Legislative Republicans pitched a $1.2 billion tax relief plan Thursday which reduces state income, sales and gas taxes and proposes to join other states in suing the federal government to challenge restrictions on spending pandemic relief funds.
House and Senate Republicans announced the plan during a state Capitol press conference Thursday morning.
It cuts the state sales tax from 6.35% to 5.99%, lowers the income tax from 5% to 4% for individuals making less than $75,000 and households making less than $175,000, and extends a gas tax holiday currently set to expire in June until the end of the year and expands it to include diesel fuel. Among other provisions, the Republican plan also scraps a highway user fee passed last year.
“This is an opportunity for Connecticut to make systemic change that will help the residents of Connecticut,” House Minority Leader Vincent Candelora said.
However, the plan runs afoul of federal rules governing how states spend money provided by the American Rescue Plan Act. Senate Minority Leader Kevin Kelly said the legislature’s two Republican caucuses planned to file an amicus brief in support of a lawsuit in Texas, challenging President Joe Biden’s administration on those restrictions.
“We don’t have to continue to overtax our citizens because we took federal money,” Kelly said. “We believe that the families across Connecticut want us to fight for them and to make sure that if they’ve been overtaxed, our government can give the money back.”
House Democratic leaders called the plan irresponsible during a press availability immediately afterwards. House Speaker Matt Ritter said leaders would reach out to the attorney general’s office for a legal opinion on the Republican plan.
“But to pass a budget — to pass tax cuts without some legal guidance and clarity seems like the height of irresponsibility,” Ritter said. “You can do that when you don’t have to run the ship.”
“Eight hundred million dollars on a lawsuit that may or may not happen? Sounds like an over-promise,” House Majority Leader Jason Rojas said.
Ritter told reporters legislative Democrats and Gov. Ned Lamont’s administration made progress on arriving at an agreement on a state spending plan.
