On a party-line vote early Tuesday, the House passed a $24 billion budget adjustment package containing more than $600 million in tax cuts which Democrats heralded as “historic” and Republicans derided as temporary.
Lawmakers voted 95 – 52 at around 12:20 a.m. to send the 673-page budget document to the Senate for consideration before the legislative session ends Wednesday at midnight.
This year’s package, a mid-term adjustment to last year’s bipartisan biennium budget, comes as policymakers prepare to run for re-election in the fall and soaring tax revenues have swollen the state’s fiscal cushions.
“Right now in this moment, because of the fiscal strength of Connecticut, we have a ability to cut taxes and help people right now that are dealing with a very tough time,” Rep. Sean Scanlon, Guilford Democrat and House chair of the finance committee, said.
“We can use the surplus we have and the cushion we built to make a difference in people’s lives,” Scanlon said.
The budget creates a temporary, $250 per-child tax credit for lower and middle earning families. It expands the property tax credit and effectively reduces the car tax in 75 towns by capping the mill rate at 32.46 and reimbursing municipalities for the difference.
A tax holiday on the state’s 25-cent excise tax on gasoline, previously set to expire in June, will be extended until Dec. 1 under the budget along with a policy offering free bus service during the holiday.
The budget would also expand for one year eligibility for the Earned Income Tax Credit, which boosts the tax returns of the state’s working poor.
Republican lawmakers objected to being left out of budget negotiations and argued the plan drafted by Democrats prioritized temporary tax relief over systemic cuts that would persist beyond the next year.
“I’m disappointed, in the sight of our record surplus, that really, despite claims that this is historic, so little in terms of long term structural change was made,” Rep. Holly Cheeseman, R-East Lyme, said.
House Minority Leader Vincent Candelora said Republicans were disappointed the budget did not include more permanent income tax reduction.
“These are all sorts of gimmicks,” Candelora said. “The gas tax ends on Dec. 1 right after the election, along with the child tax credit. These aren’t systemic changes. This is a budget that’s crafted for November, Republicans wanted a budget that’s crafted for the future.”
During a press conference earlier in the day, Gov. Ned Lamont referred to the package more than once as including “the largest tax cut in the history of the state.” His budget director, Jeff Beckham, said the sum total of the tax cuts surpassed those signed by Gov. John Rowland in 1995, if adjusted for inflation.
“These are tax cuts that are going to make a difference right now, right in this inflationary period,” Lamont said.
The budget funds the raises and bonuses for the state’s public sector workforce included in a negotiated labor agreement approved by the legislature in April. It also includes about $30 million to pay a limited group of private sector workers bonuses for working through the COVID-19 pandemic. The figure is well short of the $700 million labor unions had sought to support pandemic pay.
The plan also dedicates $40 million to pay back borrowing used to support the state unemployment trust fund during the pandemic. The Connecticut Business and Industry Association had pushed for more assistance and estimated the shortfall which state businesses will be expected to pay at closer to $460 million.
Rep. Toni Walker, a New Haven Democrat who co-chairs the Appropriations Committee, said policymakers prioritized funding the state’s mental health systems, which were inadequate to support increased demand during the pandemic, especially when it comes to children.
That includes more funds for social services providers and child care workers. Children’s mental health resources included in the budget totaled $223 million over two years, according to the governor’s office. Walker said it also helped to pay for programming that would serve to divert young people from becoming involved in crime.
“Bringing back community organization, bringing back athletic organizations, bringing back after-school programming, bringing back family environment and family activities, bringing back museums and different summer camps, giving people that enrichment that’s necessary to have them understand the value of respect for each other and respect for our society,” Walker said.
But the budget also includes funding for a bunch of projects.
Montville’s Parks and Recreation Department is getting $500,000 for a tennis court and Dixwell Church Historic Preservation in New Haven is getting $2 million for renovations. There’s also $2 million for the Department of Economic and Community Development to establish air service to Jamaica.
The budget will also mandate schools to provide free menstrual products in all women’s restrooms, all-gender restrooms and at least one men’s restroom.