House Republicans on Wednesday unveiled the Capitol’s most aggressive tax cut plan yet, proposing a combination of ongoing and one-time relief worth more than $700 million and focused on households in middle income and small and medium enterprises.
Republicans have also called for new investigations into Governor Ned Lamont’s administration’s contracting practices and other initiatives to improve government transparency.
“I think overall affordability in the state of Connecticut is one of the biggest concerns for residents,” said House Minority Leader Vincent J. Candelora, R-North Branford. .
After two years of the coronavirus-induced economic slump, including a year 2021 marked by inflation above 7%, Connecticut households and businesses are in shock.
The state government, however, thanks to a robust stock market and unprecedented federal pandemic assistance, has a record $3.1 billion in its rainy day fund and is stumbling. expects an unprecedented surplus of $2.5 billion at the end of the current fiscal year on June 30.
House Republicans’ main plan to help middle-income households would involve about $300 million in state income tax relief.
The GOP would raise the income tax credit that offsets local property tax expenses from $200 to $500 — a record high it hasn’t reached since 2011. It would also make households childless again or credit-eligible seniors – something they lost in 2018.
The $200 property tax credit currently provides about $53 million in annual relief to Connecticut families. The last time it stood at $500 and was offered to households without children or seniors, it was worth $365 million.
House Republicans said working families would also benefit from the repeal of the new commercial truck mileage tax proposed by Lamont and signed into law last year by the Democratic-controlled Legislature.
The tax, which would bring in $90 million a year by 2024, would only exacerbate inflation, Republican lawmakers argued, driving up the cost of groceries, department store products and other basic necessities generally transported by truck.
Rep. Holly Cheeseman of East Lyme, a ranked House Republican on the finance committee that drafts taxes, said it was no coincidence that all of her caucus’ revenue proposals targeted broad groups of taxpayers.
“It’s all about priorities, and it’s clear where our priorities lie,” she said. “Where can tax relief give us the best value for money?”
Lamont, a Democrat from Greenwich, said he fears tax hikes on Connecticut’s wealthy will drive them out of the state. The governor has proposed more than $330 million in tax cuts, including increasing the property tax credit to $300 and freezing municipal vehicle taxes statewide at 29 factories.
But Candelora said that plan was not aggressive enough, given the state government’s bloated coffers. Democrats “represent the urban poor and our very rich. It’s the Republicans who represent the broader middle class,” the minority leader added.
“We are happy to see [House] Republicans accept our proposal to provide tax relief to Connecticut residents and families,” said Lamont spokesman Anthony Anthony. “Any day we discuss the amount of money we put in people’s pockets is a good day for the state. As Governor Lamont has said time and time again, he will work with anyone on ways to support our working and middle class families, our small businesses and our small but mighty economy state.
The caucus’ main proposal to help Connecticut businesses has to do with the massive debt the state’s unemployment trust has taken on during the pandemic.
According to the Department of Labor, the state borrowed about $850 million from the federal government to maintain unemployment benefits. Companies are legally responsible for covering this debt and face a special assessment from this fall.
The governor and legislature agreed last summer to use $155 million in federal pandemic relief grants to help pay off that debt. House Republicans would squeeze another $300 million from the state surplus to further cut what businesses owe.
The caucus also proposed bolstering another credit for small and medium-sized businesses that would provide about $50 million in recurring annual relief.
House GOP: Shadows in Lamont administration predates latest controversy
In addition to offering tax relief, House Republicans have also focused much of their 2022 agenda on increasing transparency in state government.
“One of the issues that we certainly continue to see percolate is the corruption that has hit the state of Connecticut yet again,” said Candelora, who said a waning culture of transparency has hit the state shortly. time after Governor Ned Lamont took office in January. 2019.
In April of that year, Lamont and hedge fund billionaire Ray Dalio would announce a public-private partnership to invest at least $200 million over five years in Connecticut’s underperforming schools. But by June, the CT Mirror would disclose that, as a condition of funding half of this initiative, Dalio and Lamont would insist that the partnership be exempt from state ethics and disclosure laws.
Dalio and his wife, Barbara, dissolved the partnership a year later following media reports that the Dalios were forcing the company’s executive director out of his post.
And while FBI officials are currently investigating some projects overseen by former Lamont Deputy Budget Director Kosta Diamantis, Candelora noted that the seeds of this problem were sown in the spring of 2019. That’s when- where the Lamont administration unilaterally moved the state’s massive school building program. Administrative Services Department [DAS] in the governor’s budget office in the spring of 2019 — an act that Candelora and many other lawmakers, from both parties, argued couldn’t be done without legislative approval.
“It was no surprise to us that a few years later we were seeing scandals that stemmed from it,” Candelora said, adding that it was time for an independent review of contractual practices.
“If we have individuals involved in scandals and corruption…. I don’t think it’s incumbent on us to join arms and have the people involved in these scandals actually lead the investigation,” Candelora said. “We actually need more forensic accounting, which is not just going to look at how the money was spent, but how much of that money was spent and who benefited.”
Lamont’s office has not commented on House Republicans’ call for an independent investigation into procurement proceedings and accusations of a lack of transparency in the administration.
House Republicans would also demand that all quasi-public state agencies meet all of the standards of transparency and ethics imposed on more traditional state agencies. This includes being subject to oversight by the State Procurement Standards Board.
The governor, in his latest budget proposal last week, recommended removing the markets board’s primary enforcement power — to suspend any procurement process deemed inconsistent with state rules.
Another House Republican proposal would make all contracts entered into by the state but not subject to competitive bidding available for public review on the Internet.
