Posted on April 1, 2022
HARTFORD – House Republican Leader Vincent Candelora (R-North Branford),Senate Republican Leader Kevin Kelly (R-Stratford), and Senate Republican Leader Pro Tempore Paul Formica (R-East Lyme) today wrote to Governor Ned Lamont and Attorney General Tong calling for further tax relief and requesting that Connecticut join other states in challenging American Rescue Plan Act (ARPA) limitations on states’ tax reduction actions to maximize tax relief for CT residents.
The federal ARPA legislation attempts to restrict states’ authority to cut taxes if they accept federal fiscal recovery funds. At least 16 other states have challenged this provision as unconstitutional. To date, these challenges have been successful and allowed these states to provide significant bipartisan tax relief to their residents in many states with at least two Democratic governors signing income tax cuts into law.
“Connecticut is overtaxing its residents and the state’s inflation related windfall must be returned to Connecticut families. Though the passage of bipartisan legislation to suspend the gas tax is progress, it just barely begins to scratch the surface of returning the massive amount of over taxation windfall to CT residents,” said Kelly, Candelora and Formica.
“Rampant inflation and over taxation have created record state surpluses for the 2022 and 2023 fiscal years. Windfall revenue from just the sales tax and gross receipts tax alone amounts to $897 million above projections. As inflation takes more out of people’s wallets, the state budget is benefiting and our families are hurting. People across our state continue to struggle as the K shaped recovery from the COVID-19 pandemic has left working and middle class families behind. Connecticut families deserve further tax relief.
“We disagree with the administration’s contention that ARPA limits the state in the tax relief it can provide residents. Because Connecticut is using federal funding as revenue in the biennium budget the state is collecting too much in tax revenue from our residents. That should not preclude us from giving that over taxation back to our residents. If we don’t return these tax dollars, Connecticut will end up overtaxing and overspending.”
The letter (attached) asks that the Governor and Attorney General, like other states, challenge ARPA’s prohibition on the use of funds to offset a reduction in net tax revenue.