CT drops $200 rebate checks, but property tax relief could be on the way
Schools and local governments would get a $270 million cash infusion under a tentative state budget deal announced on Tuesday. Gov. Ned Lamont and top lawmakers hope it will lower property taxes.
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If you were expecting a $200 rebate check this fall, you’re out of luck.
The checks were dropped from a tentative state budget deal announced by Gov. Ned Lamont and top Democrats on Tuesday.
But even without the rebates, you could still save money.
PROPERTY TAX RELIEF
Sick of your property taxes going up?
To get them down, the budget deal sends an additional $270 million to local schools and aid to towns and cities. Of that, $170 million is a permanent increase in the per-student base funding, while $100 million is a one-time “stabilization” grant from the Mashantucket Pequot and Mohegan Fund, which distributes casino revenues from Connecticut’s two tribal nations.
Most the one-time cash infusion will go to distressed districts like Bridgeport, Hartford and Hamden – all of which are facing steep education cuts.
“We’re at the bare bones right now,” said Bridgeport City Council member Jeanette Herron.
Local governments will have the option of lowering property taxes – even if they already passed a new budget.
"They can adjust their mill rates,” said Connecticut House Speaker Matt Ritter (D-Hartford). “They’ll be allowed to actually literally say, ‘Because of the state, your mill rate is lowered and your tax bill is lower. For July 1.’”
Bigger changes to the state’s Education Cost Sharing (ECS) formula will have to wait until next year, when Lamont’s new Blue-Ribbon Commission on K-12 Education Funding and Accountability recommends an ECS overhaul.
“This additional investment of $270 million represents an important and welcome step toward addressing the growing fiscal pressures facing municipalities, school districts and local taxpayers,” said Joe DeLong, executive director of the Connecticut Conference of Municipalities. "We look forward to continuing to work in partnership with state leaders to build on this progress and ensure long-term fiscal stability for all of our communities.”
CHEAPER CHILDCARE
Parents could save money on childcare, too.
The budget agreement puts an extra $300 million into Lamont’s Universal Preschool Fund. For thousands of families, preschool would cost no more than $20 a day.
“You’ve got one or two little ones and it could save you $15,000 a year,” Lamont told reporters. “We’re doing everything we can because I know how expensive life is right now.”
Lawmakers invested an initial $300 million in the endowment last year. Later this decade, the governor hopes to provide free preschool for families earning less than $100,000 per year. For families making up to $150,000, costs would be capped at 7% of their annual income.
“If you’re raising a young child in the next five years, and the state could somehow continue this and get to a point where we had an endowment to pay for all or most of your child care, it would be the single biggest check you ever got in your life from government,” Ritter said.
NO TAX CUTS OR REBATES
One thing not this budget agreement? No broad-based state tax cuts and no rebate checks.
“That’s been replaced by what you get in savings from your electric bill plus your property tax and education,” Lamont said.
Lawmakers from both parties wanted to eliminate the sales tax on clothes under $100 and trim the meals tax at grocery stores. Progressive Democrats also pushed for a child tax credit for parents, while Republicans wanted to more than double the state property credit to a maximum of $650.
“I’m disappointed that we don’t have a property tax rebate that can be permanently baked into the budget,” said House GOP leader Vin Candelora (R-North Branford). “Every community over the last 20 years has shifted a larger portion of their budget onto property taxes because Connecticut is failing to keep up with inflation.”
“VOLATILE” REVENUES
So how are lawmakers paying for all this new education spending? That’s controversial.
The money comes out of a new $750 million Affordability Fund, set aside from “volatile” revenues that are typically off-limits – and don’t count against the state spending cap. Those revenues are expected to be higher this year because of a strong stock market.
GOP leaders called it a budget gimmick.
“They wanted to fund it by surplus and that surplus has evaporated,” Candelora said. “So now they’re going to use volatile money this year to try to prop it up.”
Republicans aren’t happy about that but said they might support the budget anyway.
“There could be Republican votes,” Candelora said. “I wouldn’t call this a bipartisan document.”
WHAT’S NEXT?
Lawmakers expect the budget agreement to be finalized as early as Wednesday, with votes likely on Monday and Tuesday.
The legislative session ends next Wednesday.
