A popular, yet controversial tax on sugary drinks, or a “soda tax,” was debated at the Finance, Revenue and Bonding Committee’s public hearing on Monday, March 16.
The proposed bill, HB 5537, would require “each distributor [to] pay a tax on sweetened beverages, syrups and powders sold to a retailer for sale in the state of (A) two cents per fluid ounce of sweetened beverages, and (B) for syrups and powers intended for commercial or institutional use, two cents per fluid ounce of sweetened beverages that can be produced from each container of syrup or powder.”
The revenue derived from this tax would fund a program to give free school meals to every public school student in Connecticut.
An unhealthy diet is one of the highest risk-factors for chronic illnesses and premature deaths. Every year, around 124,000 people in the U.S. die from “preventable deaths” because of reasons related to “ultra-processed foods.”
A study sponsored by the American Heart Association found that around 80% of Connecticut residents supported a sugary beverage tax to fund universal free school meals.
A similar bill was proposed last year. Over time, that bill evolved from implementing a two-cent tax on sugary drinks to creating a working group to study how to fund free school meals for all Connecticut students. That bill died in the chamber.
And, in 2019, Gov. Ned Lamont proposed a 1.5-cent tax on sweetened drinks to fund school lunches. When that bill was proposed, his office estimated that it would bring in an additional $160 million in tax revenue. The state would need between $90 and $110 million to fund universal school lunches.
However, this estimate does not consider changes in consumer behavior.
A 2024 study that looked at five major cities across the U.S., including Philadelphia, San Francisco, and Seattle, found that the sale of sugary and sweetened beverages fell by 33% after sugar taxes between one and two cents per ounce were implemented.
“A tax like this could cost sales decline of up to 20% in those categories as consumers either buy less or shop across state lines, which is exactly what happened in Philadelphia,” Jordan Coe, the president and co-owner of Waverly Markets, said. “And when they cross state lines with their beverage purchases, they take their whole basket with them.”
The Legislative Director for Teamster Union New England Joint Council 10 said similar policies led to the reduction of work hours and job losses among union members in other states. And Scott Dolch, the CEO of the Connecticut Restaurant and Hospitality Association, predicted that a tax on sweetened drinks would harm the already-suffering hospitality industry.
And it would impact more than just soda.
A popular, yet controversial tax on sugary drinks was debated at the Finance Committee’s public hearing on Monday, March 16.
The proposed bill, HB 5537, would require “each distributor [to] [yay a tax on sweetened beverages, syrups and powders sold to a retailer for sale in the state of (A) two cents per fluid ounce of sweetened beverages, and (B) for syrups and powers intended for commercial or institutional use, two cents per fluid ounce of sweetened beverages that can be produced from each container of syrup or powder.”
The revenue derived from this tax would fund a program to give free school meals to every public school student in Connecticut.
A study sponsored by the American Heart Association found that around 80% of Connecticut residents supported a sugary beverage tax to fund universal free school meals.
Unhealthy diets are one of the highest risk-factors for chronic illnesses and premature deaths. Every year, around 124,000 people in the U.S. die from “preventable deaths” because of reasons related to “ultra-processed foods.”
A similar bill was proposed last year. Over time, that bill evolved from implementing a two-cent tax on sugary drinks to creating a working group to study how to fund free school meals for all Connecticut students. That bill died in the chamber.
And, in 2019, Gov. Ned Lamont proposed a 1.5-cent tax on sweetened drinks to fund school lunches. When that bill was proposed, his office estimated that it would bring in an additional $160 million in tax revenue. The state would need between $90 and $110 million to fund universal school lunches.
However, this estimate does not consider changes in consumer behavior.
A 2024 study that looked at five major cities across the U.S., including Philadelphia, San Francisco, and Seattle, found that the sale of sugary and sweetened beverages fell by 33% after sugar taxes between one and two cents per ounce were implemented.
“A tax like this could cost sales decline of up to 20% in those categories as consumers either buy less or shop across state lines, which is exactly what happened in Philadelphia,” Jordan Coe, the president and co-owner of Waverly Markets, said. “And when they cross state lines with their beverage purchases, they take their whole basket with them.”
The Legislative Director for Teamster Union New England Joint Council 10 said similar policies led to the reduction of work hours and job losses among union members in other states. And Scott Dolch, the CEO of the Connecticut Restaurant and Hospitality Association, predicted that a tax on sweetened drinks would harm restaurant owners in the state.
“I also think that trying to do bans and trying to tax might not be the solution we want for a healthy environment. We want people to choose; it is a choice,” Dolch said at the hearing. He went on to say, “There are other ways to find revenue, I don’t think adding new taxes to this industry should be one of them.”
There are exemptions in HB 5537 for 100% fruit juice and drinks packaged for personal use. But, as it is currently written, it would impact many alcoholic beverages, including cocktails and malt drinks, which includes almost all beers.
“Unlike other beverages, the alcoholic beverage industry is heavily regulated and heavily taxed. We pay taxes that no other product pays: federal excise tax, state excise tax, state sales tax. That is not the case with soft drinks and other sweetened beverages. We have entire sections of our general statutes that are dedicated to the regulation and taxation of alcoholic beverages,” Larry Cafero, the executive director of Wine and Spirits Wholesalers of Connecticut, said. “I believe this tax, which would be imposed at the distributor level and certainly passed on to the retail level, will become a cocktail tax.”
This “unnecessary” tax would hurt family-owned businesses, packaging stores and other businesses that are suffering because of a decrease in alcohol consumption, Cafero said.
But Rep. Moira Rader (D-Guilford) doesn’t think this is necessarily a bad thing.
“This is one of the things that’s kind of been proven to have a really positive double-edged sword, where you reduce the consumption of the very beverages that really cause a lot of public health issues, and you also really support public education and the kids in those buildings, and their food insecurity and the food insecurity of their families,” she said. “It has this very large ripple effect.”
When Connecticut lawmakers exited the state Capitol at the end of the 2025 session, they left behind some unfinished business, particularly around the state’s plan for regulating companies’ use of artificial intelligence, ensuring data privacy and establishing consumer protections around emerging technologies.
For a second year in a row, legislators were unable to agree on the direction of state AI policy, with pro-regulation lawmakers in the state Senate and the more regulation-shy Lamont administration disagreeing over the best course of action.
In the months since, the question of what Connecticut should do about AI has only become more pressing. In December, the Trump administration issued an executive order in the hopes of discouraging states from regulating the technology. Meanwhile, a growing number of businesses are incorporating artificial intelligence into their operations, and investment in the global AI market has reached hundreds of billions of dollars.
Without federal legislation, state legislatures — in Connecticut and elsewhere — are facing pressure to address everything from the ethics of AI use to the environmental impact of data centers and concerns over a dot com-like “bubble.”
And as “generative AI” — programs that use datasets and already-available information to power technologies like ChatGPT, Google’s Gemini, and Microsoft’s Copilot — is increasingly used in everyday life, the task facing regulators is only getting more complicated.
