Senate Republicans weighed in on ongoing state budget negotiations Wednesday with a two-year, $50.4 billion tax and spending plan that prioritizes income and property tax relief while making cuts to state agencies.
Members of the Senate’s minority caucus outlined their budget package during a midday press conference outside the state Capitol building. Their recommendations follow proposals from Democratic Gov. Ned Lamont, plans from the tax and spending committees controlled by the legislature’s Democratic majority, and a third proposal by House Republicans last week.
Like their counterparts in the House, Senate Republicans used Lamont’s proposal as a foundation, specifically his proposal to slash the 5% income tax rate to 4.5% and the 3% to 2%, but, unlike Lamont’s plan, those cuts would be retroactive to the beginning of this year.
Other large tax reductions in the Senate GOP plan includes $99 million in revenue losses in each of the budget’s two fiscal years to support an expansion of the property tax credit that broadens eligibility thresholds from $49,500 to $109,500 for single taxpayers and from $70,500 to $130,500 for those filing jointly.
All told, Senate Minority Leader Kevin Kelly said that tax cuts in the proposal amounted to more than $1.5 billion in tax relief.
“What we’re doing is we’re providing the largest tax cut in Connecticut’s history,” he said. “A billion and a half dollars back to Connecticut’s middle and working class families.”
The caucus’s plan proposes to pay for that tax relief in large part through a total of nearly $230 million cuts to state agencies. That includes leaving roughly 400 vacant positions unfilled, adjusting budgeting for other currently vacant spots, eliminating inflation adjustments, and reducing funding by $53.7 million based on expenditure trends.
“There’s a lot of savings that can be made just by looking at historical trends on personnel lines,” Kelly said. “So you don’t have to lay anybody off, you just don’t have to hire and fund vacant positions that just create extra cash in the budget.”
The legislature’s Appropriations Committee also backed reduction in state agency vacancies in its spending plan last month. Despite a projected budget surplus, state policymakers are crafting a two-year plan within the constraints of fiscal caps, which limit state spending in order to pay down outstanding pension liabilities.
The Senate Republican budget is the leanest of the spending plans proposed this year. It spends around $130 million less than Lamont’s plan, which was outspent by proposals from both the legislature’s budgetary committees and the House Republican caucus.
Both Republican plans cancel a highway user tax on big rig trucks and create a new deduction for taxpayers with children. The Senate GOP has also included a reinsurance plan for health insurance plans in their proposal.
The Senate Republican proposal differs significantly from that of their House counterparts in the area of education funding. Where the House GOP included $290 million to support increases in Education Cost Sharing grants to towns, the Senate plan only modestly outspends the previously scheduled increases included in the governor’s recommendations.
The new proposal was met with a diplomatic statement from Senate Democrats, who promised to review the document and identify possible areas of common ground. Meanwhile, the governor’s spokesman, Adam Joseph, issued a statement lauding the Republican proposal’s adherence to fiscal guardrails and inclusion of many of Lamont’s tax cut policies.
“The administration will continue to work with the General Assembly to pass a budget that delivers on broad-based middle-class tax relief, retains fiscal guardrails and statutory caps, and that continues to build growth and opportunity for Connecticut’s residents and businesses,” Joseph said.
During a media briefing Wednesday, House Speaker Matt Ritter welcomed another proposal to inform budget negotiations, which he characterized as in their “substantially final form.”
“Both on the Approps and the Finance side, we get closer every day,” Ritter said. “There’s a handful of things that probably are still out there, but now that we have Senator Kelly’s proposal and his caucus’s proposal, we’ll compare them.”
House Minority Leader Vincent Candelora, meanwhile, lauded the Senate caucus’s proposal as having the shared goal of making the state more affordable. During a press availability, he told reporters that House Republicans wanted to submit a budget proposal earlier in the process.
“We think that getting in early was important. We think it’s toward the end of the game, but this could go into extra innings, so I think there’s opportunities for all caucuses to have a seat at the table,” Candelora said.
“I don’t think it’s ever too late in the state of Connecticut to stand up for the working class and the middle class families who have taken it on the chin through inflation in this unaffordable state,” he said.