The two-year, $51 billion state budget includes a historic cut to the state’s personal income tax.
Gov. Ned Lamont has signed the budget.
The two-year, $51 billion state budget includes a historic cut to the state’s personal income tax. The state House of Representatives and Senate passed the budget last week.
The reduction in the income tax has been predicted to benefit around 1 million of the state’s 1.7 million tax filers by permanently lowering marginal rates for the first time since 1996. It’s being billed as the largest reduction since the tax was first implemented in 1991.
The plan also increases the income tax credit for low-income working families, benefitting about 211,000 filers, and freezes scheduled increases in the state diesel tax.
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The budget package also boosts state aid for local school districts by an additional $329 million; funds the “baby bonds” program that sets aside up to $3,200 for infants in low-income families; creates a new 30% tax credit for pre- and post-Broadway productions and live theatrical tours; increases funding for ambulance services and child care providers; and expands an anti-gun violence program to more cities.
It also increases pay for inmates; provides funding for striking group home workers; includes funds to reduce a waiting list for residential services for people with developmental disabilities; restores Lamont’s planned cuts to Metro-North commuter rail in fiscal year 2025; and includes additional funding for nonprofit social service agencies and state colleges and universities, although advocates contend it’s not enough considering the state’s resources.
"Good things happen when the minority party has a seat at the negotiating table. We saw it in 2017, when Republicans fought for the inclusion of the fiscal controls that remain in place today, and this spring when our proposed framework for tax relief and right-sizing government agencies gave shape to the conversation for the bipartisan budget signed into law today," said House Republican Leader Vincent Candelora (R-North Branford).
State Comptroller Sean Scanlon projected the current fiscal year, which ends June 30, will end with a $1.6 billion budget surplus, an increase of $16 million from May. The budget deposits $3.3 billion into the state's budget reserve account.
Lamont signed the budget, which covers fiscal years 2024 and 2025, at 2:30 p.m. Monday at the state Capitol. It will go into effect on July 1.
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