Connecticut Gov. Ned Lamont (D) and leaders of the Democrat-controlled General Assembly are touting a $24 billion budget deal for the next fiscal year that contains almost $600 million in tax reduction.
Most of the tax relief, however, will only remain in effect through the end of the year.
The agreement would extend the suspension of the state’s 25-cent-per-gallon gasoline tax that the governor approved late last month. It would also provide $750 to families with children, increase the property tax credit from $200 to $300, freeze vehicle taxes for many state residents, raise the state’s Earned Income Tax Credit from 30 percent to 41.5 percent through the end of 2022 and exempt 401(k)s and pensions from income taxation.
The deal furthermore increases aid to the child-care industry in light of its difficulties in the wake of the COVID-19 pandemic and the restrictions put in place throughout much of the last two years in response to it.
Lamont has referred to the deal’s revenue changes as “historic tax cuts to help working folks, middle-class families, and retirees. …”
State House of Representatives Finance Committee Chairman Sean Scanlon, who is currently running for state comptroller, similarly gushed over the agreement. His remarks also tacitly recognized the difficulty in which his party finds itself, given the poor performance of the national economy under President Joe Biden.
The nation’s gross domestic product contracted at an annualized rate of 1.4 percent in the first three months of 2022 – the first time in many years that America has returned to negative economic growth after a recent recession. This dashed even the anemic hopes of expressed by surveyed economists to Bloomberg that the economy would have grown by slightly more that 1 percent over that period.
“Because of the reality that people are hurting, because of global issues that are outside of our control, we have the ability to say, ‘We hear you, Connecticut,’” Scanlon told reporters. “We hear that you want help, that you want Connecticut to be more affordable and this package delivers on that. We’re cutting property taxes; we’re cutting car taxes for half the towns in the state of Connecticut; we’re delivering, for the first time ever, a child tax credit.”
Legislative Republicans are meanwhile pushing for a $1.2 billion tax-reduction package which also features a gas-tax-holiday extension, retirement-income-tax cessation and property-tax reduction. The GOP plan also nixes the highway-use tax and cuts sales taxes through the end of 2022.
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Bradley Vasoli is managing editor of The Connecticut Star. Follow Brad on Twitter at @BVasoli. Email tips to [email protected].
Photo “Ned Lamont” by Ned Lamont. Background Photo “Sean Scanlon” by Sean Scanlon.
