Connecticut State Capitol, Hall of the House of Representatives
February 4, 2026
Ned Lamont used his 2026 State of the State address at the Connecticut State Capitol to highlight Connecticut’s fiscal stability, economic growth, and efforts to shield residents from federal funding cuts while keeping the state budget balanced. He emphasized that Connecticut has passed seven consecutive on-time, balanced budgets, built a $4 billion rainy day fund, reduced pension debt by more than $10 billion, and maintained a strong economy with rising business growth and low unemployment. Lamont asked lawmakers to extend the state’s emergency reserve fund to backfill potential federal reductions and proposed a roughly $400 energy rebate for families to offset high heating costs.
The governor outlined priorities aimed at lowering everyday costs, including expanded tax relief, higher wages, childcare investments, free school breakfast, restrictions on student cellphone use, and the creation of a Blue Ribbon Commission on K–12 education funding. He also called for more housing development, especially near transit, reforms to lower energy prices through increased supply and efficiency, healthcare cost controls through the Connecticut Option plan, and continued support for vulnerable residents through food, health, and social service programs. Lamont closed by stressing community safety, inclusion, and protecting immigrants and families, framing Connecticut as a stable, pragmatic contrast to what he described as chaos and uncertainty at the federal level.
The State of the State in full:
Mr. President, Mr. Speaker, Senator Harding, Representative Candelora, Lieutenant Governor Bysiewicz, members of the General Assembly, and people of the great state of Connecticut.
Two hundred and fifty years ago, Thomas Paine wrote Common Sense – that America’s fight for freedom was not radical rebellion, but simply common sense. He was what we would call today a social influencer. His pamphlets were handed out by the hundreds of thousands. His call to revolution was debated from taverns in Windsor to coffeehouses in Fairfield. By the end of that year, 1776, his optimism was tempered by hard times. Paine concluded, “These are the times that try men’s souls.”
Two hundred and fifty years later, we find ourselves once again in times that try men’s souls. Masked federal agents have descended on Minneapolis, terrorizing communities, tearing families apart. Two young Americans – a mom and an ICU nurse – shot dead. Some of our folks worry that another government shutdown and sudden federal cuts will mean no dinner tonight, no roof over their head, too expensive to take care of a sick child. These are times that try men’s souls.
That said, I feel fortunate to be in Connecticut and I hope that you do too. We were a birthplace of freedom. Four signers of the Declaration of Independence, penning the words that we live by: “All men (and women) are created equal.”
These words should still be our north star 250 years later. I live by these founding words as I think about our values and our budget.
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.
Because we have used Connecticut common sense, we have been able to make up for some of the harsh cuts coming out of The White House. We were among the very first to backstop food support for working families. We saw the scared faces and long lines at the food pantries just a few months ago.
The federal budget could have increased health insurance costs on the exchange by thousands of dollars for many middle-class families. Instead, Connecticut is making up for most of these federal cuts. We saved you money and ensured Connecticut has more of our citizens with health insurance while the rest of the country has less. And, we continue to provide primary care regardless of background, thanks to additional funding for FQHCs and Planned Parenthood.
When confronted with these cuts, most states said, “Tough luck, blame the feds, you’re on your own.” In Connecticut, we assured our residents, “We’ve got your back.”
I thank the legislature for giving us the resources to protect the most vulnerable. We still have over $313 million to backfill any other unanticipated cuts from Washington. I respectfully ask you to extend the fund through the end of next fiscal year. Hope for the best, prepare for the worst.
That said, we can’t make up forever for what the federal government used to support, and I hope that the feds and the states can reestablish a new partnership in the year ahead. I am not so optimistic, as our country faces government shutdowns; herky-jerky federal policy; the tariffs are on, no their off; wind power is shut down, no wait.
The chaos in D.C. is the opposite of what we’re doing in Connecticut.
Governors and legislatures are supposed to deliver budgets on time and in balance while the feds are screaming in the wrong direction. Here in Connecticut, we are delivering our seventh balanced budget in a row, on time, all the while building up a $4 billion rainy day fund in case of a recession, and paying down over $10 billion in pension debt, unlike our predecessors who put pension costs on the credit card for the next generation to pay.
