The Connecticut House of Representatives voted overwhelmingly Tuesday to advance a two-year, $51.1 billion state budget package containing significant reductions in the income tax and hikes in education funding while fiscal constraints tempered other spending priorities.
The 832-page document passed the chamber on a bipartisan, 139-12 vote following a lengthy floor debate. The Senate was expected to approve the bill in the remaining hours of the legislative session before its statutory deadline at midnight on Wednesday.
The budget’s tentpole provision is a broad reduction in the state income tax aimed at middle-class filers making less than $150,000 and joint filers making under $300,000. The bill reduces the current 3% rate to 2% while dropping the 5% rate to 4.5%.
The tax cut has been a top priority for Gov. Ned Lamont, who proposed it ahead of the legislative session. He praised the budget deal in a statement on Monday.
“This budget will deliver the largest personal income tax cut in the state’s history,” Lamont said. “This is not a temporary tax cut – it is designed to be sustainable for years to come.”
Another provision softens the so-called “retirement cliff” by gradually phasing out a tax credit on pension and annuity as well as IRA deductions. Currently, filers become ineligible after crossing certain income thresholds.
“This budget returns hundreds of dollars to individuals, families, retirees, workers throughout the state of Connecticut,” said Rep. Maria Horn, a Salisbury Democrat who co-chairs the Finance, Revenue and Bonding Committee.
In other areas the budget hikes state support for Education Cost Sharing grants to local school districts by $158 million, accelerating scheduled increases for historically underfunded districts while delaying until fiscal year 2025 scheduled decreases to overfunded districts then slowing the rate of their decline.
“K-12 system has had an imbalance in the way they address education and with this budget going forward, we hope to bring that balance down,” Rep. Toni Walker, a New Haven Democrat who co-chairs the Appropriations Committee, said prior to the debate.
The budget drew broad Republican support. House Minority Leader Vincent Candelora said it included many ideas proposed by his caucus including tax cuts, bolstered education funding and reductions in unfilled positions at state agencies.
“We are happy to see that, being a minority caucus, that our voices were really heard and the governor took a lot of our ideas and we joined hands and made sure those initiatives made it to the finish line,” he said.
The plan includes about $135 million more in funding for the state’s higher education systems than the governor’s proposal, though not as much as state college and university officials have argued is necessary to avoid cuts and layoffs.
The budget also falls well short of the funding sought by the state’s nonprofit providers of social services. It includes a 2.5% cost of living raise over the two years as well as more – around 4.5% – for unionized group home workers that have spent days striking outside the state Capitol for better pay and benefits.
In a statement Monday, Gian-Carl Casa, president of the CT Community Nonprofit Alliance, said the increases were not enough.
“This budget will hurt residential and outpatient addiction and mental health programs, worsen the workforce crisis, force the closing of programs, and create longer waiting lists,” he said. “We’ve warned of this for months. None of this should be a surprise.”
Other compromises include funding for Connecticut’s recently passed early voting policy. In a statement Monday, Secretary of the State Stephanie Thomas said the budget failed to provide the “bare minimum” towns would need to enact the program next year.
The budget does not include any of the dedicated tax breaks for families with children considered by lawmakers this year nor does it contain proposals from Lamont to cut taxes for some Connecticut businesses.
Democratic legislative leaders had sought to spend more. On Monday morning, House Speaker Matt Ritter told reporters that lawmakers would have liked to have diverted some state funding to support more spending.
“Look, do I wish we could’ve spent a couple of hundred million dollars more? Yes, I do. I think that’s where our caucus was,” Ritter said. “We thought there were ways to do it… That would’ve given nonprofits a little more money. It would have given more money to a lot of things. But it didn’t happen.”
It didn’t happen in large part due to fiscal constraints including a state spending cap, which lawmakers reauthorized early this year. Adherence to those guardrails were key to winning support from both the fiscally moderate governor and legislative Republicans.
The budget falls narrowly under the cap in both years – $14 million in 2024 and $2.2 in 2025 – meaning policymakers had very little latitude to include extra funding in the two-year plan. Instead, an expected $2 billion in excess revenues will be used to pay down Connecticut’s unfunded pension liabilities.
Meanwhile, public awareness of billions in state surpluses coupled with years of lean budgets have fueled spending expectations and made lawmakers’ jobs harder. Walker told reporters that the cap had limited the work legislators could do with their budget plan.
“The cap is really holding back in many areas a lot of the funding we would like to do because we’ve had such a robust revenue in the state of Connecticut this past year,” she said.
During the debate, Rep. Tammy Nuccio, a Tolland Republican and ranking member of the Appropriations Committee, said the total spending increases amounted to about 7.5% over two years.
“Not too shabby when we look at what we’re seeing for inflation and everything else,” she said. “From a high level, there’s a lot of good initiatives here.”
Some felt the budget included too much. Rep. Gale Mastrofrancesco, R-Wolcott, said it would be irresponsible for her to support a budget that increased spending.
“You can say wherever you want where you’re getting it from, at the end of the day that’s taxpayer money,” she said.
Other initiatives went unfunded. As she did in the Appropriations Committee, Rep. Rachel Chaleski, R-Danbury, tried unsuccessfully to amend the budget to include funding for an approved charter school in Danbury. The amendment failed on a close, 69-81 vote with support from several Democrats.
In his closing remarks, House Majority Leader Jason Rojas said that lawmakers were not able to meet the needs of every cause deserving support.
“But this budget does reflect a lot of progress,” he said. “It’s a budget for the middle class, it’s a budget for the working class and, after we vote on it, I think it is something that we can be proud of.”