HARTFORD, CT — With the city of Hartford as his backdrop and Bloomfield Mayor Suzette DeBeatham-Brown by his side, Ned Lamont promised to increase a middle class tax credit that dwindled during the past eight years of Gov. Dannel P. Malloy’s administration.
Lamont said he wants to increase the property tax for middle class homeowners to $300. The credit is currently $200 for individuals over the age of 65 or families with dependents. Individuals without kids who own a home currently don’t qualify for the credit.
Under Lamont’s proposal, individuals with incomes up to $138,500 and married couples earning up to $160,500 would be able to qualify for the credit, which would increase the revenue loss to the state by $165 million a year.
The revenue loss to the state would increase to $400 million in the third and fourth year of the proposal but it would give some taxpayers who pay more than 6.5 percent of their income taxes in property taxes up to a $1,200 tax credit.
For every dollar of property tax relief that goes out the door the state needs to replace it by spending less or taxing more in another area.
So the question becomes what is Lamont going to cut? Or what other taxes will he implement?
Lamont said he plans to increase the property tax credit in the first year of his first two-year budget. That will add about $165 million to an estimated $2 billion deficit.
Lamont doesn’t disagree with the math, but he believes he’s going to be able to pay for it by “reducing costs at the Department of Correction” by about $125 million. The Department of Correction is already running a $9 million deficit, just one month into the new fiscal year. He also wants to improve enforcement of tax collection at the Department of Revenue Services, and implement sports betting, which still requires a negotiation with the two federally-recognized tribes in the state.
In total, Lamont estimates the cost savings from all of these proposals will be about $305 to $375 million, just shy of what it would take to pay for the tax credits in the second biennium to fully fund the tax credits.
“Well I don’t have to start with an $11 billion hole,” Lamont said referring to his Republican opponents proposal to eliminate the personal income tax over eight years.
“This is a 1 percent cost to the state of Connecticut,” Lamont said of his property tax proposal.
The income tax revenues make up about 51 percent of the state budget.
Lamont said he doesn’t believe eliminating the income tax over eight years is “realistic.”
“We’re going to do it slowly. We’re going to do it methodically,” Lamont said of his property tax proposal.
Republican Party Chairman JR Romano said Lamont is engaging in nothing but a “shell game.”
He said at the end of the day Lamont has already said he’s going to raise your taxes.
Romano said Lamont is not committed to lowering taxes, he’s just found a way to tax other things.
Lamont said his property tax proposal is more realistic than Stefanowski’s proposal. Stefanowski has not detailed any plans for how he would pay for the income tax reduction except to say he would “rip the costs out of state government.”
Stefanowski’s campaign was not immediately available for comment.