$24B proposal cuts some income taxes, taps reserves to boost spending for CT’s recovery from pandemic
Gov. Ned Lamont delivering the 2022 state of the state address in the state Capitol in Hartford.(Yehyun Kim, CTMirror.org)
HARTFORD, Conn. — Gov. Ned Lamont proposed a new state budget Wednesday that shifts hundreds of millions of dollars in federal pandemic relief outside of normal appropriations, funds a middle-class property tax relief program and makes major new investments in social services, health care, education and economic development.
After remaining quiet on the question of hazard pay for nearly two years of the coronavirus pandemic, Lamont pitched $20 million for bonuses for front line state workers who were at risk during the pandemic.
On paper, the $24.2 billion plan Lamont offered for the next fiscal year increases General Fund spending by 2.5% over the preliminary plan for 2022-23 that he and the legislature enacted last June. And it’s 8% higher than approved spending for the current fiscal year.
But neither of those figures takes into account a larger plan to free up hundreds of millions federal pandemic relief that Lamont also would now wants spend in the coming fiscal year.
That would effectively elevate the proposed spending increase beyond $2 billion, or 10%.
But even given the proposed surplus spending, Lamont said the current budget is on pace to finish June 30 with more than $1.2 billion left over that could be used to pay down pension debt.
“Budget deficits have become record-breaking surpluses, our budget reserve fund is now overflowing, and we are able to pay down our pensions, borrow more money at less cost and return millions of dollars to middle-class families for the first time in a generation,” Lamont said Wednesday in his annual budget address.
“Just as I wouldn’t let the state be defined by a chronic fiscal crisis, I will not allow it to be defined by a COVID crisis. Despite the intense headwinds of a global pandemic, we have made significant progress with more jobs created, more families moving into our state, and more opportunity for all.”
“Our working families and middle-class households deserve a break, especially from Connecticut’s most regressive tax,” Lamont said. “Property taxes relentlessly come due in good times and bad, and they hit the middle-class especially hard.”
The governor would lower the current cap on municipal tax rates on passenger and commercial vehicles from 45 mills to 29 mills (one mill equals $1 in tax per $1,000 of assessed value). And while only eight of the state’s 169 cities and towns currently levy tax rates above 45 mills, the lower threshold would affect 103 communities.