Connecticut still faces big fiscal challenges. The pension funds for state workers and for public school teachers remain severely underfunded. Connecticut must repair and improve its transportation system, with Gov. Ned Lamont proposing to invest $21 billion over the next decade, although no agreement has been reached as to how to pay for it.

But there has been some good news of late. Connecticut has accumulated a record Budget Reserve Fund, often called the Rainy Day Fund, of about $2.5 billion, or 13% of general fund appropriations. Earlier this month, Comptroller Kevin Lembo projected the surplus could reach $2.9 billion by the end of the fiscal year, June 30, bringing it to 14.5% of general fund appropriations.

In the short term, at least, revenue from taxes and fees is significantly outpacing expenses. It was not many years ago that the state, coming out of the Great Recession of 2008-2010, had exhausted its surplus and slipped into deficit.

To protect against its own worst instincts, the General Assembly three years ago created a volatility cap and other fiscal constraints to prevent it from going on spending sprees when there is a spike in revenue, producing a surplus. It was a recognition that tax revenue invariably flattens. Democrats now have solid majorities in the House and Senate, but the constraints were passed when a divided legislature forced compromise — the Senate was split 18-18 and Democrats held only a narrow majority in the House. The restraints have enabled the growth of the reserve fund.

This should be great news because it can prepare the state to weather an economic slump and subsequent loss in tax revenue without having to cut programs and services and/or raise taxes.

“In order to help protect against future economic downturns, Connecticut must maintain financial discipline and continue building the Budget Reserve Fund balance to the statutory target of 15%,” said Lembo in his statement earlier this month.

But that big reserve is a tempting target.

The nonprofit social services agencies, which Connecticut contracts to provide about 80% of state-sponsored serves — such as substance abuse and mental health treatment; residential programs for people with developmental disabilities; and homeless shelters — say due to a lack of fiscal support from the state they are stretched thin and cannot retain workers because of low pay.

The CT Community Nonprofit Alliance, which represents more than 300 such agencies, has asked Lamont to invest $100 million from the surplus into the nonprofits to stabilize them.

Lamont has resisted, saying his priority is building the surplus.

Meanwhile, state Senate Minority Leader Len Fasano, and Senate Republicans want to use the surplus to underwrite transportation projects and avoid the tolls that Lamont has said are necessary. Fasano would take $1.2 billion from the surplus, about 40%, and put it toward pension debt, allowed under statutory and constitutional caps.

But Fasano’s intent is not to shore up pensions.

Instead, the influx of cash would lower future pension payments by some $225 million a year, which Senate Republicans would then use to secure low-interest federal loans for transportation. Voila! By 2024 the reserve will be back up to $2.5 billion, according Office of Fiscal Analysis projections.

Except the whole thing explodes if a deep recession hits.

You make not like tolls — I think they’re necessary — but Fasano’s “solution” is dangerous.

I don’t expect these to be the last ideas for spending the surplus. But any idea should be measured against Lembo’s warning that tampering with this bit of good news would leave Connecticut vulnerable to the mistakes of its recent past.

Paul Choiniere is the editorial page editor.