Flush with Cash, Legislators Approve a $24.2 Billion Package of Tax Cuts and New Spending


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HARTFORD – Connecticut lawmakers approved a $24.2 billion budget adjustment that includes significant taxes cuts and and significant new spending based on booming state revenues and a one-time influx of federal aid dollars.

The House of Representatives voted 95-52 on party lines to approve the budget on Monday, and the Senate voted 24-12 to approve on Tuesday. 

State Sen. Dennis Bradley, D-Bridgeport, was the lone Democrat to vote against the bill. State Sen. Heather Somers, R-Groton, and State Sen. Kevin Witkos, R-Canton, broke from their Republican colleagues to vote in favor of the budget.

“The budget that is before us tonight is truly historic. It’s historic in the fact that it cuts taxes more than we have been able to … in the last decade,” said State Rep. Sean Scanlon, D-Guilford, chair of the Finance committee.  

But State Rep. Holly Cheeseman, R-East Lyme, said that while the tax credits were good, they weren’t enough. 

“We’re looking at tax relief of $350 million dollars in a $24.2 billion budget. We are talking about 1.5 percent we are returning to CT residents. I think we can do better. I know we can do better,” said Cheeseman. 

The budget includes a $300 property tax credit available to all those who own property in Connecticut, an extension of the gas tax holiday until December 1, and lowers the cap on the motor vehicle tax from 42 to 32 mills – $100 million savings across 75 towns — and increases the Earned Income Tax Credit for lower-income workers to 41.5 percent, which is projected to affect 200,000 residents across Connecticut.  

“I have to say, I will not let this go – we should not be taxing motor vehicles,” State Sen. Cathy Osten, D-Sprague, said. “We need to find a way to do this. That is just one of the worst taxes, and it is not fair from community to community, it differs what you’re paying on a car that is exactly the same.”

The budget also makes pensions fully tax exempt beginning in 2022 for married couples making less than $100,000 annually and for individuals making less than $75,000 annually, and includes a one-time child tax credit of $250 per child for next year for individuals making less than $100,000 or married couples making less than $200,000 yearly. 

“For a family like the one I grew up in that lived paycheck to paycheck, that’s a big deal,” said Scanlon.  

Other legislators argued that, while the tax package benefits some communities, it would come at a cost to others. 

“The district I represent will not benefit from this provision,” said State Rep. Devin Carney, R-Old Lyme, taking aim at the motor vehicle tax in particular. “It’s sort of take from one group, give to another, and I do not consider it historic for many of our districts.”

Several Republican legislators also argued that diesel fuel should have been included in temporary cuts to fuel taxes, saying that lowering the cost of diesel would also lower the cost of goods that have to be shipped across the country. 

“It is common sense. Diesel trucks deliver just about everything we use,” said State Rep. Joe Polletta, R-Watertown. 

Spending for mental health, childcare, unemployment trust 

Children’s mental health, early childhood education and pandemic pay, as well as paying into the state’s Unemployment Insurance Trust Fund, all saw increased spending in the approved bill. 

The bill includes $158 million for childcare support, including money for increased salaries for childcare workers, the Birth to Three program, infant-toddler care and expanding and reconstruction of facilities. It includes over $42 million for various programs to support school-based health centers and social workers and other mental health workers in schools and physicians’ offices.  

“More than two years ago, this state, as well as all the other states in this country were impacted dramatically in every walk of life that they had. Their jobs, education, employment, families, neighborhoods. And it brought more mental health issues than we ever saw before. When you have a pandemic like that that causes people to be isolated and be required to separate from society … it causes all kinds of issues that happen to all of us,” said State Rep. Toni Walker, D-New Haven, chair of the legislature’s budget committee. 

Republicans expressed concerns that part of the funding for programs was supported by federal coronavirus relief dollars, which will run out at the end of 2024. 

