Connecticut’s budget surplus presents a critical choice: use the one-time windfall to address the state’s deep-rooted financial problems or spend it on new, permanent government programs. Progressive activists are pushing for the latter, urging lawmakers to create an “emergency safeguard account” to divert these funds. This proposal, however, risks undoing years of fiscal progress and locking the state into unsustainable spending.
The Connecticut Project (TCP), a well-funded progressive nonprofit, is advocating for a special legislative session to fund a new “emergency safeguard account” with surplus dollars. Their argument is that this account will protect vulnerable residents from potential federal budget cuts to programs like SNAP and HUSKY. While this may sound noble, the plan has a critical flaw: it would bypass Connecticut’s existing fiscal guardrails.
Under current state law, the Budget Reserve Fund (BRF) is capped at 18% of net General Fund appropriations. Once that ceiling is reached, any extra surplus must go directly toward reducing unfunded pension liabilities. This guardrail ensures one-time windfalls aren’t converted into ongoing spending commitments.
The pitch sounds noble — protect vulnerable residents from changes to federal programs like SNAP and HUSKY — but the fine print tells a different story. This isn’t about short-term relief; it’s about locking the state into a permanent expansion of government obligations based on a temporary surplus.
A History of Concerns
The “safeguard account” first appeared last session in a Senate Democrat priority healthcare omnibus bill.
During the May 22 Senate debate, proponent Sen. Saud Anwar (D-South Windsor) described it as a way “to address the unexpected shortfalls in public health funding and ensuring that the Department of Public Health would have some funds.”
The bill authorizes DPH to spend the fund on “unexpected shortfalls” and “continuity of essential public health services.” — putting bureaucrats, not elected officials, in charge of how surplus dollars are used.
This is why senators Heather Somers (R-Groton) and Jeff Gordon (R) raised serious red flags, questioning the need for the account, the lack of a clear fiscal note, and the absence of a defined process for oversight. Sen. Somers stated, “I’m not really sure what that’s for, but the original fiscal note was $30 million… The way I read this is this is just in case something was cut at the federal government. Again, the fiscal note’s been stripped out, so we’re creating these accounts with no money in them… I do not think that is prudent fiscal or public health policy.”
Her amendment to remove the account from the bill failed along party lines.
Sen. Gordon added, “When one starts creating various accounts, if we’re not at this point having any fiscal note anymore for money to go into the account, then what are we doing with the account” he asked and stated, “We have no clearly defined process, checks and balances, oversight for how money goes in, how money is accounted for, and how money then might be used.” He also warned an account like this could “multiply” and “metastasize through our budget.”
The bill ultimately failed, but the safeguard account was later slipped into the budget bill. Now activists want to turn it into a permanent funding source, using it to backfill any federal program they deem important — far beyond its original public health focus. They describe it as helping “in each of the places where people are most vulnerable,” a definition so broad it could justify almost any state program.
The Real Fiscal Stakes
Connecticut’s pension liabilities are among the worst funded in the country. Every dollar not used to pay them down is a dollar taxpayers — and their children — will owe with interest . Diverting surplus funds to new programs would be a serious misstep. A budget surplus is not a reliable source of income; it’s a temporary windfall. Using a one-time gain to fund permanent obligations is a fundamental error in fiscal policy. It’s the equivalent of using a tax refund to sign up for an expensive new subscription service instead of paying off high-interest credit card debt.
Under the current rules, the FY 2025 surplus is already slated to make a serious dent in long-term obligations, with an estimated $1.95 billion headed toward the state employees’ and teachers’ retirement funds. This is a display of fiscal discipline. Undoing this progress would be a major setback, passing the burden of debt onto future generations of taxpayers.
Responsible budgeting means not using one-time windfalls to create ongoing obligations. A budget surplus is not a revenue stream the state can count on year after year. Economic downturns, market corrections, and tax base erosion can wipe it out overnight. When that happens, the same lawmakers demanding new programs today will be crying “budget shortfall” tomorrow.
A Better Path Forward
Instead of acting as a replacement ATM for every federal spending cut, Connecticut should focus on long-term stability, accelerating pension debt reduction and tackling unfunded liabilities, before they spiral even further out of control.
The state’s priority should be to foster economic growth and opportunity — policies that reduce reliance on government assistance over time. Real leadership means resisting the urge to spend a temporary surplus on politically fashionable programs. It means shoring up the state’s financial foundation so it is prepared for genuine, unforeseen crises. The proposal to divert the surplus into a slush fund is not compassion; it’s a master class in bad governance.
