
Gov. Ned Lamont introduced a handful of tax cuts that he plans to propose when the legislative session opens later this month.
“I’m trying to provide tax cuts that are sustainable,” Lamont said during a virtual press conference Wednesday.
Lamont, who is running for re-election, announced a handful of tax cuts, including one on motor vehicles.
“I think we put in place a significant cut in the car tax that serves the vast majority of our people, makes it a lot fairer and equitable and we’ll see what we can do in the future,” Lamont said.
Lamont wants to reduce the mill rate for property taxes on motor vehicles to 29 mills. That would expand relief to 1.7 million vehicles in 103 towns with mill rates above 29 mills.
“We will be reimbursing municipalities for the difference between any mill rate above 29,” Office of Policy and Management Secretary Melissa McCaw said.
Lamont is also proposing expanding the property tax credit to half a million Connecticut residents and increasing the benefit to $300. Currently, only the elderly and those with dependents are eligible for the credit.
Property tax relief was a promise he failed to deliver upon during his last run for governor when he had to contend with a $3.7 million budget deficit. This year things are different. The state has a $1.5 billion surplus.
Most of the tax relief would come from the general fund, but an estimated 1 percent could come from federal COVID relief dollars.
As part of his tax proposal, Lamont is also accelerating the tax exemption for pensions and annuities to 250,000 filers and wants to extend the student loan tax credit for employers to 32,200 borrowers.
Republicans were skeptical.
Sen. Republican Leader Kevin Kelly who proposed cutting the sales tax last month said in a statement that “It must be an election year since democrats are talking about tax cuts. Unfortunately, there is no actual relief here until next year.”
Kelly contends a sales tax cut would help more people struggling with inflation.
“Republicans have long called for relief when it comes to property taxes and taxes on pension in particular. But we also need immediate relief. Inflation right now is crushing family budgets,” Kelly said.
House Minority Leader Vincent Candelora said his property tax proposal still falls short.
“I hope I’m wrong about that this time around, but the fact that his proposal fails to restore the homeowner’s property tax credit to its highest level is a signal that Governor Lamont continues to have challenges following through on fixing issues that residents care about—in this case, affordability,” Candelora said.
Lamont’s administration contends these tax cuts are beneficial.
“We believe these tax cuts are broad, they are far reaching. They total close to $300 million we’re going to be putting back in the taxpayers pocket,” Department of Revenue Services Commissioner Mark Boughton said.
Bboughton, the former republican mayor of danbury, says these tax cuts will benefit taxpayers.
Candelora said that come at the same time Lamont reduced the amount of money municipalities receive from the state, which could push local taxes higher.
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“I can’t help but feel as though the ‘relief’ package crafted by the governor would point us toward territory that municipal leaders and residents have unfortunately grown accustomed to over the last decade: they’re promised the moon, only to see concepts yanked back entirely or retooled so much that they’re barely recognizable,” Candelora added.
Boughton said: “These tax cuts are immediate. People will feel those cuts in 2022.”
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