Two months into the new fiscal year, the state still expects end the year with a small surplus, though that figure does not include a settlement with the Connecticut Hospital Association, which sued the state in 2016.

Office of Policy and Management Secretary Melissa McCaw told state Comptroller Kevin Lembo in her monthly letter that she expects to end the fiscal year with a $126.1 million surplus, the CT Hour reports.

However, her “balance projection does not include the impact of a potential settlement of hospital litigation.”

The CHA and the administration in May announced they had reached a settlement; the budget approved by lawmakers in June included the use of $30 million in surplus funds from last year to help settle the case.