So far, few states have reached common ground on how to write the rules.
Pro-regulation lawmakers have proposed a wave of new measures, arguing that guardrails on the rapidly-changing technology will provide necessary protection to constituents worried about losing their privacy and intellectual property.
Opponents say the ever-growing list of AI “dos and don’ts” could have a chilling effect on local economies, curbing AI adoption and encouraging technology companies and innovation-focused businesses to move to friendlier markets.
In Connecticut, the debate is unfolding just as state economic development officials launchmultiple efforts to invest in artificial intelligence and emerging technologies, likening the initiative to a second industrial revolution.
With the 2026 legislative session quickly approaching, state lawmakers believe that the coming months provide a chance to define how Connecticut will approach the technology moving forward. Leaders of last year’s regulation efforts say the state can’t afford to miss its next chance.
“There’s definitely a debate over how strong our AI laws should be,” said Senate Majority Leader Bob Duff, D-Norwalk. “But I will tell you that if you talk to average people on the streets, they’re very concerned about AI and how it’s going to impact them.”
Lawmakers are gearing up for another swing at AI regulations
The Connecticut General Assembly’s record on passing AI-related measures is mixed. In recent years, state lawmakers have been able to push through a number of proposals, including data privacy regulation, new funding for AI training and education programs, and the criminalization of deepfake revenge porn.
Efforts to pass comprehensive legislation have been harder to get over the finish line.
Take Senate Bill 2, a wide-ranging proposal that sought to regulate how businesses use artificial intelligence in various ways, calling for the Department of Economic and Community Development to create a “regulatory sandbox” and seeking to limit the effects of algorithm-based discrimination. The bill was supported by Democratic leadership in the state Senate, and first emerged in 2024 after a state task force released a 255-page report on AI.
Gov. Ned Lamont opposed the bill, arguing that the measure would contribute to a fractured landscape of state AI regulations. State officials also suggested that lawmakers were acting too early, potentially scaring off future innovation in Connecticut.
Ultimately, S.B. 2 was amended to remove many of the business-related provisions and completely pulled references to algorithmic discrimination. While the amended bill passed the Senate with bipartisan support, the measure did not receive a vote in the House before the end of last year’s session.
For supporters of the legislation, the failure was frustrating, especially after last-minute amendments shifted the bill away from some of its original intent for the sake of broader appeal. “The bill had changed and become, I would say, more scaled back in the protections,” said state Sen. James Maroney, D-Milford, the author of Senate Bill 2 and a leading voice in the legislature on data privacy and AI.
“By the end of last year, [S.B. 2] was more of a disclosure bill, to use if AI was being used to make an important decision about your life,” he said.
In a December interview with the Connecticut Mirror, Maroney outlined his views on the state’s AI needs. He noted that he is far from an opponent of artificial intelligence, instead casting his desire for regulation as supporting the guardrails that will help structure the state’s future innovation efforts.
He said last year’s proposal would have provided those guardrails by accomplishing a multifaceted goal: “protecting” state residents, “promoting” responsible AI development, and “empowering” state government to use AI in ways that will benefit constituents.
Senate lawmakers intend to continue their efforts to “protect, promote, and empower” this year, planning a package of data privacy and consumer protection reforms alongside support for AI training and workforce development. One such bill has already been announced: a ban on facial recognition software in retail stores.
Both Maroney and Duff, the bill’s expected sponsors, said the measure was inspired by news that Wegmans Food Markets, a popular grocery chain, is using facial recognition software at some of its locations, including in its New York City grocery store. While the company said it’s not sharing the data with any third parties, the news still sparked concern over the use and storage of biometric data.
“The facial recognition and the biometrics and voice recognition, I think, are issues that are really much different than a camera looking for a shoplifter,” Duff said.
The bill’s sponsors say they hope to enact the ban before facial recognition software becomes widely used in the state. Earlier in January, reporting from CT Insider found that ShopRite, a New Jersey-based grocery chain with several locations in Connecticut, was using facial recognition software in several local stores.
As new legislation comes into shape, businesses in CT are wary
A spokesperson for the governor said he wants to focus on regulations that “protect the privacy and safety of Connecticut residents.”
“Governor Lamont continues to be supportive of any measures that protect the safety of residents when using AI, as well initiatives to upskill AI research and job training,” Rob Blanchard, Lamont’s spokesperson, said in an emailed statement. “While the federal landscape surrounding AI regulation continues to evolve, the Governor will continue to prioritize safety and education.”
State lawmakers who support regulating AI and data privacy told the Connecticut Mirror that their efforts are about ensuring state residents can engage with artificial intelligence on their own terms. In their view, regulation is both commonsense and necessary, and does not have to result in serious negative impacts for local businesses.
Some business leaders see things differently. The Connecticut Business and Industry Association, the state’s largest trade group, has been critical of efforts to strongly regulate AI use, arguing that at a time when the economy is stagnant, energy and other costs continue to impact companies, and small business owners voice concern and frustration over the state’s business climate, new AI policy could hinder innovation.
The adoption of new regulations on businesses, “puts us at much more of a risk of being a less business-friendly state, and can really impact investment in the state, and the ability for small businesses to want to operate here in the state,” said Chris Davis, CBIA’s vice president of public policy. “That can really hinder willingness to take advantage of the beneficial sides of artificial intelligence, the efficiencies that improve productivity and increase tax revenue for the state and really grow our economy.”
Davis said his concerns largely boil down to three points. First, there is a concern that proposed regulations in the state are blurring the lines between artificial intelligence and data privacy, creating a consistent “creep” of new regulations.
Next is the question of how the state might enact and enforce policies, particularly algorithmic discrimination and the use of impact assessments to track business employment outcomes.
Research has found that because of how AI gathers and uses already available information, some of which can contain biased and inaccurate data, AI systems can produce outputs that reinforce discrimination against marginalized communities. That can cause harm to people based on their age, race, and gender. Debate around the topic is currently making its way through the courts as a lawsuit, Mobley v. Workday, which challenges some AI-based hiring systems as being discriminatory.
Concerns over AI bias were a component of last year’s legislative debate, with some lawmakers arguing that failing to address algorithmic bias would leave a massive “hole” in any state legislation.
Addressing algorithmic bias has proven to be a major focus in statehouses; measures in more than 20 states were introduced in 2025.
The push to address algorithmic discrimination through specific and repeated assessment was of particular concern to businesses in Connecticut, Davis said, because it suggested that “every business is discriminating unless they can somehow prove that they’re not.” Davis said federal policy and state law — the Connecticut Fair Employment Practices Act, in particular — already require businesses not to discriminate.
Ultimately Connecticut lawmakers removed references to algorithmic discrimination from last year’s bill.
Davis’ final concern is the direct result of the other two: that by creating a wave of new regulations and then requiring businesses to keep track of how they are complying with them, the state could inadvertently limit AI growth by creating a system that is overly complicated, expensive and mired in paperwork.
