Minority Republicans in the state House of Representatives challenged Democratic lawmakers and Gov. Ned Lamont on Tuesday to rethink their approach toward helping middle-class families struggling with Connecticut’s high cost of living and federal budget cuts.
Rather than spending as much as $500 million in state funds to offset federal cuts to nutrition programs, health care and energy assistance, GOP leaders asked, why not cut state income tax burdens by as much as $700 per filer?
“Property taxes driven by revaluation are crushing Connecticut’s middle class, yet our Democratic colleagues ignore this crisis while pushing policies that increase costs,” House Minority Leader Vincent J. Candelora, R-North Branford, said.
House and Senate Democratic leaders want to use $500 million from last fiscal year’s $2.5 billion surplus — the second-largest year-end cushion in state history — for a response fund.
“We believe that is not prudent,” Candelora said, adding that if the surplus won’t be used entirely for its chief purposes — to shrink pension debt and maintain budget reserves — then it should finance relief for the middle class.
The House GOP specifically wants to bolster an existing credit that offsets up to $300 in property tax burdens for an estimated 873,000 taxpayers.
Individuals earning less than $49,500 per year and couples making less than $70,500 receive the full credit, according to state tax rules. Singles earning between $49,500 and $109,500 and couples making between 70,500 and $130,500 are eligible for a partial credit.
The House Republican plan would:
- Boost the maximum credit to $1,000;
- Boost the annual income eligibility limits to $130,000 for singles and $200,000 for couples;
- And guarantee that no eligible filer receives less than $400.
“Our plan is straightforward: take that same money and put it toward the largest property tax credit expansion in state history,” said Rep. Joe Polletta of Watertown, ranking House Republican on the Finance, Revenue and Bonding Committee. “That’s how you help people, not by speculating about what might happen down the road and using fear as an excuse to grab money now.”
Connecticut Democrats, who also have been exploring state tax relief to assist low- and middle-income families that would suffer from federal cutbacks, were non-committal in their response to the GOP proposal.
“I am pleased to see House Republicans recognize the Trump administration has created a fiscal emergency that must be addressed,” House Speaker Matt Ritter, D-Hartford, said.
“Gov. Lamont is supportive of policies or ideas that make life more affordable and reduce burdens on middle-class and working families, and that includes through property tax relief while also supporting key social service programs … that have unfortunately been impacted by Republicans in Congress,” Lamont spokesman Rob Blanchard said Tuesday.
Lamont signed the largest state income tax cut in state history into law in 2023, a plan that added about $300 annually to many middle-class households’ refunds.
But many Democrats also say tax relief can’t be the only solution, given that several Washington-funded relief programs were stalled by the Oct. 1 federal government shutdown, or from ongoing budget cuts ordered last July by Congress and President Trump.
Many of those ongoing cuts don’t take effect until 2026 or 2027.
But the shutdown triggered by congressional gridlock over the budget debate already has created a host of short-term threats.
The Special Supplemental Nutrition Program for Women, Infants and Children — commonly known as WIC — already is out of money. Connecticut, which administers the federal program here, is fronting the $6 million needed monthly to maintain aid to about 52,000 infants, older children and women.
The Supplemental Nutrition Assistance Program, commonly known as SNAP, which provides about $72 million in nutrition assistance to more than 391,000 Connecticut residents monthly, runs out of reserves in early November, according to the Lamont administration.
The same is true for the state’s winter heating assistance program, which is funded chiefly with federal Low Income Household Energy Assistance Program grants. The Lamont administration projects more than 100,375 households will need heating assistance this winter, up more than 12% from one year ago.
Democrats in the General Assembly say they hope to create a short-term response fund to blunt these shutdown-induced program cuts in special session on Nov. 12-13.
And they also want to scale back aggressive budget caps that have generated huge surpluses, averaging more than $1.8 billion per year or 8% of the General Fund, since 2017. Those surpluses have been used to build reserves and reduce pension debt.
But Democratic legislative leaders already have begun the process of shifting about $600 million annually from the must-save category back into the General Fund for use in future years to supplant lost federal revenue.