Month: February 2023

Governor Calls for Connecticut’s First Income Tax Rate Reduction in Almost Thirty Years and the Largest Rate Reduction in State History

(EAST HARTFORD, CT) – Governor Ned Lamont today held a news conference in East Hartford to announce that the fiscal years 2024 and 2025 biennial state budget proposal that he will present to the General Assembly later this week calls for a broad-based reduction in income tax rates for middle-class workers in Connecticut.

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). Governor Lamont is proposing to permanently lower the 5% rate to 4.5% and the 3% rate to 2% beginning with income year 2024. This is expected to save taxpayers $440 million annually. 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 amount of relief under the plan.

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.

“I want to cut taxes for the middle class,” Governor Lamont said. “When I took office four years ago, the state was operating under a $3.7 billion deficit and analysts were projecting more deficits for many years to come. For the sake of our economic growth, I made it a top priority of my administration to turn that instability around. Four years later, we now have a surplus that we achieved without implementing broad-based tax increases, and at the same time we’ve been making historic investments in our pension obligations while leaving the rainy day fund untouched. Today, Connecticut’s fiscal health is stronger than it’s been in decades. Considering the state’s strong financial position, it is time to provide tax relief for Connecticut’s residents.”

This is one of several tax relief measures that will be included in Governor Lamont’s upcoming budget proposal. In addition to reducing the income tax rate, he has already announced a plan to permanently increase Connecticut’s Earned Income Tax Credit from the current rate of 30.5% to 40%, enabling low-income workers to receive an additional $44.6 million in state tax credits. Under that increase and today’s rate reductions, families with children earning less than $50,000 a year will pay no state income tax. He has also announced a plan to restore the pass-through entity tax credit to its original level, fully protecting small businesses from being double taxed under President Donald Trump’s changes to the federal tax code.

“This budget that I am presenting to the legislature provides a smart, strategic, and fiscally-sound plan to provide meaningful tax relief while also maintaining our overall budget discipline so that we can keep Connecticut’s fiscal health strong for many years to come,” Governor Lamont said.

Connecticut ended fiscal year 2022 with a surplus of $1.3 billion, its fourth consecutive year-end surplus for a cumulative total of $2.1 billion over that four-year period. In addition to those surpluses, since fiscal year 2018, the volatility cap provisions that were enacted in the 2017 state budget have directed $7.2 billion in resources to the state’s rainy day fund. The combination of these unprecedented levels of resources has allowed the state to fully recapitalize the rainy day fund to the 15% level of the operating budget, which triggered a statutory provision requiring $5.8 billion to be directed toward the state’s unfunded pension liabilities. This has led to a dramatic change in the state’s financial trajectory from the one that it experienced following the 2008 global financial crisis. These historic payments toward pension obligations have led to credit rating upgrades by all four of the agencies that rate the state’s bonds.

Governor Lamont is scheduled to deliver his budget address to the General Assembly on Wednesday, February 8, 2023, at 12:00 p.m. Documents containing the full details of his biennial state budget proposal will be released at that time.

This press release was made possible by:

GOVERNOR LAMONT AND CONGRESSIONAL DELEGATION ANNOUNCE CONNECTICUT RECEIVING $18 MILLION FEDERAL GRANT TO ADDRESS UNSHELTERED AND RURAL HOMELESSNESS

(NEW HAVEN, CT) – Governor Ned Lamont, Senator Richard Blumenthal, and Senator Chris Murphy today held a news conference in New Haven to announce that the State of Connecticut is receiving an $18 million grant from the U.S. Department of Housing and Urban Development to address homelessness among people in unsheltered settings and in rural communities.

The funds are being directed toward two state agencies – the Connecticut Department of Housing and the Connecticut Department of Mental Health and Addiction Services – and will be distributed over a three-year period with the state receiving approximately $6 million annually. These funds will be used for three separate services:

• Access point to homeless services: The Connecticut Department of Housing will invest $6 million ($2 million annually over three years) toward the state’s newly created regional hubs, which provide an access point to homeless services, including walk-in referrals. Connecticut has seven hubs strategically located throughout the state within each of its regional Coordinated Access Networks. These hubs provide intake services and diversion services, which ultimately can be used to prevent individuals and families from entering homelessness.
• Homeless outreach services: The Connecticut Department of Mental Health and Addiction Services will invest $6 million ($2 million annually over three years) to provide homeless outreach services. These funds will be directed to private, nonprofit agencies and used to hire homeless outreach workers who will identify individuals and families living outside and in places not meant for human habitation. These workers will be able to quickly identify these individuals and families and act as quickly as possible to house them. They will also be able to refer these individuals to other services they may need, such as mental health services, medical support, and employment services.
• Permanent supportive housing: The Connecticut Department of Mental Health and Addiction Services will invest $6 million ($2 million annually over three years) to provide approximately 40 rental assistance vouchers, along with supportive services, that will house people directly from unsheltered homelessness. This allocation for permanent supportive housing will include a services component that will assist unsheltered individuals and families who have rental assistance vouchers but do not have ongoing housing supportive services. This funding will help the participants have a safe, affordable, and permanent place to live and will provide services to assist with addressing issues that may have contributed to their homelessness.

