When Governor Lamont took office two and half years ago, no one could have envisioned a bipartisan budget with across-the-board increases for education, municipalities and numerous social programs without any significant tax increases. While the last 16 months have been very rough, today with federal relief money in hand and a full $3.5 billion rainy day fund, Connecticut seems to be making long-desired progress. Even the state’s long-term debt will be addressed. As a result of the “volatility cap” put in place in 2019, CT will soon send more than $1 billion to reduce its pension debt this year.
The two-year, $46 billion state budget increases state spending in the first year by 2.6%, to $22.7 billion, and 3.9% in the second year, to $23.6 billion. It includes increased payments to nonprofits that provide care to the developmentally disabled and others. It also includes an expansion of the earned income tax credit for low-income families.
Under this budget, municipal aid is increased by $191.5 million, an 8% increase from the current fiscal year. These funds are in addition to the $3.2 billion available to cities and towns in federal pandemic relief. Stamford alone is set to receive an additional $3.9 million in municipal aid and nearly $2 million in new education funding; while Norwalk will receive $4.5 million in new municipal funding and approximately $600,000 in new education aid. Both communities will also receive millions in additional federal education pandemic relief funds.
Other budget highlights include:
- Tax relief for restaurants and allows certain businesses to keep 1.36% of the 7.35% sales tax they collect on sales of meals and beverages for FY 22
- An increase in the state’s earned income tax credit to 30.5% of the federal credit
- Expands healthcare for 40,000 residents and families
- Expands workforce training so that we can get people back to work
- Fully funds debt-free community college
- Includes relief for arts, culture and tourism
None of the controversial new taxes debated at the Capitol this session were included in the final budget, such as the proposed property tax on large homes and commercial buildings nor the tax on health insurance. The multi-state cap and invest program known as the Transportation Climate Initiative to curb greenhouse gas emissions was also not included.