Some of these concerns, along with a growing business interest in having input on new state policies, are part of why CBIA recently launched a Technology Council, a group that will review and offer business industry perspectives on proposed state technology policy. The group is expected to be active in the coming year.
Davis declined to discuss the pending facial recognition bill or other possible legislation that could emerge in the session, noting CBIA would prefer to comment after bills are introduced. Still, he said he hopes lawmakers will avoid enacting anything too rigid so that businesses have flexibility.
“We’re in a situation where we need to be able to find ways to be more productive and more efficient here in the state,” he said. “And AI has that opportunity.”
Chris Davis, vice president of public policy for the Connecticut Business and Industry Association, speaks with State Treasurer Erick Russell and former state Sen. John McKinney at the organization’s 2024 Economic Summit and Outlook. Credit: Courtesy of / CBIA
States are leading the way on AI regulation. The federal government wants to change that.
Asked about the ideal form of AI regulation for the business community, Davis said business and industry concerns are largely rooted in the piecemeal nature of state action. If each state adopts differing levels of regulation around AI and data privacy measures, that would make it difficult for businesses and consumers alike to navigate issues across state lines.
More specifically, there is concern that Connecticut could end up on the stricter side of the regulatory divide, and that companies looking for looser standards might move somewhere else. This is part of why S.B. 2 proved controversial last year, and was a factor in why the pro-business Lamont voiced his preference for other states to take the lead on adopting AI regulations.
The earliest adopters of comprehensive AI regulation have also run into their own troubles.
Colorado — for one — has emerged as a sort of national test case. In 2024, the state enacted the Colorado Artificial Intelligence Act, a comprehensive regulatory measure that addressed algorithmic discrimination. The law was the first broad measure approved at the state level, and the Colorado bill has been viewed as a model that could potentially influence other states looking to adopt regulations.
The fairly new law continues to be a source of controversy ahead of its expected implementation later this year, with supporters and opponents remaining at odds as the state braces for higher than expected implementation costs. Colorado lawmakers are currently looking to revise the law in the current 2026 session.
The continued discussion and delays in Colorado offer an early lesson: that lawmakers in other states will need to establish a variety of technical standards, from concise regulatory definitions, to easily navigated financial frameworks, and clearly-structured review processes for businesses if they hope to adopt comprehensive AI regulation.
At this point, many states seem more interested in adopting smaller, more incremental bills over large legislative packages. According to the National Conference of State Legislatures, almost every state considered an AI or consumer privacy bill in 2025, with further action expected in statehouses this year.
For now, Connecticut also seems likely to take a more targeted approach in 2026, and early discussions at the start of the session seem likely to focus on data privacy.
“Whenever you bring up privacy issues, there’s a lot of things that we can talk about,” Duff said.
As Connecticut lawmakers work through these questions, the federal government is looking to have its own say on state AI efforts. The Trump administration’s December executive order warned states away from AI regulations, arguing that a patchwork of regulation could negatively affect interstate commerce. The administration instead supported a “carefully crafted national framework”, a singular federal standard establishing national rules on AI and related consumer protections.
The order also threatened to pull back leftover broadband deployment funds from states that have passed “onerous” laws around AI.
President Donald Trump signs an executive order relating to AI in the Oval Office of the White House, Thursday, Jan. 23, 2025, in Washington. Credit: Ben Curtis / AP Photo
Still, federal efforts to cut off state legislation may not have much of a chance. “A lot of the things in the executive order are — I don’t want to say they’re not enforceable, but they don’t actually do that much,” said Gowri Ramachandran, the director of elections and security for the Brennan Center for Justice, a legal and policy think thank housed at New York University’s School of Law. She notes that state AI laws are likely on solid legal ground, adding that the administration lacks the power to directly take legal action against state measures.
In Connecticut, lawmakers supporting new regulations say that in the absence of federal leadership, it is up to states to help put boundaries on artificial intelligence technologies. “Based on past precedent, there will not be a national standard,” said Maroney, who joined Duff and other state lawmakers in signing a letter criticizing the president’s AI executive order last month. “We haven’t seen any federal laws between 1998 and last year.”
And as AI technology stands to see increased adoption in the near future, legislators say waiting any longer would be a mistake.
“By not addressing or regulating in some way, shape, or form artificial intelligence, we make the same mistake that we did 30 years ago, when we did not put any kind of regulation or boundaries around the internet,” Duff said. “That’s a mistake to our society, to our country.”
Though Gov. Ned Lamont’s proposed $200-per-person election-year rebate will dominate the political conversation, most of the $28.7 billion budget he released Wednesday will simply maintain a course he and legislators have already charted.
The governor’s blueprint for the fiscal year that starts July 1 preserves modest new funding in K-12 education and some increases in health care and social services.
But the plan, which would boost spending 4.4% beyond current levels, would break new ground with universal free school breakfast and new business tax relief for non-corporations while significantly scaling back a planned tax hike on hospitals.
It also would reduce General Fund assistance for public colleges and universities and slow growth in Connecticut’s transportation program. The administration warned in November that it would curb borrowing for highway, bridge and rail projects because of stagnant fuel tax receipts. But the plan also included free and discounted bus service proposals for veterans and students.
Lamont also called on lawmakers Wednesday to reform “earmarks,” funds for smaller projects within their home districts that sometimes lack the vetting that larger initiatives receive. That call for reform stems from an ongoing probe into more than $15 million in state grants channeled over the past five years to the Blue Hills Civic Association, largely at the direction of Sen. Doug McCrory, D-Hartford.
“Unlike many other states, which are facing federal cuts or a deficit of their own, Connecticut is stepping up to protect our most vulnerable, and we are trying to make life a little less expensive for working families and the middle class, who are getting slammed by higher costs,” Lamont said Wednesday in his budget address to lawmakers.
Lamont nudges CT’s fiscal guardrails to finance big tax rebate
A fiscal moderate, Lamont has been one of the chief defenders of a controversial series of budget caps that lawmakers created in 2017 to end a string of deficits and improve savings.
But he’s now seeking to tap some of that savings to return $500 million to taxpayers next year.
Lamont’s plan would direct $200 to individuals earning less than $200,000 per year and $400 to couples making less than $400,000.
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And though the rebate technically would be paid out of Connecticut’s sales tax receipts, which exceed $5 billion per year, the giveback would not force deep cuts to the state budget. The governor would replenish those lost dollars by temporarily adjusting one budget cap expected to save more than $1.2 billion next fiscal year.
Connecticut’s budget caps have generated huge surpluses averaging more than $1.8 billion per year since 2017. And while officials have used those surpluses to build reserves and reduce the state’s hefty pension debt, many of Lamont’s fellow Democrats in the legislature’s majority say those caps have pulled too many dollars from education, health care, municipal aid and other core programs.
Lawmakers from both parties also have their own ideas for big tax relief. And unlike the governor, they aren’t talking about a one-time payment.
House Republicans are pitching a major state income tax cut, worth $500 million annually, by boosting a credit that offsets a portion of a filer’s local property tax expenses from $300 to as much as $1,000. And many Democratic lawmakers and progressive groups support a $600-per-child income tax credit that would send $300 million to $400 million per year to poor and middle class families.