Governor Lamont said, “Stable housing is not only critical for the development of safe communities, but it is a moral imperative. We have an obligation to ensure that everyone has access to a safe and stable place to call home. Here in Connecticut, we have a strong network of support services that are not only focused on providing housing for those in need, but also connect people to the related services that can cause housing instability, such as those related to mental health, employment, and healthcare. This $18 million commitment Connecticut is receiving for homelessness support will provide a significant boost for our state. I appreciate the Biden administration and the U.S. Department of Housing and Urban Development for their commitment to addressing homelessness, not only in our state but throughout the country.”

Senator Richard Blumenthal said, “This $18 million in federal funding is a lifeline. As temperatures drop to dangerous levels in Connecticut today, too many people are still struggling to find shelter in our state. These critical funds will be transformative and will no doubt help many vulnerable people at the time when they need it most. I am proud to see these funds delivered to Connecticut and will keeping fighting for more resources to address this crisis.”

Senator Chris Murphy said, “Every person deserves a safe, warm, and stable place to call home. We have a lot of work to do to address the shortage of affordable housing in our state, but this $18 million from the Department of Housing and Urban Development will go a long way to ensure more people can access support services and ultimately find permanent housing. It’s an enormous investment in Connecticut’s work to tackle homelessness, especially for those without shelter and those in rural communities.”

U.S. Representative John B. Larson (CT-01) said, “It is a real honor for Connecticut to be one of the first states in the country awarded funding from HUD to offer services for the homeless population, both in the urban and rural corners of our state. These funds will support new hubs to offer resources for individuals without phone or internet access, permanent housing options for residents at risk for homelessness, and dedicated funding to support homelessness initiatives in Litchfield County. I am proud these groundbreaking initiatives are all made possible by an $18 million federal grant.”

U.S. Representative Joe Courtney (CT-02) said, “We have some outstanding leaders in towns throughout eastern Connecticut who have been successful helping people struggling with homelessness to get back on their feet. The only barrier to sizing up that success is a lack of resources. Today, Connecticut is becoming one of the first states nationwide to receive federal funding through the Department of Housing to help ramp-up services that provide direct, critical assistance to people in our communities without homes or shelters – helping folks get out of the cold, into safe housing, and on the way towards a healthy and sustainable future. Resources like these are an investment in the hearts of our communities, and I’m proud to know it’s being made possible with federal funding.”

U.S. Representative Rosa DeLauro (CT-03) said, “We have to do everything we can to provide support for people and families who are experiencing homelessness throughout Connecticut. This $18 million in funding will now support the work of the newly created hubs that provide an access point to services for unsheltered individuals who do not have access to a phone to contact 2-1-1 emergency services. Additionally, this funding will be used for supportive housing to help those unsheltered who have rental assistance vouchers but lack critically needed support services like case management and access to healthcare. Increasing coordinated access, diversion services, and homeless services systems will allow our communities to intervene before individuals and families even become homeless.”

U.S. Representative Jim Himes (CT-04) said, “It is our moral duty to protect our communities’ most vulnerable citizens. This $18 million will be a transformative lifeline for families across Connecticut, helping them access health care, diversion services, and temporary housing through the cold winter months.”

U.S. Representative Jahana Hayes (CT-05) said, “Everyone deserves a safe place to call home. Today, I join in celebrating $18 million in federal funds coming through the U.S. Department of Housing and Urban Development to help address homelessness across Connecticut. This infusion of federal funding will promote healthy and safe communities where all can live in dignity.”

This $18 million in funding for Connecticut is part of a larger announcement from the U.S. Department of Housing and Urban Development to provide $315 million in grants for homelessness services throughout the country.

U.S. Department of Housing and Urban Development Secretary Marcia L. Fudge said, “Homelessness is a crisis, and it is solvable. Housing with supportive services solves homelessness. That’s why, for the first time the federal government is deploying targeted resources to meet the needs of people experiencing homelessness in unsheltered settings or in rural areas. With these grants and vouchers, HUD is filling this gap and giving communities the resources and tools to improve housing and health outcomes for people on the streets, in encampments, under bridges, and in rural areas.”

Connecticut Department of Housing Commissioner Seila Mosquera-Bruno said, “On cold days like today, we need to ensure that our unsheltered citizens have access to a warm place. This generous HUD award will allow Connecticut to expand our services to the unsheltered population by providing funding to increase homeless outreach, coordinate entry to the newly created hubs, and permanent supportive housing.  With these funds, the Department of Housing is excited to work with our partners to end unsheltered and rural homelessness across Connecticut.”

Connecticut Department of Mental Health and Addiction Services Commissioner Nancy Navarretta said, “This funding will enhance DMHAS efforts to provide targeted outreach to persons experiencing unsheltered homelessness, connecting them to housing services across Connecticut. Our goal is to ensure that people exit homelessness quickly and are able to address the factors that impacted, and may have exacerbated, their housing crisis. DMHAS looks forward to continued partnership with HUD, sister state agencies, our dedicated service providers, and those we serve.”

Anyone experiencing homelessness is strongly urged to call 2-1-1 to get connected to supportive services.

This press release was made possible by: