HARTFORD, Conn. (WTNH) – Gov. Ned Lamont announced his first legislative proposals of 2022 on Wednesday, including a series of tax cuts that will provide millions of dollars in relief for Connecticut residents.

During a press conference, Lamont’s administration announced that approximately $336 million in tax relief will be provided to residents. Lamont said he is proposing the tax cut package as the state is projecting an operating surplus of $1.48 billion.

“When I took office three years ago, Connecticut had a $3.7 billion deficit with projected deficits for many years to come, and for the sake of our economic future I made it a commitment to turn that instability around and strengthen our state’s fiscal health,” Lamont said. “Today, Connecticut has a surplus, and we did it without broad-based tax increases, and while making an historic investment in our pension obligations and leaving the rainy day fund untouched. Connecticut’s fiscal health is stronger than it’s been in decades, and now we can move toward the next phase of the Connecticut comeback – cutting taxes for the people who live here.”

Lamont’s tax cut proposal includes five parts:

  • Restore full eligibility for the property tax credit:

Set to impact approximately 500,000 people. Lamont is asking the legislature to immediately restore full eligibility for the property tax credit beginning in income year 2022. Under the current state law, the property tax credit is limited to those over the age of 65 or those with dependents. Expanding the tax credit to all adults within the current income limits will have an estimated fiscal impact to the state of $53 million, according to the governor’s office.

  • Increase the property tax credit from $200 to $300

It’s estimated to impact 1.1 million people. Lamont is proposing to increase the credit from its current rate of $200 to a maximum of $300 per filer.

  • Accelerate the planned phase-in of the pensions and annuities exemption from income taxes

It is set to impact 250,000 people. Lamont is proposing to accelerate by three years from 2025 to 2022. Under the current state law, the income year 2022 is scheduled for a 56 percent exemption as the fourth year of a seven-year phase-in of the exemption, which is scheduled to reach 100 percent by 2025. Single filers with an adjusted gross income of less than $75,000 and joint filers with less than $100,000 qualify for the exemption.

  • Expand student loan tax credit

It’s estimated to impact up to 32,000 people. Lamont is proposing to expand a student loan tax credit that was adopted in 2019, which gives employers a 50 percent tax credit on up to $5,250 in payments towards an employee’s student loan. The program would several business expenditures alongside the state tax credit to significantly expand eligibility to all loans issued by the Connecticut Higher Education Supplemental Loan Authority.

  • Reduce motor vehicle property taxes

It’s estimated to impact 1.7 million cars, which amounts to 77 percent of cars in the state. Lamont is asking the legislature to approve a law that would lower the mill rate cap on car property taxes from 45 mills to 29 mills and reimburse local governments for the resulting revenue impact.

“These proposals don’t even begin to scratch the surface of lowering the burden of affordability on Connecticut’s families, and small businesses,” said Bob Stefanowski, a Madison businessperson who lost to Lamont in 2018 and recently announced his candidacy for the 2022 election.

“Ned Lamont ran a campaign promising to cut the property tax burden on Connecticut’s working families and small businesses the most,” Stefanowski said. “In fact, to make matters worse, Lamont added $2 billion in tax hikes during his tenure, hurting working families and small businesses the most. Nothing he is proposing today undoes the harm caused to every resident and business in our state.”

Senate Republican Leader Kevin Kelly (R-Stratford) released a statement in response to Lamont’s tax proposals.

“It must be an election year since Democrats are talking about tax cuts. Unfortunately, there is no actual relief here until next year! Connecticut absolutely must look to reduce taxes on residents and make our state more affordable for middle class families. Republicans have long called for relief when it comes to property taxes and taxes on pension in particular. But we also need immediate relief. Inflation right now is crushing family budgets. We must reduce the sales tax now. Promises for future tax credits are welcome, so long as they can be delivered. But we cannot ignore that what families are calling for is real relief now.”

Senate Republican Leader Kevin Kelly (R-Stratford)

House Republican Leader Vincent Candelora also released a statement, saying the following:

“The governor today promised residents relief from the car tax only two weeks after his budget office told cities and towns it would be unable to provide the extra money they’re supposed to receive through the Municipal Revenue Sharing Account — and this is at a time when the state is seeing record revenue collection. With that in mind, I can’t help but feel as though the ‘relief’ package crafted by the governor would point us toward territory that municipal leaders and residents have unfortunately grown accustomed to over the last decade: they’re promised the moon, only to see concepts yanked back entirely or retooled so much that they’re barely recognizable. I hope I’m wrong about that this time around, but the fact that his proposal fails to restore the homeowner’s property tax credit to its highest level is a signal that Governor Lamont continues to have challenges following through on fixing issues that residents care about—in this case, affordability.” 

House Republican Leader Vincent Candelora

The Associated Press contributed to this report.