The Democratic governor’s message Wednesday: There’s only so much Connecticut can do at one time.
“Many of you over here want to add $500 million in tax cuts and over here $500 million in tax credits, leaving deficits in future years,” he told the General Assembly. “‘We’ll figure out how to pay for it later.’ Oh no, not again.”
House Speaker Matt Ritter, D-Hartford, offered a diplomatic response to Lamont’s warning.
“We’re glad that the conversation is about returning money to taxpayers, whether it be a credit or a rebate,” the speaker said. “What the number is, what the dollar values are, that’s a budget negotiation. But I’m glad he took the lead on it.”
But House Minority Leader Vincent J. Candelora, R-North Branford, said “this governor shouldn’t chastise anyone,” calling Lamont’s rebate “hollowing and gimmicky” and argued that people in an increasingly unaffordable Connecticut need ongoing relief.
Sen. Ryan Fazio of Greenwich, who is seeking the Republican gubernatorial nomination, said Lamont is relying on a one-time rebate to court voters but his budget is “without any long-term strategy to reduce energy costs, cut taxes or increase economic growth.”
But the tax rebate is not the only relief Lamont wants.
The administration proposed eliminating state occupational licensing fees for electricians, plumbers, sheet metal workers, HVAC technicians and educators. It also would end renewal fees for these positions and for health care staff, saving an estimated 160,000 workers a collective $15.9 million per year.
The governor also wants to expand existing research and development tax credits to various limited liability companies and other small businesses that don’t pay the corporation tax, saving them about $25 million annually.
The state would cap credits available annually under this program at $25 million, and no single company could claim more than $1 million in relief per year.
Former state Rep. Chris Davis, vice president of public policy for the Connecticut Business and Industry Association, said Lamont’s research and development tax credit proposal “is going to go a long way to help create jobs and economic growth here in the state.”
Scaling back a tax hike on hospitals
The governor also asked lawmakers Wednesday to eliminate most of a previously ordered tax hike on Connecticut’s hospitals.
The health care provider tax is a complicated levy that raises funds for the state. But it’s also a tool to leverage more Medicaid dollars from Washington, which Connecticut invests — along with its own resources — back in hospitals.
Lawmakers adopted a plan last June that asked hospitals to pay an extra $375 million annually, starting in 2026-27, with the state sending back an additional $140 million per year.
But hospital leaders balked, warning that the industry already loses money under this arrangement and saying the tax hike would push that imbalance to dangerous levels.
Hospitals sued Connecticut in 2015, arguing the provider tax was draining hundreds of millions annually from health care and violating federal Medicaid rules. The lawsuit was settled in 2019, and the state began making efforts to ease burdens placed on the industry.
Lamont now wants to reduce the new tax hike from $375 million to $100 million while preserving the earlier plan to boost payments to hospitals by $140 million annually.
“Connecticut hospitals already pay nearly a billion dollars each year in taxes while facing nearly $1.5 billion in annual losses due to Medicaid underpayment. Adding to the tax burden without meaningfully addressing this shortfall forces hospitals to make difficult choices,” Jennifer Jackson, CEO of the Connecticut Hospital Association, said Wednesday. “It threatens access to care and weakens the state’s health care safety net. When Medicaid underpayment isn’t addressed, costs shift to employers and families through higher premiums and out-of-pocket expenses. We urge state leaders to protect access, affordability and patient care — not balance the state budget on the backs of patients.”
Adding modest funds for K-12 schools, health care and social services
Connecticut lawmakers nearly a decade ago endorsed a plan to gradually increase the $2.4 billion Education Cost Sharing program, the state’s chief operating grant for K-12 school districts. And the governor’s plan maintains a $95 million increase for ECS that lawmakers began this fiscal year.
His plan also maintains increases ordered in each of the past two years for special education programs, as well as a new $10 million grant he and lawmakers had been planning for the 2026-27 fiscal year to encourage districts to find innovative new approaches to special ed.
Lamont also repeated his proposal from last year for $12 million to establish universal free breakfast in Connecticut schools.
The governor and lawmakers also agreed last June to boost long-neglected Medicaid rates for physicians and other care providers who treat the poor, though the effort was modest.
They added $15 million this fiscal year to bolster payments, and that investment was slated to climb to $45 million in 2026-27. The governor’s new proposal maintains that effort.
But that is far shy of the $300 million boost legislative leaders have said is needed to upgrade rates that previously hadn’t been adjusted since 2007.
Similarly, the community-based nonprofits that deliver most state-sponsored social services to people with disabilities and patients struggling with mental illness and addiction say they lose hundreds of millions annually under state payment schedules that haven’t kept pace with inflation for decades.
Lamont’s new budget preserves an earlier deal to boost spending in 2026-27 by about $150 million over current levels.
But Connecticut’s Working Families Party chastised Lamont Wednesday, saying his new budget proposal doesn’t invest nearly enough in core services.
“Connecticut families are still reeling from the unprecedented cuts from the federal government, and now state leaders have a ‘common sense’ choice to make,” said State Director Sarah Ganong. “Will we make the wealthiest people in Connecticut pay their fair share to help fund public schools, health care and public transit? Or will our elected leaders let nurses, teachers and all working people continue to pay more of their income in taxes than millionaires, even as they struggle to afford rent and groceries?”
Tightening spending on higher ed, slowing growth for transportation
General Fund operating support for the public colleges and universities would shrink modestly under the governor’s plan.
The administration and many legislators called for cutbacks last year amid reports that the Connecticut State Colleges and Universities system had amassed reserves exceeding $600 million, equal to roughly half its annual budget at the time.
The University of Connecticut’s main campus in Storrs and its regional campuses began last fiscal year with about $170 million in reserves, a more modest 10.2% of its operating budget. UConn’s Farmington-based health center held $297 million, which represented 18% of its $1.65 billion annual operating expense at that time.
Meanwhile, the Special Transportation Fund, which represents about 10% of the overall state budget, would grow more modestly than originally planned under Lamont’s latest proposal.
The governor would boost the STF by $114 million next fiscal year, pushing it to nearly $2.4 billion. But that’s still $12 million less in growth than he and the legislature originally endorsed in an earlier draft of 2026-27 finances approved last June.
Lamont, who tried unsuccessfully to convince legislators in 2019 and 2020 to approve electronic tolling on state highways, warned in November that Connecticut might need to curb borrowing for highway, bridge and rail repairs.
The Special Transportation Fund pays off the principal and interest on the infrastructure rebuilding program while subsidizing public transit costs and operating expenses for the departments of Transportation and Motor Vehicles.
Connecticut, which finances most of its transportation construction work by selling bonds on Wall Street, has issued $1.3 billion this fiscal year, according to the state treasurer’s office.
Lamont’s budget staff projected in November, though, that transportation bond sales would drop to $1.2 billion next fiscal year, $1.1 billion in 2027-28 and remain there through 2030.
