CT Budget Deal Has Largest Income Tax Cut In State History: Lamont

CONNECTICUT — State legislators this week passed Connecticut's biennial budget for the 2024 and 2025 fiscal years, which contains the largest income tax cut in the state's history, according to Democratic Gov. Ned Lamont and state officials.

The state House passed the $51.1 billion budget early Tuesday, 139-12, while the state Senate approved it later in the day by a vote of 35-1.

"We are delivering the largest cut to Connecticut’s income tax rates in state history," Lamont said in a statement Tuesday late afternoon. "We are able to do this as a result of the fiscal discipline that we implemented over the last several years that turned around what some once labeled a permanent fiscal crisis and has ended years of instability and deficits. The fiscally responsible policies that we enacted over these last few years were done with the goal of getting us to where we are today. I feel very good knowing that here in Connecticut we can successfully work across the aisle in a bipartisan manner to do what is right for the residents of our state. I thank the leaders of both parties for working with my administration to get this biennial budget approved, and I applaud all of the lawmakers who saw to it to vote in its favor and send it to my desk."

The budget calls for $25.1 billion in state spending in the first year, and $26 billion in the second year.

Middle-class residents will be the beneficiaries of the tax relief, which in some cases will see taxes cut by nearly 50 percent for single filers, and an even higher percentage for some joint filers. (See the tables below on how much you may save).

"The broad-based middle-class tax relief included in this budget agreement is the direct result of the fiscal guardrails that have transformed our fiscal outlook over the last five years and that were extended earlier this session unanimously," said Office of Policy and Management Secretary Jeffrey Beckham. "Governor Lamont has been clear about what he wanted to see in this budget – sustainable and broad-based tax cuts, adherence to the fiscal guardrails, and sustainability in the outyears. This budget accomplishes those goals, providing predictability and stability for essential services in future years."

Members from both political parties strongly voted in favor of the budget, which includes $800 million in tax relief.

"For more than a decade, middle class residents have been targeted with taxes and fees that have pushed them toward the brink of affordability," said House Minority Leader Vincent Candelora, a Republican who represents the 86th District. "That's why this budget is so important—by offering the first income tax cut in decades, we're taking a critical first step on the road to offering sustainable and structural tax relief that will reduce the cost of living here."

According to Republicans, the budget:

Decreases the bottom two marginal income tax rates from 3 percent to 2 percent, and 5 percent to 4.5 percent. Additionally, the bill extends the eligibility of the tax exemption on pension, annuity, and IRA income, smoothing the benefits cliff by gradually reducing the exemptions for single filers earning between $75,000 and $100,00 and joint filers earning between $100,000 and $150,000. The change is effective in 2024.

Lamont added that the budget:

Increases to the Earned Income Tax Credit for low-income working individuals and families, while also providing significant increases in funding for K-12 education, child care programs, affordable housing units, and nonprofit providers.

"This Democratic led bipartisan budget is laser focused on helping middle class and working class families," said Senate Majority Leader Bob Duff, a Democrat. "This budget delivers tax cuts, education funding, support for towns and cities, and increases for non-profits--all areas which will benefit Connecticut families. We are accomplishing all of this progress while staying within the spending cap, paying down long-term debt, and saving for a Rainy Day."

Click here to view the budget bill, H.B. 6941.

— Tables via State of Connecticut