With inflation at historic highs, Connecticut Republicans pitched deeper tax cuts than their Democratic counterparts on Tuesday. But they also want to spend more – and critics aren’t sure the math adds up.
“We are proposing an historic $1.16 billion of broad-based tax relief,” said state Rep. Vin Candelora (R-North Branford), the House minority leader.
The GOP
budget proposal offers $200 million in additional tax cuts but spreads the relief around to more people than legislative Democrats, who want more targeted help for the working poor.
WHAT DOES IT MEAN FOR YOU?
House Republicans are proposing the same income tax cut as Gov. Ned Lamont – the biggest in almost three decades – but you’d get the money sooner.
The average worker would keep around $300 per year.
“More money to the paycheck is definitely something I'm not opposed to,” said Bryan Sequeria, of Norwalk.
Lamont's tax cut wouldn’t start until next year, but GOP lawmakers want to make it retroactive to Jan. 1. They’d pay for it with $300 million of this year’s record budget surplus.
Under both plans, the bottom two tax brackets would drop from 3% to 2%, and 5% to 4.5%. The Legislature’s tax-writing committee trimmed Lamont’s cut to 4.75%.
OTHER TAX CUTS
House Republicans also want to kill Lamont's fee on
big-rig trucks, which has brought in less money than expected, and drop the sales tax on children's clothes under $100.
Republicans in the state Senate are promising to go even further.
“The House Republican budget is the best we have seen thus far in the process,” said state Sen. Kevin Kelly (R-Stratford), the Senate minority leader. “Senate Republicans will continue to advocate for even more significant, broad-based tax relief for working- and middle-class families in the days ahead.”
DIFFERENT HELP FOR FAMILIES
Both sides differ sharply
on how to help families.
While Democrats prefer a
bigger Earned Income Tax Credit for working poor families, GOP lawmakers want
to give all parents a deduction – regardless of how much they make.
“For every child you
have, you will have a $2,000 deduction on your income tax,” said state Rep.
Holly Cheeseman (R-East Lyme).
Unlike a tax credit,
which cuts your bill, a deduction simply reduces your taxable income. Last
year, the state sent families up to $750 in one-time child rebate checks.
RELIEF FOR BUSINESSES AND SENIORS
Like Lamont, Republicans want to restore a “pass-through entity” tax credit for small businesses. And like legislative Democrats, the GOP budget exempts more retirement income from the state income tax.
WEALTHY WON’T BENEFIT
Under all three
plans, the wealthy would be priced out of a tax cut with
income caps:
- Tax-writing Finance Committee budget: $200,000/year
- House Republican budget: $300,000/year
- Gov. Lamont budget: $560,000/year
EXTRA SPENDING
Republicans are offering deeper tax cuts, but they also want to spend 1% more than Lamont, especially on schools and nonprofits.
How is that possible?
GOP lawmakers plan to delay filling thousands of unfilled positions, saving $210 million over two years. Plus, the Department of Transportation and public colleges would have to meet savings targets.
Republicans also want to cancel a boost in Medicaid reimbursements and an expansion of HUSKY Medicaid coverage for undocumented children.
“We are not looking for press releases, unlike the other side of aisle,” said state Rep. Vin Candelora (R-North Branford), the House minority leader. “We are looking for substantive changes that people will benefit from.”
House Republicans are calling for a 2.5% increase for non-profits; Lamont and fellow Democrats only budgeted 1%.
“Connecticut has the resources today to support programs for substance abuse and mental health treatment, day and residential services for people with developmental disabilities and other vital services,” said Gian Carl Casa, president & CEO of Connecticut Community Nonprofit Alliance. “We are encouraged by the House Republican proposal and we hope the support for nonprofits on both sides of the aisle will result in a bi-partisan budget that provides the 9 and 7% increases community nonprofits need.”
FUZZY MATH?
Republicans insist their budget stays within Connecticut’s spending cap, but top Democrats are skeptical about the numbers.
“It will take some time to go through the details of their plan, but my immediate concern is their heavy reliance on lapses and unspecified ‘efficiencies’ to make the numbers work,” said House Speaker Matt Ritter (D-Hartford). “Between the Appropriations and Finance packages, the Governor’s proposal and now the House Republicans’ plan, we are in a stronger position to achieve our goal: a bipartisan budget.”
Lawmakers have an extra $200 million to spend, thanks to strong tax
revenues reported on Monday. But they’re also facing a threat of tuition hikes and layoffs if UConn and the state university system get reduced funding.
Lamont said he’s open to Republican ideas, as long as they stay within the cap and don’t move money off-budget.
“I feel like we’re actually pretty close,” he said. “There’s a lot of headlines, and people get edged up, but at the end of the day, in the context of a $50 billion biennial budget, I think we’re pretty close.”
WHAT’S NEXT?
All sides will now hammer out a budget deal before the legislative session ends in one month.
Taxpayers are just happy the debate is finally over how much to cut taxes.
“We really need a break right now with all that is going on,” said Sharen Williams, of Stamford. “And when you look at the paycheck, you want to cry most times because they're taking more than you even earn.”