“We have ongoing, recurring expenses that are being funded by this one-time revenue,” said State Rep. Mike France, R-Ledyard. France said he would have preferred to see the federal money used toward infrastructure improvements like HVAC and improving facilities for nonprofits. 

Republicans also argued that additional funding for the programs would put more pressure on residents in a time when inflation is high and some economists are predicting a coming recession. 

State Rep. Tammy Nuccio, R-Tolland, said the legislature’s fiscal analysts had said in an email that the increase in spending in the current budget would not be sustainable. 

“We’re capitalizing on inflation. We’re capitalizing on the hurt people are feeling with the increase in spending,” said Nuccio. 

The pandemic pay provision includes $30 million for pay for all “essential workers” who work for private companies throughout the state. Walker said the amount that workers receive will depend on the number of who apply for the funds. Full-time workers can receive between $200 and $1,000, and part-time workers will receive $500. 

But Polletta argued that $30 million is not enough to give a meaningful bonus to all the workers who continued going to work in person throughout the pandemic. He also argued that the budget did not include anything specific for teachers. 

Walker pointed out that the budget increases funding for public schools, including charter and magnet schools, and invests in teacher development. It also includes $75 million for school air quality, scholarships for minority teachers and doubles the funding for bilingual education.

The budget adds an additional $40 million to payments in the Unemployment Insurance Trust Fund, which will bring the total payments into the fund to $195 million, out of a $495 million deficit. Republicans said they wanted to see more money paid into the fund, and that they were concerned that it would become a strain on small businesses. 

“Relief” vs. “Investments”

Republicans said Connecticut needed to take advantage of the windfall of federal money and sales tax revenue they said should be returned to residents because they were driven by inflation that is already straining their finances. 

In the Senate, Republicans said they had been left out of budget negotiations, and weren’t able to advocate a proposal they said would cut taxes by $1.2 billion – which the Senate voted down as an amendment to the budget Tuesday night.

“The underlying budget does not provide sufficient, immediate and targeted relief to middle-class families across Connecticut, including in my district, who are hurting, especially because of the historic rise in inflation,” State Sen. Ryan Fazio, R-Greenwich, said. 

Democrats said the budget was responsible, and balanced tax relief with programs that aim at structural issues. State Sen. Saud Anwar, D-South Windsor, said the budget finally created a plan to address lead, and was “systemically addressing” poor indoor air quality in schools, both issues that are harming children.

“Can we just give more tax breaks at the cost of a generation of children not having the full potential of their IQ?” Anwar said. “I don’t think it’s a good deal if we do that.”

Sen. Marilyn Moore, D-Bridgeport, said the investments in early childhood education in the budget would let parents go to work without worrying about their child, and would start helping children learn and build for the future.

“Poverty begins in the womb, depending on who your parents are – and when that child leaves the womb, you want to give it everything you can,” Moore said. “And that’s where equity comes in – where you’re giving them everything you can for them to be successful.”

Calls for a broader budget conversation 

State Sen. Dennis Bradley, D-Bridgeport – the lone Democrat to vote against the budget adjustment – criticized Gov. Ned Lamont’s leadership on the budget. He said Lamont didn’t start the negotiations with a vision for reviving Connecticut’s cities through infrastructure. 

“I think it comes from how we start this conversation, and I don’t hear an urban agenda in our budget,” Bradley said. “I hear wonderful programs that will be allocated funds, but I don’t see a vision with what we’re going to do with our urban areas.”

State Sen. Paul Formica, R-East Lyme, said Republicans were left out of the conversation with their ideas for middle-class tax relief. Formica said lawmakers need to think about what is going to happen in the future when Connecticut faces deficits that it won’t be able to fix with one-time infusions of federal money.

“My hope is that, whatever happens with this vote on this budget – I’m sure it will pass – that the lessons moving forward as the budget gets implemented, is that we work together, that this body continues to grow together, and share and listen to the ideas that each of us have,” Formica said.

Editor’s Note: This story was edited to clarify that State Rep. Devin Carney was referring specifically to motor vehicle taxes