Back in April, the Lamont administration was projecting a $2 billion budget hole because of COVID-19, but now the deficit is less than half that.

The Lamont administration says the improvement can be credited to two reasons: a lot of people moved to Connecticut this year and are paying taxes, and the stock market is booming.

At the state capitol, Democrats say the news could avoid another tax hike, but they won't know for sure until final revenue figures come in next April.

"It's very premature for us to be talking about bad decisions we have to make...people are hurting in Connecticut. But there's also a booming stock market happening," said state Rep. Sean Scanlon.

The state's finances may be improving, but it is still $1 billion in the red.

There is also a lot of pressure to raise taxes on the wealthy.