And thank you, Treasurer Russell and the investment team – for the first time in a long time, our investment returns are much higher than the average, helping our funds go from 35% funded to nearly 65% funded. State employees and teachers, your retirement is secure.
The Connecticut economy is strong, for now. We have faster economic growth (fourth highest in the country last quarter), more new business startups, and lower unemployment than most of the nation – all of which contributes to higher state income, and that allows our 2027 budget to increase investments in education, housing, and nonprofits – not to mention our emergency reserve.
It is bad for any budget – your family budget, the budget for your small business, our state budget – to grow faster than your income can support. We have been down that deficit road before, but our strong economic growth allows us to do more without compromising our honestly balanced budget.
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. “We’ll figure out how to pay for it later.” Oh no, not again.
But that said, how can we help folks who are suffering through one of the coldest winters in decades, facing enormous heating bills, not to mention inflationary food and housing?
Thanks largely to seven very volatile artificial intelligence stocks, the so-called “Magnificent Seven,” our streaky capital gains revenue is strong for this year, and I propose sending you an energy rebate, about $400 per family, to help you and your family manage through these trying times.
Every year we have worked to make life a little less expensive and a little more affordable. Working families earning a little more sure helps. Remember cheering on the essential workers during COVID? Many of them were earning the minimum wage, which today is almost $17 an hour, up from about $10 since we took office.
And after receiving no increase for several years, our state employees have received a wage increase every year we’ve been in office. We appreciate your extraordinary work, and tell your friends we still need more nurses, corrections officers, and state police.
We were told by the naysayers that a higher wage would crash the economy, instead a little more money in your pocket is allowing more families to get back on their feet and our economy to prosper.
And how about keeping more of what you earn? Many of our essential workers receive an expanded money back earned income tax credit – about $1,000. Thank you, Marty Looney.
And the middle class received a $400 million income tax cut, which we did on a bipartisan and sustainable basis. Politicians talk tax cuts, we got it done.
Our budget eliminates the licensing fees for nurses and the trades. Does a plumber really have to pay to maintain their certification every year?
And a few years back, we eliminated the income tax for most of our seniors. Florida is a great place to visit, wouldn’t want to live there.
Getting our fiscal house in order has also allowed us to save young and growing families tens of thousands of dollars per year in childcare costs. Our budget is still in surplus, allowing us to make another sizeable deposit in our childcare endowment, well on our way to making universal early childhood education a reality. Making it a little easier for parents to get back to work, and giving your child the very best headstart in life.
And then your kid is on to some of the best K-12 schools in the country. Whenever you can, thank a teacher for everything, since they are doing more and more.
Help your teacher teach – read to your child at night. And turn off the damn smart phone. I used to carp that smart phones make you stupid.
Social media can also feed a sense of isolation, persecution, and anger – a dangerous psychological cocktail.
Connecticut was a leader in getting these phones out of the classroom. Let’s go one step further – no phones bell to bell in any of our schools, and let’s work with our neighboring states in requiring that no child under the age of 18 has access to these dangerous apps without parental permission.
We tried last year, let’s try it again this year – our budget provides for free school breakfasts for all of our students. Everybody starts the day right. No shame, no stigma, no empty stomachs.
Connecticut has one of the best school systems in the country, but that is not true of all of our schools. In the coming days I will sign an executive order to create the Blue Ribbon Commission on K-12 Education.
- A bottoms-up look at education with a focus on an updated funding strategy, the foundation grant, and making sure more resources go to the classroom.
- How do we build on our special education reforms, which included $80 million in additional funding from last session, emphasizing more local and regional options? Better for kids; saves you money.
- We have 207 school districts; that doesn’t mean we have to replicate every overhead function 207 times. The commission is focused on saving money for the classroom and the taxpayer.
How do you focus on homework without a roof over your head? So, let’s talk about housing. Making life a little less expensive means more housing in a state where more and more people want to be – as long as they can find a place to call home.
Our housing market is very tight, which means that your home is worth 40% more than it was five years ago. That’s good, you are building wealth, but if you don’t already own a home it is also more expensive to rent or buy a home.
We are building more housing in Connecticut, mostly in our larger towns and cities, and thanks to leaders like Jason Rojas and Bob Duff we are trying to make it easier and faster and less expensive to build new housing. That’s what I call permitting reform.