Despite those challenges, the governor’s new budget proposes dedicating $3.5 million within the Special Transportation Fund to give students a 50% discount next fiscal year on transit buses, while veterans would ride for free.
Other elements of the governor’s new budget proposal include several investments to assist job growth, including $1.6 million for a pilot program in eastern Connecticut that splits child care expenses equally between workers, employers and the state.
The governor’s plan also includes $1.5 million to boost adult technical education and workforce development programs and $730,000 to bolster employment of workers with disabilities.
HARTFORD, Conn. (WTNH) — Gov. Ned Lamont announced Friday he will run for a third term in office, capping years of speculation surrounding the governor’s intentions for reelection.
“Susan and I are ready to go, absolutely,” Lamont said during an event about affordable housing, referring to Lt. Gov. Susan Bysiewicz. “We’ll have more details on that next week. I didn’t want you to have to ask me that any longer.”
Lamont’s candidate registration form was filed with the State Elections Enforcement Commission on Friday afternoon.
In July, Josh Elliott, a Democratic state representative for the 88th District of Hamden, announced his run for governor.
“We are in a moment where the perma-crisis manufactured by Donald Trump requires leadership from a governor who knows the stakes and will not compromise in the face of rising authoritarianism,” Elliott said. “That’s never been Ned Lamont.”
“Governor Lamont’s first eight years in office have seen Connecticut’s electricity rates rise to the third highest in the nation, and our economic growth plummet to fourth worst in the country,” Fazio said. “Families are struggling to make ends meet, while people and jobs are leaving our state. The results speak for themselves; two terms are more than enough. I am running for Governor to make our state more affordable, safe and create opportunities for all.”
When the Labor Day weekend of 2026 signals the traditional start of the fall political season, the race for governor will become clear. But a full year away, that race is already taking shape.
While Gov. Ned Lamont currently says he’s still pondering a third, four-year term, political observers say he’ll certainly run again. They say that his engagement and energy, with daily public events organized by his office, such as ceremonial bill signings for legislation actually signed weeks earlier, are sure indicators. Lamont has signaled as much.
“If Lamont were to run, it’s his election to lose because of the power of the incumbency,” said Gayle Alberda, political science professor at Fairfield University. “The perks are his achievements and record. He has a built-in infrastructure, credibility and prestige, plus high levels of name recognition before even engaging again with voters.”
“Everything is lined up for him for a third term,” said Gary L. Rose, a scholar in-residence at Sacred Heart University.
Recently returned from his summer home on a Maine island that’s been a family property since 1917, a reporter tried to finally get a straight answer. “You’ve been off two weeks, you gonna tell us something now?” the reporter asked in New London last week.
“Nope,” Lamont replied. “Soon. I think we’re making good progress in this state, and I love what we’re doing. I’m inclined to do it, but I’m just trying to put it off a little bit longer.”
One of the top-six governors in approval ratings, according to a recent nationwide poll, Lamont has a big advantage over state Rep. Josh Elliott of Hamden, who is challenging the governor from the left. Elliott is hoping to capture the kind of political lightning in a bottle that Lamont himself grabbed in 2006: a primary victory over then-U.S. Senate Joe Lieberman, who went on that fall to keep his seat, running as an independent.
On the Republican side, the outgoing Westport First Selectwoman Jennifer Tooker, Timothy Wilcox of Norwich and fourth-year state Sen. Ryan Fazio have declared their candidacies. Outgoing New Britain Mayor Erin Stewart is also expected to join the fray, eventually turning her exploratory campaign into a candidate committee.
Republican State Central Committee Chairman Ben Proto said that the state’s public financing system should make the eventual GOP nominee competitive with Lamont, a multi-millionaire who does not take a state salary and paid for his 2018 and 2022 campaigns – more than $40 million – from his own pocket. In 2022, he claimed $54 million in income, mostly from investments.
“This is a guy who makes a million dollars a week if he doesn’t get out of bed,” Proto said of the governor. Any general election expenditures over $15 million per candidates is probably not needed, he said. “At some point you reach a diminishing return on the amount of money you spend. You get to run a few more ads.”
Statewide voter registration includes 488,041 Republicans, 822,499 Democrats and 957,782 unaffiliated voters.
How the race, especially on the Republican side, is anyone’s guess. A spring GOP convention would lead to an endorsement, but it’s possible a summer primary could follow. Two years ago, despite former state House Minority Leader Themis Klarides winning the nomination to run for U.S. Senate against Democratic Sen. Richard Blumenthal, Leora Levy defeated her in a primary following an endorsement phone call from Donald Trump.
Touting an in-house poll that shows Stewart within striking distance of Lamont, Morgan Wilson, senior advisor to Stewart’s exploratory committee, recently said that the survey of 400 GOP voters indicate support for a nominee “from outside Fairfield County with a proven history” of winning elections.
“It’s time for a new generation of proven leadership, not one defined by personal finances or Hartford insider ties,” Wilson said in a statement.
Fazio, in a Friday statement, said that during the two weeks he’s been on the campaign trail, he’s gotten positive feedback. “One thing is clear: Connecticut voters are ready for positive change,” he said. “They’re ready for lower electric bills, lower taxes, and law and order – that’s the exact message we are bringing across our state.”
Rose, a longtime SHU politics professor, said that the poll released by the Stewart campaign occurred within days of Fazio jumping into the campaign. “I don’t doubt that she’s the leading Republican, but Ryan has a good chance of closing the gap, particularly among conservative Republicans,” said Rose.
“Those August primaries have low turnouts,” Rose said. “Any poll showing she’s ahead is very premature. Ryan is definitely right of center and I think he’s a viable candidate, particularly among conservatives. Erin has a reputation of working across the aisle, but I am not sure if that’s what conservatives want at this moment.”
Nearly four years ago, Lamont waited until the second week of November to announce plans to run for a second term. He recently hosted several of the state’s big-city mayors at the Governor’s Residence in Hartford. But after seven years in office, progressive Democrats in the legislature are eager for higher taxes on the state’s wealthiest to fund social programs at a time when they – and other federal funding streams – are being threatened by the Trump administration.
Rose said Friday that when Luke Bronin, the former Hartford mayor, recently announced a potential primary challenge to 1st District U.S. Rep. John Larson, it was a solid tip that Lamont was running for a third term.
“I think in Lamont’s case, he’s very popular, his approval ratings are strong” Rose said. “Obviously he has a war chest that’s a bottomless pit. Plus, there’s a bipartisan chord he has struck with the public. A number of Republicans in the business community appreciate him. He’s not ideological. He’s a centrist. He can certainly talk about the state budget surpluses.”
“Even though the laws are enacted by the General Assembly, the governor is the person we blame or reward,” said Alberda, of Fairfield University. Pitfalls for incumbents include economic down turns and large scandals. In 2004, then-Gov. John Rowland resigned under pressure, when the state Supreme Court ruled that he had to testify before a state House Committee of Inquiry that looked into the awarding of lucrative state contracts and tax breaks. He wasn’t halfway through his third term. By the end of that year, Rowland pleaded guilty to federal felonies. He was recently pardoned by Trump.
