Gov. Ned Lamont announced his $50.5 billion two-year budget plan to the General Assembly on Wednesday. The budget will deliver more than $500 million in annual tax relief for Connecticut residents.
According to AP News, Connecticut’s personal tax rates are broken up into seven tax brackets, from 3% to 6.99%. Under Lamont’s plan, the 3% percent tax rate will be permanently lowered to 2%, and the 5% rate would drop to 4.5%.
Lamont and state lawmakers have outlined that they are planning on taking steps to make Connecticut more affordable. The administration estimates that Connecticut tax filers would save $436 million annually, and that 1.1 million of out 1.7 million tax-filing households would benefit, according to the budget plan.
This will be the state’s first personal income tax rate reduction since 1996, according to AP News.
Lamont has also announced plans to increase Connecticut’s Earned Income Tax Credit from 30.5% to 40%, which should impact around 211,000 low-income households and increase their refunds to about $211 a year, according to his proposal.
According to the budget plan, depending on the resident’s adjusted gross income, it is estimated joint filers could save around $600, and some single filers could save around $300.
“For the first time in over a generation, Connecticut has enjoyed strong economic and population growth — more taxpayers, a growing economy, coupled with our shared fiscal discipline, has resulted in four consecutive balanced budgets — soon to be five,” Lamont told legislators in his budget address.
Lamont said his plan would also give $10 million in federal pandemic relief funds to help with staffing issues in Connecticut school districts. In addition, he said his plan will fund pay raises for judges and add 255 positions to the state police ranks.
Lamont said, although the plan would add approximately 1,000 new jobs next fiscal year, it will not come close to addressing the entirety of unemployment in the state.
According to the CT Mirror, Lamont could receive pushback from the Democrats and the General Assembly regarding municipal aid. The CT Mirror said democratic legislators argued that the state has resources to expand the Education Cost Sharing program.
Lisa Hammersley, executive director of the School and State Finance Project, said in the CT Mirror that Lamont’s budget does not help schools that are struggling.
“Students are struggling to recover from the pandemic’s impacts on their learning and mental health,” Hammersley said. “School districts are on the edge of a catastrophic fiscal cliff that may require them to lay off teachers, counselors and paraprofessionals. Businesses are having difficulties finding skilled applicants to staff over 100,000 unfilled jobs.”
The governor’s plan will make new investments in early child care and workforce development, increased funding for people with developmental disabilities and rates for residential care homes, however other areas such as public colleges will get less, with the expiration of emergency pandemic aid according to the CT Mirror.
UConn students have discussed Lamont’s plan, as it may have effects on the university budget. Nahum Valiente, the Student Government Association President for UConn Stamford, said he is worried about the governor’s new plan and the effect it may have on UConn’s regional campuses.
“As a Regional Student Leader, it is concerning to see the proposed cuts. Regional Campus students must be reassured that they are receiving a quality education, regardless of their campus location,” Valiente said.