House Republicans: While Democrats Mail Out Checks, New York Is Cashing In on Connecticut

HARTFORD—As Connecticut Democrats tout one-time rebate checks as property tax relief, House Republicans are calling on the General Assembly to address a structural revenue problem hiding in plain sight: New York's "convenience of employer" rule, which diverts millions in Connecticut-earned income tax dollars to Albany every year. And while New York has been winning this fight for years, Connecticut's governor and attorney general have been silent.

"A check in the mail is a political move, not a policy," said House Republican Leader Vincent Candelora (R-North Branford). "Connecticut residents frustrated by rising property taxes don't need a one-time payment that disappears next year. They need a government that stops letting another state take their money. The convenience tax issue alone represents the kind of permanent, structural relief Democrats keep promising but never deliver. It's been sitting right in front of them."

Under New York's aggressive "convenience of the employer" rule, remote workers who are Connecticut residents employed by New York companies are treated as working in New York—even when they never leave their homes. New York collects the income tax. Connecticut gets nothing.

The estimated 80,000 Connecticut workers caught in this situation aren't just losing their tax dollars to another state — they're paying more than they would here at home. New York's top income tax rate is 10.9 percent. Connecticut's top rate is 6.99 percent. Connecticut workers subject to New York's rule are being taxed at a significantly higher rate on income they earned without setting foot in the Empire State.

Worse, these residents risk being taxed twice on the same income—once by New York under its convenience rule, and again by Connecticut. Connecticut addressed that concern in 2019 by creating a tax credit to offset some of that double taxation, but a credit is not a solution. It is a workaround that leaves New York's hand in Connecticut's pocket and does nothing to bring that revenue home.

Even New Jersey—which also applies a convenience rule—has moved further than Connecticut to push back. In 2023, New Jersey enacted a refundable income tax credit specifically designed to encourage its residents to challenge other states' convenience rules in tax court. Connecticut has taken no comparable step to fight for its taxpayers.

This isn't a new concern for House Republicans. In 2025, as they advanced an alternative state budget proposal, Republicans identified the convenience rule as a standalone structural reform—one with the potential to drive goals ranging from expanding the property tax credit to creating a child tax deduction. That proposal also included funding to help Connecticut residents who wanted to challenge the rule in court, since the state itself cannot initiate such a lawsuit. Democrats ignored it then. They're still ignoring it now.

Repealing Connecticut's own version of the rule and asserting its right to tax income earned here could return more than $340 million annually to Connecticut, according to the nonpartisan Office of Fiscal Analysis. House Republicans say that money could go directly to Connecticut residents—permanently expanding the state property tax credit for homeowners, or bolstering school funding so towns aren't forced to raise taxes.

House Republicans have introduced legislation this session to deliver permanent property tax relief directly to Connecticut families. The proposal would more than double the state property tax credit—raising the maximum from $300 to $650—while broadening income eligibility to reach more than 800,000 filers across Connecticut. Combined with the structural revenue that could be reclaimed from New York, House Republicans say the path to sustainable relief is clear.

"This isn't new money we'd have to borrow or tax someone to find," Candelora said. "It's Connecticut money that's been diverted to Albany. Bringing it home is exactly the kind of structural reform that delivers real, lasting relief—not a check that for a lot of people won't even cover the cost of a monthly electric bill."

Last session, legislators passed a bill (PA 25-172) directing Attorney General William Tong to examine the issue and develop legal strategies to defend Connecticut residents and taxpayers. But while Tong, Governor Lamont, and General Assembly Democrats have made a cottage industry of filing lawsuits and holding press conferences over federal funding disputes, they have had remarkably little to say about New York doing the same thing. Connecticut workers are losing money to Albany every single day, and the two most prominent Democrats in state government have barely lifted a finger.

"Democrats are in front of every camera they can find when they think Washington is taking Connecticut's money," Candelora said. "But New York has been doing this for years and somehow that doesn't warrant the same outrage. Connecticut taxpayers are owed the same energy, the same urgency, and the same fight."

Adding insult to injury, New York Governor Kathy Hochul has been publicly courting former New Yorkers who fled to Florida, urging them to return because she wants their tax revenue back. But she hasn't said a word to Connecticut residents who left New York. She doesn't need to. Thanks to the convenience rule, she's still collecting taxes on many of them.

"Governor Hochul is chasing Floridians because she lost their money," said Rep. Joe Polletta (R-Watertown), House Ranking Member of the Finance Committee. "She's not chasing our residents because she never stopped taking their money. Connecticut needs to put an end to it."

The tax grab isn't the only front where New York is winning at Connecticut's expense. Cross-border bottle deposit fraud—encouraged by the gap between New York's 5-cent deposit and Connecticut's 10-cent deposit—is costing Connecticut beverage distributors millions. New York's blockade of natural gas pipeline infrastructure, meanwhile, continues to deny Connecticut ratepayers a shot at affordability. Taken together, House Republicans say the pattern is clear.

"Whether it's our tax dollars, our bottle deposits, or our energy bills, New York has our number," Candelora said. "While our governor has been busy arguing that Connecticut has better pizza than New York, New York has been busy eating our lunch."

"Democrats can keep mailing checks," Polletta said. "Or we can start fixing the problem. House Republicans are ready to do the work."

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