If you thought Connecticut’s fiscal guardrails were safe, think again.
At a post-session town hall in West Hartford on July 8, local Democratic legislators made it abundantly clear that come September’s rumored special session, one of their top priorities is to bust open the very budget constraints that helped rescue the state from fiscal chaos.
This past legislative session, Gov. Ned Lamont and Democratic lawmakers already weakened the state’s fiscal guardrails — protections meant to prevent reckless tax-and-spend policies.
These “guardrails,” enacted on a bipartisan basis in 2017 to restore budget discipline, weren’t just theoretical constraints — they were working. But in 2025, faced with record surpluses and mounting political pressure to spend more, lawmakers decided to loosen those very rules.
The final budget deal made three significant changes.
First, it increased the amount of volatile revenue — such as capital gains and investment income — that can be spent rather than deposited into the Rainy Day Fund, undermining the effectiveness of the Volatility Cap. Second, it altered the cap on year-over-year spending growth, giving lawmakers more freedom to grow the size of government. And third, it redirected surplus dollars that would have gone toward paying down pension debt, using them instead to fund new programs and expand existing ones.
The gathering featured State Sen. Derek Slap and Reps. Jillian Gilchrist, Kate Farrar, Tammy Exum (all D-West Hartford), and Bobby Gibson (D-Bloomfield). The message was clear: the federal government is cutting back, so Connecticut must spend more — even if it means raiding the Rainy Day Fund and further dismantling the fiscal guardrails.
Rep. Gilchrist was blunt, saying, “We really do need to adjust the fiscal guardrails.” According to her, Connecticut’s Rainy Day Fund might be the only thing standing between families and destitution. She invoked a bizarre metaphor, asking, “Are we in a rainstorm? It feels like we are.”
She didn’t stop there. Gilchrist admitted, “What I’m frustrated by, I don’t think we went far enough to adjust the fiscal guardrails in the state of Connecticut.”
While she acknowledged that lawmakers “did move on the volatility cap,” her “big disappointment” was the failure to make “a significant investment in Medicaid.” Her plan? “In a special session, and going into next session, we will actually invest a significant amount of money in that program.”
Rep. Farrar took the opportunity to suggest that “even a small” tax hike on the wealthy could generate “hundreds of millions” in new revenue — this, despite Connecticut already ranking among the top states people are fleeing due to taxes and cost of living. She even hinted that the September special session could be a vehicle for tax hikes, saying the state must consider “additional reasonable and common-sense revenues.”
She pointed to Connecticut’s “upside down” tax code and argued that “by actually increasing the taxes by even a small amount on the wealthiest in our state, we could raise hundreds of millions of more dollars and even… still have a lower tax rate than all of our surrounding states.”
Not holding back on the doom and gloom, Rep. Farrar asked, “Are we simply going to let… many of these federal cuts be and let folks lose their health insurance, let children go hungry? Who are we going to be?” And while she acknowledged the $5 billion Rainy Day Fund, she dismissed it as inadequate and warned that “it’s going to require us to look closely at how we can meaningfully bring in revenue.”
Meanwhile, Rep. Exum joined the chorus stating, “We have to look at our current spending and our opportunities around the fiscal guardrails.”
It’s not just rhetoric. Lawmakers are laying the groundwork to permanently increase spending, treating Connecticut’s most important fiscal protections as an inconvenience.
Rep. Gilchrist admitted her “big disappointment” this past session was not pumping more money into Medicaid — and she’s determined to fix that in September. No talk of structural reform. No mention of outcomes. Just more spending.
They posit that since the state faces potential cuts from Washington in areas like education and Medicaid, Connecticut should preemptively throw open the budgetary floodgates. Apparently, the $55.8 billion biennial budget isn’t big enough. Sen. Slap, however, attempted to strike a more moderate tone, but he too ultimately backed calls to “backfill” lost federal funds. He noted that while some of the federal cuts won’t kick in for years, the legislature needs to act now.
Yet this comes across as manufacturing a crisis rather than addressing Connecticut’s real affordability and government spending issues.
In fairness, Slap did make one useful point that over 60% of single-family homes in Connecticut are zoned for one-acre minimums, which restricts housing supply. But he quickly pivoted to the party line, framing housing as yet another crisis that demands top-down mandates from Hartford — and, of course, more money.
Which brings us to the governor’s veto of H.B. 5002, a controversial housing bill that would have pressured towns to build more high-density housing near transit. Rep. Farrar described the veto as a “very big disappointment” and said she hoped for continued conversation around housing. While she didn’t mention a timeline, there are already talks outside the legislature about bringing it back in a September special session.
To their credit, the West Hartford delegation was transparent about their goals of unmitigated spending, Medicaid expansions, and housing mandates. There was no sugarcoating. Rep. Farrar openly called for increasing taxes; Rep. Gilchrist wants to gut the spending cap; and Rep. Exum has demanded both. Meanwhile, Rep. Slap has offered his support for child tax credits, more nonprofit subsidies, and higher-ed expansions.
If there was one unifying theme to the evening, it was this: your state government wants to spend more, tax more, and regulate more — and it wants to do so without the pesky interference of fiscal limits that were designed to protect taxpayers in the first place.
In short, September’s special session is shaping up to be a fiscal demolition derby. Voters who thought the 2017 bipartisan fiscal guardrails would protect Connecticut from runaway spending may want to pay close attention.