Thanks to the mayors and first selectmen, Democrats and Republicans alike, for weighing in on our housing strategy. Towns take the lead. You tell us, mayors, where you want housing, and where you don’t want housing.
No to building in that open field. Yes to reimagining that under-used parking lot. That old mill sitting empty. That half empty suburban shopping mall or under-used office building, all of which could be retrofitted for housing.
We are talking housing for our seniors who may want to downsize. Housing for our nurses and teachers and firemen and cops who want to live in the town they love and where they work. Our budget continues to prioritize mortgage and Time to Own subsidies for those working in our towns.
And remember housing for your kids, for young people – families and singles. When I was younger, 10% of folks lived alone. Now, it is closer to 30%. Two options – more housing for singles or hurry up and get married.
Every business thinking about moving to Connecticut or expanding here asks about workforce housing. When they ask where will the next generation of workers live, we no longer have to look at our shoes and mumble that we’re working on it.
Have you visited New London? They have added more new homes in the last five years than in the last fifteen years. The Naugatuck Valley is booming – more housing alongside more frequent rail service and new train stations. The poster child for transit-oriented development.
Focus on housing next to train stations and busways. We are finding much less need for cars and parking, less traffic, and less cost to you.
By the way, Zillow just announced that Hartford is one of the hottest housing markets in the USA. Economic growth is good for our state budget. And mayors, a growing economic pie helps your local budget as well. We had decades of shrinking grand lists and shrinking schools, driving up costs per student with a smaller tax base to pay the bills. That drives up property taxes.
I’ve said it a million times – no to more taxes but yes to more taxpayers, as we work with mayors to reduce your tax bill with more housing and local business.
And our budget continues to strengthen our COGs – a regional back office so every town does not have to hire its own building inspector or housing planner, just trying to save you a little money.
Yes, our budget builds on our ongoing commitment to municipal aid and pilot programs. Resources have doubled over the last seven years, but the long-term answer is economic growth and real reform.
Let’s take energy. The answer isn’t just more subsidies or moving costs from ratepayers to taxpayers. No more rearranging the deck chairs. Our electricity prices have been among the highest in the country for the last generation or two. We do not have ready access to more energy sources; we’re not Texas. And demand is picking up as our economy accelerates.
Subsidies are a quick fix, but as a business guy I get the power of supply and demand, which impacts costs from housing to energy. Looking at energy prices seven years ago, we followed the Hippocratic Oath: do no harm.
Many states unplugged nuclear power and plugged in energy sucking data centers, driving up prices around the country. Here in Connecticut, we did just the opposite. We extended our Millstone nuclear agreement and said slow down new data centers, unless they add more generation as well. By the way, the Millstone contract is returning over $100 million to ratepayers this year as the price of natural gas skyrockets.
Our energy regulatory authority, PURA, requires a constructive relationship with our utilities, but PURA should never be afraid to hold the utilities accountable. Utilities deserve a reasonable rate of return for maintenance and upgrade of the grid. We will continue to scrutinize rates and ensure ratepayers are only covering infrastructure and energy use. They’re no longer paying charitable, legal, advertising, and lobbying expenses. Your shareholders – not ratepayers – are now paying these bills.
Back to supply and demand, I continue to believe that energy efficiency reduces demand and reduces the electric bill for you. Caulking and insulation can save you hundreds of dollars and reduce demand on the grid, with zero new carbon emissions. Meanwhile, we are adding supply with Québec Hydro and Revolution Wind. We still await a proposal from the pipeline companies.
The White House threatens to put a tariff on Canadian energy, and the stop-start-stop-start on wind only drives up costs for you. Thanks to all of you, and some of you for stating loud and clear these erratic federal policies are no way to run a business. And thanks for legal help from Attorney General Tong, we got the wind power turned back on.
Supply and demand – more housing reduces the cost of housing, more generation reduces the cost of electricity, more economic growth reduces taxes. We are making progress, but we have a long way to go.
I highlighted more housing and electricity as affordability priorities a few years ago. Accelerating healthcare costs are the looming iceberg on our radar systems. Just as we are getting our pensions under control, healthcare costs are eating up more and more of our budget, especially Medicaid and retiree healthcare costs, and your local businesses or school budgets are equally impacted.
