Gov. Ned Lamont delivered an optimistic State of the State address on Wednesday, as lawmakers returned to Hartford for the 2024 legislative session.

But some members of Lamont's own party are painting a less rosy picture – saying his budget leaves too many people behind.

STAY THE COURSE

Lamont urged lawmakers to stay the course, fresh off the biggest income tax cut in Connecticut history.

"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.

Lamont could face a fight over the state's strict spending limits, which made the tax cut possible. Many fellow Democrats say the "fiscal guardrails" are starving critical services.

"We need a volatility cap; we need an overall spending cap," said Senate President Martin Looney (D-New Haven). "But it needs to be adjusted for the times."'

Various groups are asking for up to $600 million, but that would push the state budget far beyond the spending cap.

House Speaker Matt Ritter (D-Hartford) said there may be creative ways to balance fiscal discipline and critical needs.

"You have to have some flexibility," he said. "The best example I can give you is child care. We have a trust fund."

But Lamont warned fellow Democrats to leave the caps alone.

"Like too many of our citizens, Connecticut in years past was living paycheck to paycheck with too much debt and no room for error," he said. "Paying down our debts and a robust Rainy Day Fund doesn't short change our programs. It has resulted in six years of consistent increases in our key social programs, rather than the herky jerky boom and bust cycles of yesteryear."

Republicans applauded the governor's stance.

"When people start talking about tweaking this budget and re-balancing and working around the 'guardrails,' what they're really saying is, 'We aren't spending enough,'" said state Sen. Kevin Kelly (R-Stratford), the state Senate GOP leader.

Lamont is recommending a $26.1 billion budget, that boosts spending a modest 3.1%, for the fiscal year that starts on July 1.

His proposal sends more money to the University of Connecticut and Connecticut State Colleges and Universities (CSCU), which also operates the state's 12 community colleges. He is also proposing $310 million in state borrowing for higher education.

"This budget is making our largest state grants ever to our state colleges and UConn," Lamont told legislators. "Seize the opportunity."

But it's unclear if the increase will be enough to prevent a 5% tuition hike at CSCU.

"That means we'll be able to stabilize some of the activity that we have right now, which we understand is very painful and disruptive to the campuses and the students," said CSCU chancellor Terrence Cheng.

Lamont also wants to double the budgeted increase on child care – although that comes at the expense of magnet and charter schools. Teachers' unions expressed disappointment.

"Connecticut prides itself on having one of the best education systems in the country, but that requires continued investment," said Connecticut Education Association president Kate Dias. "The impacts will be felt everywhere, but especially in our most vulnerable communities."

The governor also wants to eliminate licensing application fees for some education, child care and nursing positions.

Non-profits that perform critical services, like battling the skyrocketing fentanyl crisis, had asked for $186 million more.

"After nearly two decades of underfunding that have left nonprofit buying power 32% behind, the proposed flat funding in the governor's budget is an effective budget cut," said Gian-Carl Casa, president and CEO of Connecticut Community Nonprofit Alliance. "We understand the importance of saving and paying off debt. But the choice between properly funding programs and paying debt is a false one. A family that finds its finances have improved would not put off putting food on the table to pay debt; they would do both."

Lamont's proposal also includes $3 million to hire more corrections officers and prison chaplains, $8.8 million for children's behavioral health and money for 12 new staffers at the Connecticut Department of Mental Health and Addiction Services to reach out to the homeless population.

The budget also includes a unique incentive: the state will refund 50% of the income taxes remote workers pay to New York State – if they successfully challenge those taxes in court, and end up paying them to Connecticut instead.

"It is an incentive for Connecticut residents to challenge New York's overreaching tax laws, where they tax Connecticut residents when they work remotely in Connecticut -- for a New York firm," said Jeffrey Beckham, Lamont's budget director.

The idea came from New Jersey. If a legal challenge ultimately succeeds, Beckham estimated Connecticut could gain $200 million in income tax revenue.

Pro-Palestinian protesters briefly interrupted Lamont's speech, chanting "Ceasefire now!" They were led away by an unusually large police presence outside the House of Representatives chamber.

"Whatever the justness of your cause, I think you do a disservice when you're rude and disrespectful in a room like this," Lamont said after the interruption. "Back to our regularly scheduled programming."

Besides spending, lawmakers will tackle several other controversial issues too:

Lamont's plan to require new cars to be electric by 2035.

How to respond to the absentee ballot stuffing scandal in Bridgeport.

Doctor-assisted "aid-in-dying" legislation.

Protecting health care workers after a nurse in Willimantic was murdered back in October.

Whether to legalize psilocybin "magic mushrooms."

Lawmakers have until May 8 to tackle those issues and approve budget revisions.