Things are about to get busy in Hartford.

On Wednesday, Gov. Ned Lamont delivers his State of the State speech as Connecticut lawmakers return for the 2025 legislative session. Expect big fights over how to spend – and how much to spend – your tax dollars.

After lawmakers are sworn in, Lamont will lay out his agenda in the annual State of the State address. A year ago, fresh off the Connecticut’s first income tax cut in decades, the governor painted a rosy picture.

“Our tax credit for working families and $400 million tax cut for middle-class families is now saving you about $25 per paycheck,” he told lawmakers.

But this year, money is tighter since federal pandemic relief ran out. Republicans, as well as Lamont, argue that this is no time to loosen the state’s strict spending limits, known as “fiscal guardrails.”

“Weakening or removing them would set the state back financially to the pre-2017 era, when Connecticut was on the brink of bankruptcy,” said Carol Platt Liebau, president of the conservative Yankee Institute. “There’s a false choice being set up, that either we undermine the financial security of Connecticut's families or we deprive people of the help they need today.”

But with so many families struggling to make ends meet, many Democrats say Connecticut can’t afford to be stingy – especially when the state is racking up record surpluses.

“We have families who are still, you know, living paycheck to paycheck to pay their rent, to buy food,” said Norma Martinez HoSang, director of the Connecticut For All Coalition. “We think we can do both actually. We think we can both be responsible and make some adjustments that are going to make a real difference in people's lives.”

The coalition plans to push for a tax hike on the state’s wealthiest families – a non-starter for Lamont, who himself is worth millions. Lamont believes a “millionaire’s tax” could drive away Connecticut’s biggest taxpayers.

Most sides do agree on a few things – including more funding for special education, which can cost some local school districts almost half of their annual budget.

“We’re very concerned,” said Kate Dias, president of the Connecticut Education Association. “There, at last count, was more than 500 vacant special education positions. And that’s devastating to our ability to serve our students.”

Both Republicans and Democrats also want to explore tax relief for parents, although they disagree on the details. Efforts to pass a child tax credit have failed over the past few years amid cost concerns.

In New York Gov. Kathy Hochul wants to triple the state’s Empire State Child Tax Credit.

“The cost of living and raising a family is still too high,” Hochul said on Monday. “We’re proposing a massive increase to put money back in the pockets of hardworking families.”

Hanging over this year’s budget debate is a very big unknown – what will President-elect Donald Trump do? Big changes in Washington could have a big impact here.

Besides state spending, lawmakers plan to take up Connecticut’s high electric rates. Democrats will also try again to pass wide-ranging legislation to regulate Artificial Intelligence. But the effort faces an uphill battle; a bill last year died after Lamont threatened to veto it.

“I do worry that if it is too burdensome and regulatory, all the startups in and around AI will not be in Connecticut,” Lamont said in May 2024. “They’ll be in Georgia or Texas.”

On the conservative side, Yankee Institute is urging lawmakers to freeze state workers’ wages.

Two key lawmakers will not be sworn in Wednesday. State Sen. Kevin Kelly (R-Stratford), who was ousted as Senate Republican leader a year ago, is expected to take a Superior Court judgeship. State Rep. Christine Conley (D-Groton) stepped down on Tuesday to become an administrative judge on the Workers’ Compensation Commission.

News 12 Connecticut will carry Gov. Lamont's State of the State speech live Wednesday just after at noon. You can also stream it on the News 12 app or News12.com.

Plus, we’ll have team coverage all day from Hartford. And News 12 Connecticut’s Mark Sudol will have a one-on-one interview with Lamont on this weekend’s “Power and Politics.”