HARTFORD, Conn. (WTNH) — Connecticut Gov. Ned Lamont said Wednesday that an agreement has been reached with Democratic leaders in the legislature to extend the state’s gas tax cut until Dec. 1.

The deal is part of a $24.2 billion state budget that must still be voted on in the coming days by the Democratic-controlled General Assembly. A deal was reached on the budget Wednesday.

The video above is from a previous newscast.

The 25-cent-per-gallon state gas tax holiday was set to expire on June 30 to give motorists some relief at the pump.

The extension of the state’s gas tax holiday will cost $150 million from the state’s special transportation fund, according to Lamont.

The governor announced $500 million in tax cuts as part of the budget. Republican leaders say if they were part of negotiations, more money would be given back to residents.

Along with the gas tax cut extension, the $500 million in tax cuts covers:

  • Property tax credits of $300
  • Temporary child tax credit of $250 per child for those making under $100,000 or $200,000 jointly
  • Temporary expansion of the earned income tax credit for working poor
  • Car tax reduction for 1/3 of the state
  • No income tax on pension/401(k) plans for retirees

⁩Free bus service across the state is still set to end on June 30.

The budget package has no tax increases. The state has a massive rainy day fund, with a billion in increased revenues because everyone has been paying more to buy goods as a result of inflation.

There is also the ability to dip into federal COVID relief money.

The deal covers education, mental health and social services.

“We’ve got a budget on time with tax cuts and investments and important social programs that we’re doubling down on,” said Governor Ned Lamont.

The chair of the tax-writing Finance Committee said some of the relief will be immediate.

“We hear you Connecticut, we hear you that you want help, that you want Connecticut to be more affordable and this package delivers. Cutting property tax credits, cutting car taxes for half of the towns. We are delivering for the first time ever a child tax credit,” said State Rep. Sean Scanlon.

Republicans say residents are being overtaxed and the Democrats could have given back more.

Democrats say that would be irresponsible.

“Just to give a tax break to people only with children is shortsighted. It’s everybody that’s suffering whether you’re 18 years old or 75 years old, we need broad-based relief,” said State Rep. Vincent Candelora, the Republican House Minority Leader.

Republicans want to join 18 states who have sued the Biden administration in federal court claiming that just because a state takes federal COVID relief money, it does not mean they have to be held to a tax cut “cap.”

State Sen. Kevin Kelly, the Republican Senate Minority Leader, said they are waiting to hear from the federal appeals court.

“The Republicans in Connecticut are standing with the people and we will continue to fight for the people who we believe are paying too much in taxes,” Kelly said.

Some of these tax cuts, like the child tax credit and the earned income tax credit, will be temporary. Aid to cities and towns is fully funded.

Lawmakers are expected to vote on the budget Monday.

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