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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 launch multiple 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.” 

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. 

The executive order arrived months after a previous effort to curtail state AI efforts failed in Congress, with lawmakers removing a proposed ten year moratorium on state AI regulations from an earlier version of the president’s One Big Beautiful Bill Act over the summer. 

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.” 

Original article found on CT Mirror.

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.

 More STORIES in Politics

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.

Original article found on CT Mirror

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.”

Republican State. Sen. Ryan Fazio declared himself a candidate for governor in next year’s election.

“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.”

Erin Stewart, the mayor of New Britain, is actively exploring a run for governor.

Connecticut has no term limits on its highest office.

Original article found on WTNH