EAST HARTFORD, Conn. — Gov. Ned Lamont announced Monday a plan he says will reduce income tax rates for Connecticut's middle class.
"You don't have to apply for this," the governor said at a press conference Monday morning. "You don't have to fill out forms. You will see a reduction in your withholding, which means you'll be keeping more of what you earn."
If approved by the legislature, this will become Connecticut’s first income tax rate reduction since 1996 and the largest rate reduction since the income tax was implemented in 1991.
Currently, single (joint) filers pay a 3% state personal income tax on their first $10,000 ($20,000) of adjusted gross income and a 5% tax on income up to $50,000 ($100,000).
Lamont proposed to lower the 5% rate to 4.5% permanently and the 3% rate to 2% beginning with the income year 2024. This is expected to save taxpayers $440 million annually, his office said.
"It’s a long time coming," Lamont continued. "I wanted to make sure this is something we can do not just for the next year or two. I think people want consistency and certainty to know this is a tax cut that’s built to last."
Depending on adjusted gross income, some joint filers could receive almost $600 in income tax relief, and single filers could save almost $300. In total, about 1.1 million of the state’s 1.7 million tax filers will see some relief under the plan.
"We're taking money and we're putting it back into people's pockets where it belongs," said Mark Boughton, commissioner for the Connecticut Department of Revenue Services.
Lamont said this plan is overwhelmingly focused on working families, adding those earning less than $50,000 a year would not pay any state income tax.
"Every penny counts when it comes to a small business," Tamika Mitchell, owner of Perfect Poundcakes, said. "I was just excited about hearing a reduce of anything, that I can put the funds towards something else."
If approved by the state legislature, these cuts wouldn’t go into effect until January 2024.
"We've had some stops and starts when it comes to tax credits over the years," Lamont said. "I wanted to do something … that we thought was good, not just for this biennium, but going forward."
This income tax cut was a central point of the governor’s State of the State address last month and one garnering legislative support from both sides of the aisle.
Senate Minority Leader Kevin Kelly (R-Stratford) released a statement reacting to the governor's plan, saying that Senate Republicans "appreciate" Lamont's proposal that would help "families who are feeling the pain at the pumps, at the supermarket and when they open their energy bills.
"Senate Republicans proposed $1.2 billion in tax relief last year, but our plan was rejected by majority Democrats in the legislature," the statement continued. "Connecticut taxpayers deserve significant and immediate widespread tax relief, and Republicans will continue to fight for them."
The governor's plan is one of several expected to be announced in his upcoming budget proposal. Lamont said the budget he will announce provides a "smart, strategic, and fiscally-sound plan" to provide tax relief.
Lamont is scheduled to deliver his budget address to the General Assembly Wednesday, Feb. 8 at 12 p.m.
Jennifer Glatz is a digital content producer at FOX61 News. She can be reached at jglatz@fox61.com.
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