While Lamont’s signature bill this year might be the $300 million child case endowment fund, his veto of a controversial affordable housing bill that his staff helped negotiate with legislative leaders, earned Lamont some animosity and it seems less likely that a special legislative session will be called on the issue for September.
Without an early fall housing initiative with fellow Democrats, Lamont could further delay announcing a reelection campaign until the tension subsides.
Elliott on Friday chided Lamont for not joining most Democratic governors who signed a Thursday letter sent to Trump, asking that he back away from possibly sending National Guard troops into their states.
“There are two trains of thought, generally about dealing with the fed government right now,” Elliott said in a phone interview. “You don’t get caught in the president’s cross hairs or you everything fight tooth and nail. Both sides come at this from trying to protect our people. With three-and-a-half years left in his term, if we do not fight, we will not be OK. The worst thing we can do is try to weather the storms.”
HARTFORD — On the last day of the legislative session, state lawmakers Wednesday approved capital projects totaling about $6.6 billion for the two-year budget that starts July 1. That bill includes long-term bonding for lowering state energy bills, financing billions in school construction projects and expanding security measures for houses of worship.
The 256-page bond bill passed 144-4 in the House of Representatives and 35-1 in the Senate. Although the bill authorizes the spending, projects and agencies would still face scrutiny from the Office of Policy and Management before funding is authorized by the State Bond Commission, which is controlled by the governor.
Buried in the package are revisions to the state budget bill that passed the House and Senate on Tuesday. One Republican senator railed at the errors that needed correction in the bond act and chastised Democrats for using the package to skirt further debate on several issues.
The bond act includes a variety of legislative initiatives that failed to win approval elsewhere in the hundreds of bills that passed the House and Senate, including new requirements that people who bring more than 2,500 empty cans and bottles to redemption centers would have to present identification, including their residential addresses, in attempt to cut down on fraud from other states that have five-cent deposits.
Taxes, fees going up in $14.3 billion RI budget as federal relief wanesUnmute
“We’re trying to crack down on that,” said Rep. Maria Horn, D-Salisbury, co-chairwoman of the Finance, Revenue and Bonding Committee. “We see a lot of trucks – according to anecdotal evidence – from out of state. That’s really a truck full of bottles. We are also providing resources for State Police to assist in that.”
“This package confirms our commitment to special education, clean water, aging in place for our older adults, childcare expansion, school repairs, school and nonprofit security, affordable housing, new home ownership, community colleges, brown field remediation, work force development and a host of other ideas and initiatives,” said state Sen. Patricia Billie Miller, D-Stamford, co-chairwoman of the bonding subcommittee.
Sens. Derek Slap, D-West Hartford and Ryan Fazio, R-Greenwich, said continued commitments to security at at synagogues is important. “Nobody should be afraid to pray and nobody should be afraid to worship at a place that is holy and special to them,” Slap said during the late-afternoon Senate debate. He noted that dozens of applications have been filed for the support and not all have received money. “Oftentimes on Saturday I will drive down Albany Avenue in West Hartford where there’re many different synagogues and every single one of them, there is an armed guard outside. It’s awful that this is something that’s needed.”
“It is vital that we prioritize, first and foremost, the safety of our residents, especially our Jewish residents who are currently facing the threat of increased anti-semitic attacks,” Fazio said. The bond act includes $10 million a year for increased school security and $5 million a year for non-profits including religious institutions.
Tribe expansion and Capitol improvements
Another provision indicates that the state would challenge attempts by any of the state’s Indigenous tribes if they attempted to acquire more land. “The conversion shall be deemed contrary to the interest of the state and its residents,” the bill said. CT Insider has reported that the U.S. Department of the Interior is reconsidering earlier, failed efforts by state-recognized tribes to finally gain federal recognition.
In another section, a deadline of January, 2026 is set to identify and possibly commission additional statues to be added to the exterior of the State Capitol building “that reflect the diversity, character and accomplishments of the state.”
The bond act, which culminates the state budgeting process includes grants for towns and cities, based on their size, to add to their local budgets. The amounts range from $2,620 for the town of Andover to $13.5 million for Bridgeport, $15 million for Danbury, $10.4 million for Norwalk, $10.2 million for New Haven and $9.9 million for Waterbury.
It also includes a $40 million increase in the current $50 million program for cleaning up old, contaminated industrial sites, said Sen. Ronald Napoli Jr., D-Waterbury, co-chairman of the bonding subcommittee of the Finance Committee. Napoli said that the funding would be distributed based on a formula and individual grants.
Lawmakers on both sides of the aisle commended the bill’s funding to continue security efforts at religious institutions, particularly synagogues that have been targets for extremists.
More funding will be available for the state’s aging-in-place programs. Converting abandoned retails strips and malls would also see bonding support in a new “Greyfield program” with $50 million for public-private partnerships run by the Department of Economic and Community Development.
“As the retail mall industry continues to decline nationwide many of our cities and towns are left with large, vacant, grey structures,” Napoli said. He said that the annual aid for town and city roads, has been increased by 30 percent.
Veteran state Rep. John Piscopo of Thomaston, a ranking Republican on the bonding subcommittee, said that after years of federal pandemic funding, the state has to cut back. “The ARPA funds during Covid, was money flying in from out of the sky for a lot of our agencies,” Piscopo said. “A few agencies grew their bureaucracy with that money. As that money dried up, we were worried that all the shortfalls were coming to the bonding subcommittee.”
He said that while the rule of government finance is not to bond for ongoing expenses, there are some instances of such tactics in the bond act.
“My idea about bonding is this,” Piscopo said. “If your town got hit by a flood and saw damage and your town doesn’t have the means to mitigate the damage, you can ask the citizens of the state of Connecticut to help.”
Other items include $75 million for information technology; $5 million for state-wide flood and resiliency mapping; $20 million for the Department of Veterans Affairs to fund renovations and improvements, plus $7.5 million to expand the State Veterans Cemetery in Middletown; and a $40 million program to install solar photovoltaic systems on state property.
The bonding legislation repeals a provision of the state budget bill that reduced the annual interest on municipal tax liens that are sold to debt collectors. The change would have reduced the annual rate from 18% to 12%. But the interest rate would have remained 18% year for liens that were not sold to a third party. In addition, the repealed section would have capped attorney’s fees in connection with each aspect of a foreclosure, sale, or other disposition of these liens.
While Bridgeport lawmakers in recent days attempted to include $100 million to help develop a site anchored by a downtown soccer field, the bond act orders the Department of Economic and Community Development and the Department of Revenue Services to assess the anticipated economic impact of the proposed Connecticut United Football Club stadium, including its economic impact and create a report on the issue by October 1. One of the issues on the development would be “when it is reasonably likely that the state may receive a return on a one hundred twenty-seven million dollar state bonding investment, taking into consideration revenue generated from such proposed stadium via payroll taxes, sales and use taxes and other revenue sources.”