We can’t wait for innovations from the feds. So far, The White House’s “reforms” include increasing insurance premiums on the exchange and cutting Medicaid, so any increase is born by the states.
All the while, our population is getting older, hospitalizations are booming. We have not been waiting. Comptroller Sean Scanlon has been on this for years. His healthcare guy, Josh Wojcik, is now our interim OPM secretary, and getting control of our healthcare spending is a big reason why.
Sean, Josh, and Department of Social Services Commissioner Andrea Barton Reeves are working hand-in-hand to find efficiencies on both the state employee plan and Medicaid that will bend the cost curve and save taxpayers money and keep healthcare affordable.
Here’s one example. The cost of one of the most commonly prescribed brand name drugs for plaque psoriasis kept rising. By switching to the generic version, Sean saved the plan $15 million in year one and projects to save $50 million in year three, all with the same or better outcomes. And that’s just one drug.
At a time of rising costs, we’re doubling down on what we’ve always done – being tough as nails on medical fraud and looking under the hood for big savings whenever and wherever we can.
Let’s work together on the Connecticut Option. This plan will encourage state employees, retirees, and small businesses to go to hospitals where you get the best value, because some hospitals charge 50% more than others for the same outcome.
We will be able to offer you healthcare with no co-pays or deductibles if you sign up to the Connecticut Option, saving you money, saving the state money, and making sure our top-line healthcare is affordable for you.
Let’s work this together – labor and business, hospitals, and insurance. Don’t let the lobbyists scare you. We can and will finally move to universal, affordable healthcare. Rather than pushing people off healthcare, we will make sure you are taken care of.
I’ve been around for a while, and never have I seen the world so divided, people so divided, drilling down on what separates us rather than what we have in common. That can be true in policing as well as politics.
I want to give a shout out to the Connecticut State Police and their municipal police brothers and sisters. They are of, by, and for the community, keeping you safe like looking out for a neighbor.
Cops are best when they can afford to live in the community where they serve. Many of them know the kids from the police athletic league, and the kids know them. Thank you, Waterbury.
We have perhaps the best trained police force in the world, making Connecticut one of the very safest states. ICE is just the opposite. They see the world as us versus them. They are not trained to deescalate – they are barely trained at all. They hide behind a mask, they come to Connecticut – and Minneapolis – to arrest people outside of schools or courthouses, often based upon the color of their skin.
Some of our Hispanic kids are scared to go to school. Those kids at Wilbur Cross High School in New Haven – we call them Dreamers; The White House calls them criminal aliens.
That young mother shot twice in the head in Minneapolis – The White House called her a domestic terrorist; she reminded me of my daughter.
Connecticut is protecting our schools and courthouses, where people go not to break the law but because they are following the law. ICE, everywhere you go uninvited, violence follows. Go home. We are keeping Connecticut safe without you.
Yes, these are the times that try men’s souls, but Thomas Paine went on to warn when the going got tough, the summer soldier and the sunshine patriot will, in this crisis, shrink from service to their country. Warning what he called tyranny sneaking up on us step by step because good people didn’t speak out.
But I also believe he would feel at home in Connecticut, where we are staying to true to our founding principles of life, liberty, and the pursuit of happiness, where all men are created equal.
He might have been as moved as Susan and I were during the swearing in ceremony for the new mayor of Norwich, Connecticut. It is a beautiful town hall, not quite as old as our country, and lit up it is the backdrop for many a Hallmark Christmas film. The ceremony was packed, including our first Native American legislator, Larry Pemberton. The walls lined with photographs of former mayors, bunch of old white guys, looking down on the crowd of turbans and colorful garb celebrating their Sikh heritage, since Mayor Singh is our first mayor of Sikh heritage.
Norwich has a rich history – first settled by Native Americans, Puritan revolutionaries to build the ships, later the Irish built the railroads, eastern Europeans came to work the mills, later the Sikhs from Punjab to run the stores. Today there are over 25 languages spoken in Norwich.
And for Mayor Singh’s swearing in ceremony, everybody proudly put their hand on their heart, “I pledge allegiance to the flag of the United States of America.”
That’s the Connecticut I love and the America we fight for. God bless America and the great State of Connecticut.