Senate Democrats Pass State Budget with Half a Billion Dollars in Tax Cuts, Investments in Child Care, Mental Health, Social Services and More

With an influx of federal aid, and with Connecticut tax revenues soaring due to a rebounding state economy, strong job growth and rising incomes, the second year of the biennial state budget was reconfigured by Democrats and Gov. Lamont to increase state spending in the coming year by 6.5% to $24.2 billion.

The budget includes historic tax cuts for Connecticut's citizens as well as major new investments in some of the human needs that were highlighted by the past two years of the deadly and disruptive COVID-19 pandemic.

The Democratic budget is still under the state-mandated spending cap, has maxed out our state Rainy Day Fund at $3.3 billion, and makes a massive, unprecedented $3.5 billion payment toward Connecticut's 70 years of built-up pension debt.

Some of the $600 million in Democratic tax cuts that will help Connecticut residents include:

  • Continuation of the 25-cent per gallon gasoline tax holiday through December 1, thereby saving Connecticut residents another $150 million.
  • Creates a new $250-per-child credit against the state income tax for low- and middle-income households, up to a maximum of $750, for single filers with earnings less than $100,000 per year and couples making less than $200,000. This saves Connecticut families $125 million.
  • A cap on the tax rate charged by cities and towns on motor vehicles will reduce car taxes by $100 million for residents in about 45% of Connecticut towns.
  • Increase the maximum property tax credit exemption from $200 to $300, saving Connecticut families $60 million per year this year and into the future.
  • Increasing the state Earned Income Tax Credit, a program created by former President Ronald Reagan and used by 186,000 Connecticut residents living in every town in the state. The increased tax deduction will save Connecticut families $49 million a year.
  • Accelerating the phase-out of taxes of certain pension and annuity income, saving Connecticut residents nearly $43 million.
  • The Democratic budget even eliminates the tax on movie theatre tickets, saving movie-goers $2.5 million this year.

On the spending side, Democrats and Gov. Lamont make major investments in the public services Connecticut residents demanded following two years of the deadly and disruptive COVID-19 pandemic: the mental health crisis impacting our children, expanded services for people with substance-use disorders, better wages for people working in our non-profits and as personal care attendants, increased funds to support survivors of domestic violence, more money for community college tuition, job-training programs, and a historic investment in child care services so parents can get back into the workplace.

Some of the hundreds of millions of new dollars that Democrats are spending on Connecticut residents include:

  • $10 million for mental health services at School-Based Health Centers
  • $30 million for increased 24/7 mobile crisis services
  • $1.4 million for no-cost training to address the hiring needs of Electric Boat
  • $72 million for private-sector non-profit pay raises
  • $23 million for personal care attendants
  • $70 million for childcare industry wage enhancements
  • $15 million to renovate and construct early childhood facilities
  • $2.5 million to combat gun violence
  • $2.8 million for survivors of domestic violence
  • $50 million for affordable housing
  • $75 million to update school air conditioning and heating systems
  • $8 million to increase access to town-run summer camps
  • $3 million for senior citizens' adult day programs and Meals on Meals
  • $4 million for Alzheimer’s respite care programs

To view more details and analysis of the Democratic budget, please visit: https://cga.ct.gov/asp/cgabillstatus/cgabillstatus.asp?selBillType=Bill&which_year=2022&bill_num=5506

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