The Connecticut Senate sent Democratic Gov. Ned Lamont’s office Tuesday night a revised $24.2 billion one-year state budget that Democrats called historic but Republicans called insufficient for taxpayers.
While the plan cuts taxes by about $600 million and earmarks more money for some grassroots initiatives, including a major mental health care initiative, only two Republicans in the House and Senate — the Senses. Kevin Witkos of Canton and Heather Somers of Groton — voted for the deal brokered between Lamont and Democratic leaders in the General Assembly.
GOP leaders said the level of tax relief was disappointing given the state’s projected $4.8 billion surplus and that lawmakers should have made systemic changes to Connecticut’s tax system.
“Six hundred million dollars is a drop in the ocean compared to the economic harm Connecticut families have suffered under this majority,” said Senate Minority Leader Kevin Kelly, R- Stratford, referring to the Democrats, who control the General Assembly. Republicans proposed an amendment to cut taxes by about $1.2 billion, including sales and income tax cuts, but it was defeated on party lines.
Only one Democrat in the General Assembly, Senator Dennis Bradley of Bridgeport, voted against the package.
Democrats have argued that federal rules on how states can spend pandemic relief funds have limited the amount of states that can cut taxes. But Kelly, citing data recently released by the legislature’s nonpartisan tax office, said Connecticut would be able to cut up to $1.4 billion in taxes. The budget bill includes more than $1 billion in funds from the American Rescue Plan Act.
Democrats have strongly defended the plan, which takes effect July 1. They said he was responsible, prudent and balanced, devoting state resources to address major issues identified during the COVID-19 pandemic. These include mental health services for children, poor air quality in schools, various labor shortages, and financial challenges facing child care programs.
“This is a human budget, a responsive budget, that responds to the needs and aspirations of the people of the State of Connecticut,” said Senate Speaker Pro Tempore Martin Looney, D-New Haven. . “We are not people who turn a blind eye to the needs of others.”
The Senate vote comes just over 24 hours before the end of the legislative session on Wednesday at midnight.
Here are some highlights of the bill, which revises the second year of the biennial budget passed last year:
TAX CUTS IN CONNECTICUT
The list of tax changes includes a continuation of the gas tax reduction of 25 cents per gallon and free bus service through December 1; the creation of a new tax credit of $250 for one-year child care in the form of a refund; the accelerated elimination of taxes on retirement, 401K, and annuity income beginning with the 2022 tax year; a lower limit on local car taxes that applies to 75 communities; and an increase in the local property tax credit on personal income tax, from $200 to $300, which applies to more taxpayers.
Beginning with the 2023 tax year, the bill increases the state earned income tax credit from 30.5% to 41.5% of the federal credit, which is available to workers in modest means. It also creates a new $2,500 personal income tax credit for taxpayers who had a stillborn child who would have been claimed as a dependent, affecting approximately more than 100 families a year.
The bill also eliminates the 6% admission tax on movie tickets. Sen. John Fonfara, D-Hartford, said the industry had “taken it on the chin” and noted that the number of movie theaters in Connecticut had dropped from 61 to 50 during the pandemic.
PAYMENT OF THE PANDEMIC PREMIUM
The bill creates a new Connecticut Premium Pay bonus program for private sector workers who were on the job throughout the period of the Lamont public health and preparedness emergency. Eligible workers are those included in Phases 1a and 1b of the recommended rollout of COVID-19 vaccinations by the US Centers for Disease Control and Prevention. They would receive a range of $200 to $1,000 depending on their income. Eligible part-time workers will receive $500 under the program, which will be administered by the state comptroller.
The plan reduces the state’s unfunded pension liability by $3.5 billion. Additionally, $40 million in federal pandemic funds are being used to pay down an estimated $493 million in debt from the state’s unemployment trust fund. This is in addition to $155 million in federal funds deposited last year, aimed at reducing the burden on businesses to cover the costs.
MENTAL HEALTH AND OTHER EXPENSES
The proposal includes additional funding for various mental health and addictions treatment and support services, including money for statewide 24/7 mobile crisis services and services for kids. There is also funding for school readiness programs and child care, including “emergency stabilization” grants; more than $220 million in new funding for nonprofit social service organizations; free menstrual products in washrooms used by students in grades 3-12; and increased funding for special education and bilingual programs.