Spending

State lawmakers pass budget with historic spending — and tax cuts

It’s gonna be late night in Hartford. Connecticut lawmakers will begin voting on a new state budget that makes big investments in children, climate change and retirement debt retirement — but also includes historic tax cuts.

The Connecticut House of Representatives is expected to approve the tax and spending plan tonight. The state Senate will vote on Tuesday.

Governor Lamont says it’s the biggest tax cut in state history – even bigger than Governor John Rowland’s cuts in 1995.

“These are tax cuts that are going to make a difference for you right now,” Governor Lamont said.

Tax relief affects almost everyone:

Owners

  • Property tax credit increases to $300 and more people qualify

Parents

  • A one-time $250 rebate check for their first three children. Applies only to single filers earning up to $110,000 or joint filers earning $210,000. Highest earners may claim a little less
  • Extended Earned Income Tax Credit
  • 2,500 tax reduction for a stillborn child

Drivers

  • Car taxes capped at 32.46 mills (1 mill costs $1 per $1,000 of a car’s assessed value). This will reduce taxes in about 75 cities and towns.
  • o “Gas Tax Holiday” and free bus rides extended until December 1

Movie theater

  • o The 6% head tax was abolished in 2023

Wine and spirits producers

  • Wineries, cider and mead producers are now eligible for the sales tax exemption

Lamont pushed back against Republican criticism that most taxpayers won’t see relief until next year.

“You’re gonna get this [car tax] bill on July 2 and you can get those savings virtually the same month,” Governor Lamont said.

In addition, seniors’ pensions, annuities and 401(k) income will no longer be taxed. It’s an attempt to stop retirees like 84-year-old Jerry Roisman from heading south.

“People tried to lure me [to
move] in Florida or South Carolina or a variety of other places,” the West Hartford resident said.

The budget also spends a lot – more than $24 billion.

There is also a pandemic allowance for essential workers. The new Connecticut Premium Pay program will pay between $200 and $1,000 to workers who earn $150,000 a year. Workers must submit their applications by October 1. But only private sector employees are eligible; the Lamont administration is negotiating a separate “Hero Pay” package for state workers in addition to the new raises they are about to receive.

Private social service providers will also receive increases in the cost of living.

Other key budget provisions

· Free community college increased from three to four years. Part-time students are also eligible for at least $150 per semester.

Free menstrual products in select school bathrooms, college campuses, and homeless shelters

· Extends HUSKY Medicaid coverage to undocumented children 12 and under. Currently the limit is 8 years. Children must continue to receive benefits until they turn 19, as long as they continue to meet income eligibility

Creates a new Commission on the Intervention and Prevention of Armed Violence in the Community

5% increase for judges

Retailers would be required to verify the identity of all tobacco purchases

New psychedelic-assisted therapy pilot program at Connecticut Mental Health Center

· Demand that climate change be taught in public schools. For now, it’s an option

New Indoor Air Quality Grants for Schools

The state treasurer could automatically reimburse people for up to $2,500 in unclaimed property without them filing a claim

The budget also includes puzzle items, such as $2 million to establish nonstop flights to Jamaica.

Lawmakers could also receive their first pay rise in two decades. Members earn only $28,000 a year for increasingly full-time employment. The budget includes money for the increase, but a separate bill would implement them. The state attorney general would also get a raise under the legislation, putting him on par with what the judge earns.

Anything is possible because Connecticut is swimming in money, due to inflation, a strong stock market and a one-time infusion of federal relief funds. The state’s latest surplus is now nearly $5 billion, allowing lawmakers to spend money on priorities while cutting taxes in an election year.

The surplus also means a $3.5 billion payout to deal with Connecticut’s staggering debt load.

Republicans have proposed even deeper tax cuts, including a blanket reduction in the 1% income tax rate that Democrats say is too costly and may violate federal rules. GOP lawmakers weren’t at the negotiating table and say the budget is rushed.

“It’s an unacceptable way to run our government — that we’re getting this package at 4:37 a.m.,” said state Rep. Nicole Klarides-Ditria (R-Seymour).

The new budget also addresses Connecticut’s struggling school building program, which is now under investigation by the federal grand jury. He is tightening rules around emergency projects, which some school districts say a former budget official used to direct construction contracts to certain bidders, a claim he denies. The budget also returns funds to the State Procurement Standards Board, which has the power to revoke contracts.