Amendments to previous day’s budget bill
The day after the state budget was approved in the House and Senate, the bonding act would also affect provisions in the previous day’s budget documents.
Conservative state Sen. Rob Sampson, R-Wolcott, focused on a rewritten section involving the price that could be paid for out-of-state fabricating. He noted that it could have cost the state millions of dollars in construction costs, but legislative leaders noticed it and changed it in the bond act.
“This section was a stand alone bill that could have developed a heated and lengthy debate,” Sampson said. “Everyone knows this is a highly contentious issue. The issue is, that this was passed yesterday, as part of the budget, circumventing the minority as I mentioned, but they discovered they made a mistake. They made a mistake by leaving out a word, a word that would have effectively required the state Department of Transportation to end up paying prevailing wage for countless different items in the projects that they perform. That might, in fact result in millions of dollars in additional costs.”
The bonding bill modifies provisions related to the development of the South Meadows section of Hartford. It requires the state to include the site in the basis for state payments to Hartford until the site is redeveloped and removes a provision specifying that none of the provisions apply to the Hartford Brainard Airport. It also specifies that the newly established South Meadows Development District’s powers or actions do not supersede, or authorize any conflict with, federal law or any federal aviation regulation concerning control of Hartford Brainard Airport.
Another section overturns a provision of the budget bill that reduced the annual interest on municipal tax liens that are sold to debt collectors. The change would have reduced the annual rate from 18 percent to 12 percent, which lawmakers have tried and failed to reduce in recent years. In addition, the repealed section would have capped attorney’s fees in connection with each aspect of a foreclosure, sale, or other disposition of these liens.
The bonding bill also repeals a portion of the budget bill that would have created a working group to oversee and monitor expenditures from each reserve fund of the Connecticut State Colleges and Universities system or the higher education institutions within CSCU.
The bond act delays the effective date of a new property tax exemption for property located on reservation land that is held in trust for a federally recognized Indian tribe by one year to Oct. 1, 2026.
The bonding bill repeals a provision in the budget bill that eliminated both the $150 application fee and $155 annual renewal fee for a paramedic license. Instead, the bonding bill eliminates the $150 application fee but retains the $155 renewal fee for the license.
Lamont’s surprise visits
It’s a semi-tradition for governor’s to address joint gatherings of the House and Senate at the end of the session. This year, Gov. Ned Lamont decided to pay informal visits to first the House and then the Senate, during a quick 45-minute jaunt through the State Capitol. Upon entering the bustling House chamber shortly after 8, Speaker Matt Ritter suggested that Lamont was available for members to detail their grievances.
State Rep. Bill Buckbee, R-New Milford, offered the governor some candy. “We’ve got a budget that I think most of us are proud of, and even if you didn’t support it, proud of the process we went through,” Lamont told reporters. “We did it with good humor with each other. We’re not Washington, we’re Connecticut.”
On the two-year $55.8 billion state budget:
“At the end of the day look at what we did on child care, look what we did on special ed, look at what we did to make a big difference for our towns and cities for years to come.”
Why visit legislative chambers instead of giving a speech?
“Ah, midnight is too late for them and it is much too late for me, and everybody seemed to love that idea.”
Overall thoughts on the session:
“I think it was pretty good. We’re on time. We have a balanced budget. Compare that to 2017, before I got here. We’re making some strategic investments that I think will make a long term difference. We’re not raising taxes, at least on individuals.”
Connecticut ratepayers are paying slightly more than $1 billion per year in public benefits charges for government mandates and programs through their electric bills, a figure that has escalated rapidly in recent years, according to testimony by both Eversource and United Illuminating before the Finance, Revenue, and Bonding Committee.
That testimony on April 16 was somewhat lost in reports about an exchange between Sen. John Fonfara, D-Hartford, co-chair of the Finance Committee, and Sen. Norm Needleman, D-Essex, co-chair of the Energy and Technology Committee. Fonfara proposed a bill that would essentially remove the public benefits charge from electric bills for several years and authorize a “Green Bond” for up to $800 million annually to continue funding the programs covered under the public benefits charge.
According to legislative testimony, however, even at $800 million per year, the bond fund would not cover the entirety of what Connecticut ratepayers are currently required to pay. Vice President of Distribution Rates and Regulatory Requirements for Eversource Doug Horton testified before the committee that Eversource customers currently cover $800 million per year in public benefits, an increase from $450 million per year just five years ago.
Meanwhile, United Illuminating testified in writing that their customers currently pay roughly $250 million per year in public benefits charges, bringing the total cost to ratepayers to more than $1 billion per year.
Those benefits include government mandated energy procurement requirements for solar energy which, at this point, add up to $380 million per year for Eversource customers, eclipsing the $350 million per year the company spends maintaining and upgrading the electric grid. Horton said that while electric sales remain roughly the same as they were 24 years ago thanks to energy efficiency programs, overall spending has gone up.
“These outcomes aren’t coming for free,” Horton said. “These funds have generated meaningful results in curbing electricity consumption and producing benefits on the macro scale but to realize those benefits come at a cost and come through the public benefits charge on a customer’s energy bill.”
That includes $160 million per year in conservation load management spending, $130 million per year for net metering for solar, and an additional $70 million for “behind the meter” distribution subsidies, mostly for solar energy, Horton said.
Connecticut’s public benefits charges account for about 57 different programs that range from subsidies and rebates for electric vehicles and new technologies, to procuring energy from particular sources like the Millstone nuclear plant and paying for hardship costs and low-income discounts for customers who can’t pay their bill.
Connecticut is usually among the top two or three states in the country when it comes to the cost of electricity, driven in part by supply constraints and the public benefits charges. While lawmakers and Gov. Ned Lamont often point to Connecticut being on the tail end of the national energy pipeline, Connecticut’s electricity costs are still higher than its New England neighbors.
The high cost has a cascading effect, according to Eversource officials, as those who can’t afford to pay their bill are covered by those who can, or they switch to solar for their homes, thus driving up the public benefits charges for everyone, including those who can’t afford their bill to begin with.
“We have seen in Connecticut the past-due balances of unpaid bills triple in the last five years,” said Jess Cain, vice president of customer operations and assistance programs for Eversource, who said unpaid balances grew from $100 million per year, peaked at $350 million, and has come down to $200 million since Eversource began collections again following the COVID pause.
“The public benefits charge… is regressive,” Cain said. “They don’t vary based on income.”
Both Eversource and United Illuminating were testifying in support of a bill put forward by Fonfara and backed by a bipartisan group of lawmakers that would move the public benefit charges to a state bond and more closely manage the procurement of energy supply.
The public benefits charge, which was recently broken out on customer’s bills to make them more visible, became a political hot potato in the summer of 2024 after the Public Utilities Regulatory Authority allowed those benefit costs to build up over four years, citing COVID hardships.
