HARTFORD, Conn. (WTNH) — Lawmakers in charge of Connecticut purse strings are running up against a deadline. They voted mostly along party lines with Democrats pushing to pass the massive tax cut package. There was some wrangling among Republicans and Democrats over how to pay for the tax cuts.

Republicans say violating a revenue cap is a “poison pill.” Democrats on the tax-writing committee say the idea of paying for cuts by using reserves is okay, adding they are meeting the moment for struggling families.

Republicans say Connecticut families need relief now, but they don’t agree that violating the revenue cap, a bipartisan measure put in place five years ago that created a financial cushion, is the way to pay for tax cuts. State Rep. Laura Devlin, the declared Republican candidate for lieutenant governor, is leading the charge.

“We have this cushion if you will. By putting in more new programs that there are going to be long-term liabilities for our state, it removes that cushion.”

Republicans say while they like the new programs like childcare, they are unsustainable. Democratic leaders, however, disagree. They say available funding is not going to dip too deep into reserves.

State Rep. Sean Scanlon, the Democratic Chair of the Finance, Revenue and Bonding Committee, says creating the state’s first-ever child tax credit is a big deal.

“It is the single biggest tax cut we’ve ever had in Connecticut for the most amount of people,” Scanlon said. “And I do believe truly it would make a big difference for the families of Connecticut that are hurting right now.”

If passed, the tax-cut package would also include other items:

  • $300 million in child tax credits
  • $120 million in property tax cuts
  • $42 million in earned income tax credits for the working poor

Relief in some of the programs wouldn’t start until 2024 because federal rules only allow for restoring services affected by the COVID-19 pandemic — not cutting taxes.

“We wish we could do it sooner,” Scanlon said. “I think everybody, whether you’re a Democrat or Republican, wants to cut as much tax as we can, but unfortunately, our hands are tied.”

Republicans say low and middle-income households pay the highest percentage of their income in taxes.
They would rather pay for temporary tax cuts with the windfall of sales tax revenues and not dip into reserves.

State Sen. Henri Martin the Republican Ranking Member on the Finance Committee suggests, “Let’s do it for a limited amount of time, and let’s assess when we get close to the debate as to where we are going financially.”

Gov. Ned Lamont wants to fulfill an old 2018 campaign promise to expand property tax credits from $200 to $300 and agrees with Republicans.

“We know how to live within our means,” Lamont said. “We got a $400 million tax cut. We’ve got $100 million more for child care and for mental health. We’re doing a lot. I don’t think it’s necessary to break the spending cap or the tax cap.”

Negotiations with the Lamont administration on a final tax cut package will continue.

The Finance Committee also approved a bond package that will fund future projects around the state by selling bonds on wall street to the tune of $165 million in new authorizations, for a total of more than $2 billion for FY2023.

The committee deadline is 5 p.m. Thursday.