MILFORD, Conn. (WTNH) — With inflation still squeezing state residents and a recession remaining a worry, Gov. Ned Lamont said the state needs to step up and help families and small businesses.

Monday, he pitched his tax break that he claims would impact hundreds of thousands of families in Connecticut.

Within the $50 billion budget lies $500 million in tax relief. Lamont called his Monday proposal the largest tax cut in state history.

“It’s a sound investment,” Lamont said.

The Democrat hopes to return millions of dollars to families and small businesses.

“A permanent tax cut, a sustainable tax cut, a tax cut you can count on, a tax cut that’s going to mean $50 a month extra for most of you,” Lamont said.

If approved, his proposal would eliminate income tax for households earning below $50,000 a year and give a 20% break to those making under six figures.

Lamont said the proposal would also help small businesses by restoring a larger tax credit, saving small firms, like Static Era Records, thousands.

“It’s huge. It’s a big positive for us,” said Jay Reason, who owns Static Era Records Owner.

The record shop opened during the height of the pandemic. Reason said he just resigned its lease in downtown Milford for another three years.

While lawmakers said Connecticut has had a tough reputation for supporting businesses, Reason doesn’t agree and says the proposal helps even more.

“That’s so important for us to just have new inventory,” Reason said. “If anybody who follows records knows, there’s tons of new stuff that comes out every week. We’re buying stuff continuously, so a few hundred dollars goes a long way, especially if we are buying used inventory or we’re trying to do some ads, or I’m doing the label, too, so it all helps.”

The proposal must pass through the General Assembly before it goes into effect.

Republican leaders said Connecticut families are dealing with inflation challenges, living paycheck-to-paycheck, and more needs to be done.

Senate Republican Leader Kevin Kelly sent News 8 a statement saying, “Republicans view the governor’s tax relief proposal as a good start toward helping families who are feeling the pain at the pumps, at the supermarket, and when they open their energy bills. But we can do better. Senate Republicans proposed $1.2 billion in tax relief last year, but our plan was rejected by majority democrats.”

Lamont said Connecticut is positioned better than any other state in the country if faced with recession.

A vote on the budget proposal is expected in May.