and the ability to point to concrete action in confronting federal cutbacks would be a plus. After angering many Democrats for vetoing an omnibus housing bill, he has been negotiating a revised version for consideration in a special session.
Felipe, who is co-chair of the legislature’s Housing Committee, was among those angry at the veto. On Monday, he said Lamont has since been engaged in trying to deliver an acceptable replacement bill.
“I do have to give him credit for staying at the table the entire time and trying to come to some sort of agreement,” Felipe said.