The Connecticut House of Representatives overwhelmingly passed a two-year, $51 billion state budget early Tuesday that includes a historic cut to the state’s personal income tax.
The budget package passed 139-12 in the Democratic-controlled House with strong bipartisan support after a nearly three-hour debate that started late Monday. The Senate, also controlled by Democrats, will have to pass the same bill before the General Assembly adjourns its 2023 session at midnight on Wednesday.
First proposed by Democratic Gov. Ned Lamont, the planned tax reduction is predicted to benefit approximately 1 million of the state’s 1.7 million tax filers by permanently lowering marginal rates for the first time since 1996. It’s being billed as the largest reduction since the tax was first implemented in 1991.
“This budget will deliver the largest personal income tax cut in the state’s history,” Lamont said in a written statement issued before the vote. “This is not a temporary tax cut – it is designed to be sustainable for years to come.”
Republican House Minority Leader Vincent Candelora welcomed the income tax cut, even though the GOP had wanted more tax relief, including for the business community.
The Connecticut state capital is pictured in Hartford, Connecticut. The state’s House of Representatives passed a two-year, $51 billion budget on June 6, 2023. (Rolf Schulten via Getty Images)
“Of course we’re going to say it never goes far enough because Connecticut is a very unaffordable state,” he said. “But it makes an effort. It’s recognizing the middle class needs relief.”
The two-year tax-and-spending package also boosts state aid for local school districts; funds the “baby bonds” program that sets aside up to $3,200 for low-income infants; increases rates for ambulance services; expands an anti-gun violence program to two more cities; increases pay for inmates; provides funding for striking group home workers; and includes additional funding for nonprofit social service agencies and state colleges and universities, even though advocates contend it’s not enough considering the state’s resources.
Last week, state Comptroller Sean Scanlon projected the current fiscal year, which ends June 30, will end with a $1.6 billion budget surplus, an increase of $16.1 million from May.
“A 2.5% increase is insufficient and the state has the ability to do more for hundreds of community nonprofits and the 500,000 people they serve,” said Gian-Carl Casa, president and CEO of CT Community Nonprofit Alliance, which represents agencies that provide services ranging from mental health and substance abuse treatment to homeless shelters and prison reentry programs.
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The new budget, when signed into law by Lamont, will take effect on July 1.