Senate Republicans propose election-year tax cut
Lamont says he’s ‘very likely’ to expand state property tax credit
HARTFORD — Senate Republicans, citing the toll that inflation is taking on state families, on Tuesday proposed a yearlong reduction in the sales tax from 6.35 percent, down to 5.99 percent, with a projected savings of $315 million, amounting to $250 per household.
During a frigid news conference outside the state Capitol, Senate Minority Leader Kevin Kelly, of Stratford, said the projected savings make more sense than possibly increasing the $200 property tax credit that is limited to those over 65, or who have dependents, because it could also put money back into the pockets of those who rent their homes.
Gov. Ned Lamont repeated Tuesday that an expansion of the state’s property tax credit is “very likely” to become part of his budget recommendations next month.
The competing ideas could be haggled over when the General Assembly convenes Feb. 9 for the short budget adjustment session leading into the summer and fall political campaigns.
Kelly said the legislature could put the cut in the sales tax in place as quickly as the second week of the 12-week session. He also called for a suspension of the 1-percent surcharge on restaurant meals.
“Our conversation is to stay focused on the middle class of Connecticut,” Kelly said on the Capitol’s north steps, backed by a half-dozen others in the GOP’s 13-member Senate caucus. “They’re the ones getting hurt the hardest, and that voice needs to be heard whether the Democrats want to hear it or not.”
The property tax, Lamont said, “hits the middle class really hard, and we’re going to get property tax relief through this next session. With a lot of federal resources and additional state resources going to our municipalities that has also allowed them to hold down their property tax or even reduce it as well.”
The property tax credit peaked at $500 per household under Gov. M. Jodi Rell, who served from 2004 until 2011.
Lawmakers may have to tread carefully on the issue of tax cuts because the American Rescue Plan prohibits the use of state and local recovery funds — including $2.8 billion to the state and $3 billion to cities and towns — to cut taxes.
Lamont last week ordered an additional $75 million in federal COVID relief funding to expand the state’s Earned Income Tax Credit for nearly 200,000 low-income households.
“That’s the biggest tax cut for working families that the state has seen in an awful long time,” Lamont told reporters during the Tuesday morning virtual news conference. “I want to make sure that we reward work and people have a good strong incentive to get back to work.”
Kelly said Republican proposals for the budget adjustment session will be expanded as the start of the session gets closer.
“We’ve always stood for tax relief and giving the hard-working taxpayers of the state of Connecticut relief that they haven’t had since 2011,” Kelly said, recalling the tax increases during the first year of the Malloy administration.
“This was a start on tax relief, but we’re not ruling out the property tax or the child credit. But what we wanted today was something that could happen fast and broad-based. This will help every single family in the state of Connecticut, not only those who own real estate.”
State Rep. Sean Scanlon, D-Guilford, co-chairman of the legislative Finance Committee, said Tuesday afternoon that the GOP plan will become part of the mix during the budgetary process.
“I’m glad they are bringing ideas to the table,” Scanlon said in a phone interview. “What the session is going to be all about is whether we can come to a bipartisan agreement on tax reform.”
He noted that the federal tax credit for children that ended with the new year adds impetus to Scanlon’s $300 million plan to restore it for Connecticut families. “Part of what we have to do is look at the ideas. There is urgency, but we have to be deliberate here.”
Senate President Pro Tempore Martin Looney, D-New Haven, said any changes in the state’s tax structure will be reviewed through the prism of the state’s overall financial picture.
“Democrats will be unveiling our own revenue proposals in the coming session, including a look at ways to reduce Connecticut's onerous local property tax burden,” Looney said.
“Therefore, there will be a time for a comprehensive discussion of various revenue proposals and to closely examine questions such as who will benefit most and what Connecticut can afford in both the short term and the long term.”