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        $1,000 extra per year? CT Republicans pitch big tax cut, but can the state afford it?

        Republicans in the state Senate proposed sweeping tax cuts on Monday. But with growing budget needs and uncertainty from the Trump administration, Gov. Ned Lamont is urging restraint.

        John Craven

        Feb 4, 2025, 9:48 PM

        Updated 4 hr ago

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        How does an extra $1,000 a year sound? That’s how much Republicans in the Connecticut Senate say they can trim your family's tax bill.
        On Monday, they pitched sweeping tax cuts.
        But critics said the plan shortchanges critical needs – especially if President Donald Trump keeps his promise of deep federal spending cuts. And they questioned whether the GOP's math adds up.
        INCOME TAX RELIEF
        Republicans said voters sent a clear message in November: the cost of living is too high.
        “Taxes take too big of a bite out of our budget,” said state Sen. Heather Somers (R-Groton). “Groceries and everyday necessities are increasing at an alarming rate.”
        Senate Republicans want to lower income tax rates on the first $50,000 you earn ($100,000 for married couples):
        - Individual earnings up to $10,000 ($20,000 for couples) would see their tax rate cut in half (from 2% to 1%)
        - The next $40,000 in income ($80,000 for couples) would see a reduction from 4.5% to 4%
        The relief would begin with the 2026 tax year. Further cuts could come in the 2028 tax year, according to GOP lawmakers.
        “It’s about time we make this state more affordable,” said state Sen. Stephen Harding (R-Brookfield), the Senate Republican leader. “At one time, we were a tax haven in this state, and I think we can get back to that.”
        OTHER TAX CUTS
        Republicans also want to cap local property tax increases at 2%, paid for by cutting “unfunded mandates” from the state.
        Cities and towns are nervous about losing revenue.
        “CCM appreciates the Senate Republican’s desire to develop policies that can control property tax increases,” said Connecticut Conference of Municipalities executive director Joe DeLong. “However, it must also be noted that most property tax increases occur due to the state of Connecticut either not upholding its funding commitments to Connecticut communities or reducing those commitments altogether.”
        The GOP plan would allow municipalities to override the cap with a 60% vote.
        Republicans also want to cut licensing fees for dozens of jobs – something that Gov. Ned Lamont may include in his state budget proposal – and trim a 0.5% payroll tax that funds the Paid Family Leave program. That program consistently runs big surpluses.
        “That can equate to roughly a $1,000 income tax cut for the average family,” said state Sen. Ryan Fazio (R-Greenwich).
        In all, GOP lawmakers said their plan offers $700 million in tax relief.
        CAN CT AFFORD IT?
        To pay for it all, Senate Republicans want to freeze state workers’ salaries for two years – which are set to increase under an already-approved collective bargaining agreement.
        The State Employee Bargaining Agent Coalition said re-opening negotiations is a non-starter.
        “State employees have a long and recent history of taking wage freezes and making other financial sacrifices in order to balance the budget and preserve our upside down tax structure,” said SEBAC spokesperson Drew Stoner.
        To pay for the rest of the tax cut, GOP leaders want to tap $340 million in interest collected while federal pandemic relief sat in the bank. Lamont’s budget office only recently discovered the money.
        That's one-time cash, but Republicans believe they can find additional savings through simplifying the tax code and closing loopholes. They also want to restrict state borrowing.
        TAX CUTS VS. OTHER NEEDS
        But paying for steep tax cuts will be a tall order, since lawmakers – on both sides of the aisle – have a long wish list for funding this year.
        That includes increasing Medicaid reimbursements for doctors and hospitals, including expanding HUSKY to cover diapers for children up to three years old. Supporters said the expansion could pay for itself in lower medical bills.
        “When you go to Pampers, Huggies, it’s a lot more money. Almost $50,” said Thais Santos, a Bridgeport mother of five. “And you cannot afford it if you need to buy food, if you need to pay the heat, if you need to pay the house.”
        Both parties also want to increase special education funding. Some school districts are spending one-third of their entire budget on it.
        “Addressing special education is also property tax relief,” said Hartford Mayor Arunan Arulampalam. “It’s not just about special education aid. It’s about building stronger education systems for all of our children and reducing the property tax burden on all of our towns.”
        Lamont plans to propose $54 million in additional special education funding in Year 2 of his budget proposal.
        Lawmakers also want to spend $10 million on the Connecticut Nutrition Assistance Program.
        "$10 million is probably not enough money to help the actual need, but I'm a realist,” said state Sen. Eric Berthel (R-Bethel). “I’ve been up here for 11 years now.”
        Critics accused GOP senators of trying to eliminate the safety net.
        “The GOP’s proposal today is yet another attempt to pit working families against each other," said Norma Martinez-HoSang with Connecticut For All, a coalition of labor and nonprofit groups. "A tactic designed to distract from their true agenda – cutting funding for critical services while protecting a tax system that benefits only the wealthiest individuals and corporations,."
        THE TRUMP FACTOR
        Looming over the entire state budget process is a huge unknown. How much will the new Trump administration cut federal aid to states?
        On Monday, Lamont said that now is the time to be cautious.
        “There’s no way – and I’ve talked to all my fellow governors – that states will be able to make up for all the shortfall if the feds pull back,” Lamont said Monday.
        Republican leaders accused Democrats of “fear mongering” over Trump.
        “My colleagues are not going to throw away tax cuts for our constituents because of fear mongering going down in Washington, D.C., by Democrats in this building,” Harding said.
        Lamont is proposing some tax cuts, but mainly for businesses. He wants a $2 million expansion in research and development tax credits. Two years ago, he signed the first income tax cut in nearly three decades.
        “The Governor will be releasing his budget proposal tomorrow, which builds on the progress we have made in previous budgets and will include additional tax relief,” said spokesperson Julia Bergman.
        Lamont delivers his budget address to lawmakers on Wednesday at noon. News 12 Connecticut will have live coverage all day from Hartford.