NEW HAVEN, Conn. (WTNH) — The Connecticut Senate voted 35-1 to approve the state’s next budget on Tuesday, passing it now to Gov. Ned Lamont for his signature.
The $51.1 billion budget also includes what is being called a historic cut to the state’s personal income tax.
The budget package passed 139-12 in the Democratic-controlled House with strong bipartisan support after a nearly three-hour debate that started late Monday.
First proposed by Democratic Gov. Ned Lamont, the planned tax reduction is predicted to benefit approximately one million of the state’s 1.7 million tax filers by permanently lowering marginal rates for the first time since 1996. It’s billed as the largest reduction since the tax was first implemented in 1991.
“I’m really proud of the legislature,” Lamont said at an event Tuesday morning in Branford. “The incredibly hard work they put in on a bipartisan basis, we worked together. We got an honestly balanced budget done on time, respected the fiscal guardrails, and biggest tax cut in history.”
The tax cuts will begin in January 2024.
For the fiscal year of 2024, the budget is $25,114,806,026, and for the fiscal year of 2025, the budget is $25,999,681,931.
The plan lowers the 5% marginal income tax rate to 4.5% and the 3% rate to 2% for the income year 2024.
The earned income tax credit is at its highest historical level, which will help the lowest-earning workers and families in the state. Combined with personal income tax cuts, families of four with incomes up to $50,000 will not pay state income taxes.
“Obviously, we’re very pleased that we’re the tax initiatives that House Republicans wanted, the governor wanted are still in this budget,” said State Rep. Vincent “Candelora, (R) Minority Leader. “Even some of the spending and the reductions to the size of our agencies are in there, which is what we also wanted.”
The budget also contains an increase in funding of $135 million for the Connecticut State Colleges & Universities system. In February, UConn students protested at the capitol against what they saw as cuts in state support for the university.
“Hundreds of millions of dollars above what the governor is for UConn and CSU combined. Hundreds of millions, yes,” Ritter said.
The budget will expand debt-free community college, increase funding for special education to local schools, increase childcare provider rates, and invests over $240 million in public education for the 2024-25 school year.
Education funding also includes:
- $158 million in new funds to local boards of education
- $9.3 million in new funds for Charter Schools
- $53.3 million in new funds Magnet School
- $11.4 million in new funds for Open Choice
- $7.2 million in new funds for Vocational Agriculture programs
Regarding safety net services, funding is provided to non-profit providers and striking group home employees. The Medical Debt Erasure will wipe out up to $1 billion of medical debt, and people no longer qualify for Medicaid will be provided two months of premium assistance to enroll on the exchange.
Towns will also receive more funding for local schools, special education, and choice tuition assistance. PILOT payments will be increased by 3%, and funding will be provided for grants to implement early voting.
While there is no funding in the budget for waste, $500 million is in bonding through the Green Bank for new trash facilities.
When signed into law by Lamont, the new budget will take effect on July 1.
Stay with News 8 on-air and online for the latest developments.