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February 7, 2025

Lamont’s budget projects CT’s economy will see slower growth in next two fiscal years

Shahrzad Rasekh / CT Mirror CT Gov. Ned Lamont delivers his budget address on Wednesday, Feb. 5, 2025, in Hartford.
By Greg Bordonaro

In building his two-year, $55.2 billion budget proposal, Gov. Ned Lamont assumed slower growth for the U.S. and Connecticut economies in the coming years. 

Lamont on Wednesday unveiled a biennial budget that would loosen Connecticut’s fiscal “guardrails,” launch a major early childhood development initiative, provide an income tax cut, and restructure hospital taxes to secure more federal aid.

The plan also would boost Medicaid rates for caregivers, corporation taxes and transit fares, invest in special education and preserve already-planned increases in town aid.

The budget would spend almost $27 billion next fiscal year, up 3.8% from current levels, then jump another 4.6% to $28.2 billion in 2026-27.

In a supplemental report, Lamont disclosed the economic assumptions his staff used to build the budget. It projects the U.S. economy to grow 1.7% in both fiscal years 2026 and 2027, ticking up to 1.8% in fiscal 2028. 

It projects the inflation rate to increase to 3.4% in fiscal 2026, decreasing to 2.8% in fiscal 2027 and 1.8% in fiscal 2028.

Locally, Lamont’s administration projects Connecticut’s real gross state product to close fiscal 2025 with growth of 1.6%, and then increase at a slower rate in fiscals 2026 and 2027 to 1% and 1.1%, respectively. 

Personal income in Connecticut is projected to increase by 4.7% by the end of fiscal 2025, before growing by 5.1% in fiscal 2026, 4.5% in fiscal 2027, and 4.4% in fiscal 2028, according to the Lamont administration.

Here's a chart outlining the Lamont administration's economic projections:

A CT Mirror report was used in this story. 
 

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