(WTNH) – When lawmakers go back to the Capitol in January, their focus will be on the governor’s new budget proposal. Lamont reportedly is considering a middle-class income tax cut.
It looks like he has support from both parties. Could the first income tax cut in 30 years come this year?
“The governor and I spoke today. Look, the bottom line is we’re talking about middle-class tax cuts and that’s a great position to be in and to start a session,” said Rep. Matt Ritter, Speaker of the House.
The Democratic Speaker of the House and the Republican Minority Leader are already exchanging ideas.
“We see the recession on the horizon and how are we going to adjust for that? Not to mention, middle-class families are hit with inflation the hardest,” said Vin Candelora, Republican House Minority Leader.
This week, Governor Ned Lamont told reporters he wants an income tax cut. His budget office is pricing it out for those earning $150,000 to $200,000 a year.
“I don’t want to do anything we can’t afford. I don’t want to do anything that leaves us a cliff,” Lamont said.
Candelora says his party pitched the middle-class tax cut idea last session.
“Ultimately, that could translate to about 1,200 dollars per family. So, it’s a significant tax reduction. It’s permanent. It goes into the future. We think it will return back to the state even more money as people are able to stay and afford to live in Connecticut,” added Candelora.
To pay for the cut permanently, other budget items must be trimmed.
The state is flush with cash thanks to a 2017 bipartisan budget that set rules to capture money and divert it to paying long-term debt and filling the rainy-day fund.
It will be a balancing act.
“If we find ourselves doing a tax package that works for one year, but then, you know, folds like a deck of cards three years later, that’s not sustainable,” Ritter said.
Last spring, the legislature passed $600 million in tax cuts, including a child tax rebate, lowering car tax rates, and allowing seniors who earn less than $75,000 and couples earning less than $100,000 to be free of taxation on pensions. The law exempts their Social Security too.
Some want the cap lifted. Instead, a few lawmakers have said they want to exempt all retirement earnings from taxes.
Lamont has also signaled he wants also to lower the corporate business tax surcharge.
The governor presents his budget in February. After that, negotiations begin.