(The Center Square) – The biggest tax cut in Connecticut history is being delivered to residents.
Gov. Ned Lamont on Monday signed House Bill 5506 into law, the fiscal year 2023 budget adjustment bill, signaling tax cuts that will benefit families, students, and seniors while extending the 25 cents gas tax suspension and free bus transportation through Dec. 1.
“This bipartisan budget gives taxpayers their largest tax cut in history, while paying down approximately $3.3 billion in unfunded liabilities, making groundbreaking investments in child care, crime prevention, environmental protection, and caring for our most vulnerable residents,” Lamont said. “We are transforming Connecticut, making it a place where people and businesses want to grow and set down roots.”
The budget features more than $600 million in tax cuts, which includes providing a $250 per child tax credit for low- and middle-income families while also working to fund payments for the earned income tax credit for eligible households. Under the law, the property tax credit is to increase to $300 from $200. Taxes on pensions and annuities will also be eliminated under the bill.
Lt. Gov. Susan Bysiewicz said signing the bill is the first step to providing tax relief for “working people,” along with the middle class and retirees.
“When Governor Lamont and I took office in 2019, our state was facing a $3.7 billion budget deficit,” Bysiewicz said. “We will be making a historic contribution towards paying down our long-term unfunded pension liabilities, while maintaining one of the strongest rainy day funds in the country. We still have work to do, and the governor and I will continue our work to provide the best quality of life for our Connecticut community.”
Under the bill, 75 cities and towns will reap the benefits of property taxes on motor vehicles being reduced. The towns will be reimbursed for any lost revenue.
Under the law, the state expects additional contributions to the pension funds totaling $3.3 billion, and transferring $1.6 billion to the funds, which is beyond required state contributions. Plus, $5 billion will be allocated to teachers’ and state employees’ retirement systems under the law.
“I think this is a budget that meets the moment,” Lamont said. “This will save $400 million a year for the next 25 years. If there is a recession, we are better prepared for that than ever before.”
The budget adjustment also calls for a $40 million reduction on employers for Unemployment Insurance taxes.
The bill calls for a $100 million investment in child care, and another $25.3 million to increase infant and toddler capacity at state-funded child-care facilities. In addition, special education funding will be increased by $15.5 million.