Candelora Supports Historic Middle-Class Tax Cut

HARTFORD—House Minority Leader Vincent Candelora on Tuesday voted for a bipartisan budget that includes an income tax cut for Connecticut's working and middle class, capping a yearlong effort by Republicans to deliver overdue structural tax relief in one of the nation's most expensive places to live. "For more than a decade, middle class residents have been targeted with taxes and fees that have pushed them toward the brink of affordability. That's why this budget is so important—by offering the first income tax cut in decades, we're taking a critical first step on the road to offering sustainable and structural tax relief that will reduce the cost of living here," said Candelora, who represents the 86th Assembly District. [embed]https://youtu.be/Hu5XsSpKvDY[/embed] The 2024-2025 budget totals $51.1 billion over two years--$25.1 billion in the first fiscal year (FY24), and $26 billion in the second (FY25). The bill (H.B. 6941) was approved in a 139 to 12 vote at 1:45 a.m. The State Senate began debate later in the day Tuesday. In April 2022, Candelora and House Republicans offered a plan for a structural middle-class tax cut as majority Democrats instead proposed—and eventually adopted—short-term relief in the form of rebates. In February, Gov. Lamont picked up the Republican cause and proposed a middle-class income tax cut, and Candelora and Republicans included his plan in their balanced budget proposal that eventually became the framework for bipartisan budget talks. Overall, the budget provides roughly $800 million in tax relief. The plan decreases the bottom two marginal income tax rates from 3 percent to 2 percent, and 5 percent to 4.5 percent. Additionally, the bill eliminates retirement income tax cliff by adding a phase-out for allowable pension and annuity and IRA distribution deductions against the Personal Income Tax. The change is effective in 2024. "The good news is that we're able to provide this tax relief and financial investments in critical areas such as local education while adhering to the strict fiscal controls that have allowed the state to build a healthy budget reserve," Candelora said. A major component of the bipartisan budget is the House Republican strategy of saving money--$200 million—by budgeting for open state jobs according to what agencies could realistically expect to hire rather than setting aside money for all of them at once. "This budget puts us on course, long-term, to control the size and scope of state government," said Candelora, of North Branford. Key provisions of the two-year bipartisan budget:

• $150 million investment in local education reform funding
• Fully funds Excess Cost grants for special education reimbursements to towns
• Preserves ECS funding for some towns that were scheduled to see reductions
• Freezes diesel tax at 49.2 cents per gallon for one year
• Provides funding increase for nonprofit service providers
• Changes truckers' onerous monthly Highway Use Tax filing to quarterly
• Creates support fund for families of police officers killed in the line of duty
• Increases PILOT payments to municipalities by 3 percent
• Allows for $2 billion payment toward unfunded pension liabilities
• Deposits more than $3 billion into the state's Rainy Day Fund

In their original budget proposal, Candelora and Republicans in early May offered other tax relief measures that didn't make it into the budget adopted by the House early Tuesday, including a first-ever $2,000 child tax deduction, elimination of the Highway Use Tax on trucks, and restoration of the pass-through entity tax credit. "It's clear that our varied proposals changed the conversation at the capitol, moving the concept of sustainable tax relief to the forefront of the General Assembly's agenda," Candelora said. "Our state is better off when Republicans are at the negotiating table, and I look forward to working with majority Democrats to maintain this focus on affordability."