GOP Lawmakers Propose $1B in Tax Relief
Connecticut House Republican lawmakers released a state budget proposal May 2 that includes over $1 billion in tax relief.
GOP leaders said the $51.9 billion, two-year budget plan adheres to the spirit of the fiscal guardrails put in place in 2017 and extended for five additional years earlier this session.
Unlike the tax package approved by the Finance, Revenue, and Bonding Committee last month, it fully restores the pass-through entity tax credit, returning $60 million to over 123,000 small businesses.
Restoring the pass-through entity tax credit was a feature of Gov. Ned Lamont’s proposed budget and is one of CBIA’s 2023 Transform Connecticut policy solutions.
The Republican proposal also calls for a 2.5% increase in funding for nonprofit service providers, increases funding for rail and bus services, and holds harmless towns losing Education Cost Sharing funding.
The plan outlines $1.16 billion in tax relief for Connecticut residents and businesses, including:
- Mirrors the governor’s income tax relief proposals on lower income brackets (retroactive to the beginning of the year)
- Fully restores the pass-through entity tax credit proposed budget (but excluded from the Finance Committee package)
- Establishes a phase-out threshold for taxes on retirement income
- Eliminates the highway use tax
- Child tax exemption of $2,000 per child
- Maintains the earning income tax credit at current levels
- Reinstates the sales tax exemption for children’s clothing valued under $100
“Connecticut residents desperately need tax relief, but they also deserve a government that responsibly prioritizes and funds core services and programs our communities need,” House Republican Leader Vincent Candelora (R-North Branford) told a May 2 press conference.
Candelora acknowledged this was the first budget his caucus has proposed since 2017, when bipartisan budget talks resulted in the fiscal reforms now driving the state’s record surpluses.
“Good things happen when Republicans are in the room” Candelora said, adding that details of the proposal were shared with Lamont administration officials.
Senate Minority Leader Kevin Kelly (R-Stratford) called the House plan “the best we have seen thus far in the process, and we applaud them for their effort in putting it forward.”
“It contains significant tax cuts which will help working and middle class families, and it abides by the smart fiscal guardrails we all agreed to,” Kelly said.
Lamont told reporters he was “looking forward to beginning negotiations with legislative leaders.”
“Rather than debating what services to cut or taxes to raise, we are instead debating the size of the tax cut we will deliver to Connecticut residents,” he said.
“We need to pass an honestly balanced budget that invests in Connecticut’s growth, avoids the gimmicks and mistakes of the past, and adheres to our spending and revenue caps.”
For more information, contact CBIA’s Eric Gjede (860.480.1784) | @egjede.
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