Sen. Martin Looney looks at EITC map Credit: Hugh McQuaid photo / CTNewsJunkie

Democratic lawmakers want to make one of the largest tax cuts for low-to-moderate income, working families permanent, but not everyone in their party is on board, including Gov. Ned Lamont. 

House Speaker Matt Ritter and Senate President Martin Looney said they want to make the 41.5% earned income tax credit permanent. At the moment, Lamont is using some federal funds to increase the tax credit to about 198,000 working families. The credit depending on how much a working person makes under $56,000 a year could be up to $1,200 depending on how many children are in the family. 

“I can’t have more permanent tax cuts that discombobulate the budget and run counter to federal law,” Lamont said Wednesday in East Hartford. 

Ritter and Looney are proposing using $42 million in state funds to permanently fund the credit. 

They declined to negotiate the impasse in public, but said they were confident the final budget will include the 41.5% earned income tax credit. 

“Admittedly, the Democratic Party is divided in some cases about the best way to address that, but when you can’t go down one road there’s always another road available,” Ritter said Wednesday at a Capitol press conference. 

Gov. Ned Lamont in East Hartford at the senior center Credit: Christine Stuart photo / CTNewsJunkie

Lamont said he would rather increase the property tax credit and reduce car taxes to help taxpayers. 

House Minority Leader Vincent Candelora agrees with Lamont about the property tax, but doesn’t agree with Democratic lawmakers about making the earned income tax credit permanent at 41.5%. 

“Right now there are certainly issues with inflation and affordability for residents broadly across the spectrum and that type of increase only benefits a couple a hundred thousand people,” Candelora said. 

Candelora says the Democratic tax proposals are too narrow. 

“How we get money into everybody’s pockets, not just people that happen to have children or people who happen to have a certain income threshold,” he said. 

The debate over tax policy comes a day after the Department of Revenue Services issued its second tax incidence report, which showed nearly 49% of Connecticut residents who make under $50,000 a year pay the taxes that fund the budget. 

“After we heard about the DRS tax report yesterday my heart stopped when I saw that almost 49% of the people in Connecticut that pay taxes earn an income less than $50,000,” Rep. Toni Walker, D-New Haven, said. “$50,000 that is just above minimum wage. We in Connecticut need to do better. We need to look harder at the things we can do to help the people of this state.” 

Revenue Services Commissioner Mark Boughton, a former lawmaker, said “If I was in the legislature I would really be gearing my energies toward the property tax and towards what we did today as part of the car tax.” 

He warned against reading too much into the tax incidence report, which was compiled by his agency. 

“We’ve gotta be super careful. We’re down to 774 individual tax filers that pay over $1.2 billion dollars worth of taxes each year,” Boughton said. “They pay almost the same amount as 850,000 tax filers, so I think we have a little more work to do on the progressivity side in terms of our rates, but I think the real impact would be on the property tax for our residents.”