Gov. Lamont reaches tentative budget deal with lawmakers; controversial new fees are out
Connecticut’s next state budget will include no new taxes and tax relief for working-class families under a tentative budget deal reached Friday evening.
New controversial fees on gas suppliers, tractor-trailers and the insurance industry were removed from the budget. However, Gov. Lamont says his controversial mileage fee on tractor-trailers will run as a stand-alone bill. The announcement came after hours of budget talks Friday afternoon.
Earlier in the day, state House Speaker Matt Ritter said they're "very close" to an agreement, but Democrats wanted to spend and borrow more than Lamont. In the end, the governor said he made concessions on the state spending cap.
Just one day earlier, Lamont said he couldn’t support a budget that relied on “gimmicks.”
"The current budget coming out of the legislature is not in balance. It doesn't adhere to the spending cap," Lamont said.
The big sticking point was aid to aid cities and towns - which affects you because it keeps your property taxes in check.
The new budget includes major tax relief, especially for poor and working class families. They will save an average of $551 by raising the state earned income tax credit.
However, a proposal to give parents a new Child Tax Credit in 2024, worth up to $900, was dropped. The federal government is already extending a similar credit.
As for the wealthy, they'll avoid any new tax hikes. Progressive Democrats wanted the hike to help inner cities, but Gov. Lamont said it would scare away Connecticut’s highest earners just as the state is recovering the COVID pandemic.
Also out of the budget is a new climate change agreement that Republicans called a "gas tax." It would have forced wholesale fuel suppliers to pay to pollute – with proceeds going to transportation initiatives and green energy programs like electrifying buses.
Lamont made his pitch for climate change earlier on Friday, hours before agreeing to drop the idea.
"I've got Republican and Democratic legislators standing with me saying, 'Yes, we're all for the environment.' When it comes time to do something, people start stepping away," Lamont says.
Top lawmakers said they supported the plan, but there weren’t enough votes in the legislature over fears of rising gas prices.
"Look, I like both ideas personally,” says Ritter.
Gov. Lamont also agreed to drop a $50 million health insurance tax that the state’s formidable insurance industry fought. The governor hoped to use the money to expand health insurance options for the poor.
Republican leaders took credit for the move away from taxes, but stopped short of endorsing the new spending plan yet.
"The Governor started out wanting new taxes on gas, food and health insurance. Democrats wanted over $3.2 billion in new taxes on income, mileage, houses, and jobs,” said Sen. Kevin Kelly, the Senate GOP leader. “So what changed? Republicans rallied around our state saying no to any new taxes. We took our message to the people, and their voices were heard."
Friday evening, rank-and-file legislators, including Republicans, will look over the budget to gauge their support. Lawmakers have until Wednesday to pass a new, two-year spending plan.