Gov. Ned Lamont (D-CT) signed his state's next two-year budget into law on Monday. The budget contains major cuts to personal income taxes.
The fiscal years 2024 and 2025 biennial state budget agreement was reached between Lamont and the state legislature last week, and it includes the largest income tax cuts in Connecticut history.
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House Bill 6941 includes an expansion of child care, developments of debt-free community college, free workforce training, rent relief, and several other tax relief measures for Connecticut residents.
“Our budget delivers on key investments in child care and K–12 education, special education, gun violence prevention hospitals, and federally qualified health centers, housing transportation, and workforce transportation,” Lt. Gov. Susan Bysiewicz said during the signing ceremony at the state Capitol.
Connecticut Democrats announced that the tax cuts in the budget will save taxpayers an estimated $460 million a year while paying down the state’s debts.
Tax relief measures include a tax cut for the middle class and an increase in earned income tax credit from the current rate of 30.5% of the federal credit to 40% for low-income workers.
Democratic lawmakers touted several notable education investments in the budget, highlighting the post-pandemic need to issue new money to multiple learning programs.
“We have more funding for secondary education, more funding for higher education, and more funding for our municipal governments,” said state Senate Majority Leader Bob Duff. “That clearly and squarely helps the middle class here in the state of Connecticut.”
While the budget was a bipartisan effort, some Republican lawmakers believe the tax cuts included in the legislation could have been stronger.
"Last month, Senate Republicans offered a '$1.5 Billion Back Budget,' the largest proposed tax cut in Connecticut’s history," state Senate Republican Leader Kevin Kelly said in a statement to the Washington Examiner. "We pushed back on Democrat attempts to dismantle the bipartisan spending caps and budgetary guardrails that helped create our current surplus and reduce debt."
Kelly added that the tax relief provided in the fiscal plan "was largely driven by the hard work of Senate Republicans, who succeeded in getting broad-based income tax cuts into this year's budget after conversations that started last spring."
Lamont applauded the Democratic and Republican lawmakers for working together to create the $51 billion two-year state budget.
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“What this says about the state, look around the rest of the country,” Lamont said. “I like the way Connecticut led today.”
State Comptroller Sean Scanlon predicted a $1.6 billion budget surplus at the end of the fiscal year in a monthly financial and economic update. The budget takes effect on July 1.