Gov. announces tax cut plan for middle class, working families

EAST HARTFORD, CT (WFSB) - Connecticut’s governor announced a proposal he said will provide tax relief to middle class and working families.

Gov. Ned Lamont participated in a news conference Monday morning during which unveiled the details.

According to the Lamont Administration, Currently, single (joint) filers pay a 3 percent state personal income tax on their first $10,000 ($20,000) of adjusted gross income and a 5 percent tax on income up to $50,000 ($100,000).

Instead, the governor proposed to permanently lower the 5 percent rate to 4.5 percent and the 3 percent rate to 2 percent beginning with income year 2024. He said it would save taxpayers $440 million annually. Depending on adjusted gross income, some joint filers could receive almost $600 in income tax relief and single filers could save almost $300. In total, about 1.1 million of the state’s 1.7 million tax filers would see some amount of relief under the plan.

If approved by lawmakers, the proposal would become Connecticut’s first income tax rate reduction since 1996 and the largest rate reduction since the income tax was implemented in 1991.

“I want to cut taxes for the middle class,” Lamont said. “When I took office four years ago, the state was operating under a $3.7 billion deficit and analysts were projecting more deficits for many years to come. For the sake of our economic growth, I made it a top priority of my administration to turn that instability around. Four years later, we now have a surplus that we achieved without implementing broad-based tax increases, and at the same time we’ve been making historic investments in our pension obligations while leaving the rainy day fund untouched. Today, Connecticut’s fiscal health is stronger than it’s been in decades. Considering the state’s strong financial position, it is time to provide tax relief for Connecticut’s residents.”

Lamont plans to introduce the proposal during the 2023 legislative session on Wednesday. A budget address is planned for noon.

He said it is one of several tax relief measures he plans to include in his fiscal years 2024 and 2025 biennial state budget proposal.

“This budget that I am presenting to the legislature provides a smart, strategic, and fiscally-sound plan to provide meaningful tax relief while also maintaining our overall budget discipline so that we can keep Connecticut’s fiscal health strong for many years to come,” Lamont said.

With the state in its best financial shape in years, Lamont is ready to give Connecticut residents a permanent tax cut.

“The personal income tax change affects 1.1 million filers which is 63-percent of the 1.7 million filers. The earned income tax credit which we announced just the other day affects 211,000,” said Jeff Beckham, OPM Secretary.

Republicans have been pushing for more tax relief.

“I am very pleased to see the governor is turning his attention to those individuals. We wanted the income tax reductions put on the books last year. Obviously it couldn’t get support and I hope Democrats will be behind this proposal,” said Rep. Vinnie Candelora.

The governor will be highlighting these tax cut proposals in his State of the State Address this Wednesday.

If these proposals pass the legislature, they will take effect next year because tax laws will need to be changed.

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