The resulting rate increase angered the public and politicians and put PURA and its chairman Marissa Gillett under the spotlight as Connecticut’s major utility companies began to push back on the regulator for cutting their rate requests and ultimately lowering their credit rating. The blowback threatened Gillett’s reappointment to PURA, and reportedly necessitated a backroom deal between the Lamont administration and majority Democrats to make PURA a quasi-public agency and give Fonfara a seat on it.
While the bill appeared to have support among lawmakers and the utility companies, there were many opposed to the legislation, claiming it will gut the state’s push toward green energy like solar.
Mike Trahan, executive director of the Connecticut Solar & Storage Association, said the bill would essentially alter net metering to make it less attractive for homeowners to install solar panels and argued that it was a “myth” that “the tiny fraction of Connecticut property owners who use solar to make their electric power are somehow shifting costs to the other million plus electric customers who do not.”
“This will be a crushing blow to solar in this state,” Trahan said, noting that there is only 4 percent solar penetration in Connecticut, compared to 30 percent in some other states.
“People talk today that we’re trying to kill the solar industry, we’re not trying to do that whatsoever,” Fonfara said. “The reality is solar is eating away at [company] revenue and we have to have revenue supplement, if we’re going to continue down this path, more revenue that will outpace costs. That’s how we’ll reduce rates.”
Fonfara’s energy bill was passed out of the Finance Committee and was transferred to the Energy and Technology Committee where Needleman serves as co-chair alongside Rep. Jonathan Steinberg, D-Westport.” Needleman was skeptical of the bill and questioned whether Eversource had written it during the public hearing, leading to a tense exchange. Needleman questioned several aspects of the bill before being cut off for time limitations.
“All I will say is I hope this bill will come to our committee where it belongs and we will have a robust conversation about this,” Needleman said. “But this is not the way to solve these problems and let me say we all care about electric rates. This is not the way to solve it, nor is it procedurally right and the senator to my right knows that.”
Connecticut customers could be caught in the middle of a trade war by tariffs on Canadian electricity at a time when many consumers are already struggling to pay their electric bills.
U.S. Sen. Richard Blumenthal is trying to block 10% tariffs that have been put on hold temporarily by President Donald J. Trump as the fierce debate on tariffs rocks the stock market, driving equity prices down sharply on all the major indexes.
“Connecticut is about to be hit by a tsunami of skyrocketing prices as a result of the absolutely horrendous tariffs that Donald Trump is imposing on Canadian imports,” Blumenthal told reporters Monday outside the state Capitol in Hartford. “It is paid by consumers. Donald Trump says it’s paid by the exporters in Canada. No, it’s paid by consumers because it is added to the price of electricity coming into this country. We’re saying, ‘No, Mr. President, Connecticut electricity consumers want to avoid that additional cost.’ ”
No legal cases have been filed for a temporary restraining order because the tariffs have not yet been imposed, Blumenthal said.
The issue is important because hydro-electric power from Canada constitutes about 11% of New England’s power supply, officials said. The average kilowatt per hour price is 28 cents in Connecticut, compared to about 16 cents nationally.
Based on the level of the tariffs, gasoline prices could increase by 20 to 30 cents per gallon, Blumenthal said.
Since New England is more dependent on Canadian electricity than other parts of the country, Connecticut customers could be disproportionately impacted.
“This tariff is going to hit blue states in New England, but it will hit Republicans and Democrats as well” in their homes, Blumenthal said.
With multiple complications in the deregulated electricity world, officials say it is unclear exactly how the tariffs would be regulated and overseen by the nonprofit ISO New England, the independent system operator that oversees the wholesale market, and the Federal Energy Regulatory Commission, known as FERC.
“It’s not clear how ISO New England would impose a tariff because it’s never been done before,” Blumenthal said. “How do you collect a tariff on electricity? Nobody knows.”
Separately, multiple news reports said Monday that the government of Ontario had imposed a 25% tariff on the northern states of New York, Minnesota and Michigan in the ongoing trade ward. The surcharge would reach 1.5 million residential and business customers in the three states.
Ongoing clash
The potential price war is set against a backdrop of falling stock market prices and an ongoing battle at the state Capitol over electricity prices.
Senate Republican leader Stephen Harding of Brookfield said the quickest way to lower prices is to remove the “public benefits” charges from customers’ electric bills and instead make them part of the $26 billion annual state budget. Both Gov. Ned Lamont and Democrats have balked at that idea.
“While the concern over tariffs is bipartisan, the only solutions to lowering electricity costs here at the state Capitol are coming from Republicans,” Harding said. “Republicans want to get rid of the hidden ‘public benefits’ tax on our bills. Republicans have repeatedly offered detailed plans. Democrats who control the state Capitol do nothing about it. They won’t even try, but we hope Sen. Blumenthal will support our effort.”
Legislators are still battling over the future of the Public Utilities Regulatory Authority, known as PURA, and its embattled chairman, Marissa Paslick Gillett. While Gillett has been approved at the committee level for another term as chairman, she still needs approval from the full State House of Representatives and Senate. Gillett’s approval was part of a package deal to expand PURA to five members, up from the current three, and add former state Rep. Holly Cheeseman of East Lyme and state Sen. John Fonfara of Hartford to the newly expanded five-member board. Their nominations are still pending.
Connecticut consumer counsel Claire E. Coleman agreed with Blumenthal, saying the tariffs need to be postponed and blocked.
“We are working very hard in this state to bring energy costs down … we know one thing for certain, and this will not help bring costs down,” Coleman told reporters. “There are a lot of questions about the implementation of this. We are hoping that the rule of law will prevail and that electricity will not get the same tariff as goods and services and commodities. … Consumers should not bear the brunt of these tariffs, and that’s what will happen if they’re imposed.”
According to the United States Department of Agriculture (USDA) food prices are expected to increase by 2.2% in 2025.
This year’s predicted increase is similar to the 2.3% increase consumers saw in 2024, but a drop from 2023 which saw an increase of 5.8%, according to the USDA.
“Over the last few years, that amount of money that has been pumped into the economy has gone up,” said University of New Haven Associate Professor of Economics and Business Analytics Patrick Gourley. “Then people have additional money, and they spend it, and that results in higher prices.”
CT Food Association President Wayne Pesce says several factors play a role in the increase of food, including the bird flu outbreak, inflation and natural disasters.
“There’s a confluence of events that are driving the cost of food higher,” Pesce said. “That’s in restaurants and grocery stores.”
Shoppers saw an 8.4% increase in retail egg prices according to the USDA. This comes after a nationwide outbreak of the bird flu in poultry and dairy cows, according to the CDC.
“Fortunately for consumers, that will work itself out once the flocks come back,” said Pesce.
With a new year beginning, there are a handful of state laws changing things up in Connecticut.
New laws in effect on Jan. 1 tackle labor issues, including phasing-in mandatory paid sick days to more people. There’s also a new law going into effect surrounding elections, including absentee ballot security. And, greater protections are going into effect for home health care workers, along with changes to the state’s minimum wage. Here’s more on some of the new policies going into effect in January 2025.
