For almost two years, the state and federal governments have been trying to help people survive the pandemic with new programs and aids. Now that inflation is rising and the COVID threat is decreasing, the best thing we can do to help lower taxes for the working and middle classes in Connecticut.
For the first time in a long time, our state’s finances are actually able to do so while paying off debt while maintaining our Rainy Day Fund. Just last week, the impartial Office of Fiscal Analysis certified budget surpluses of around $ 200 million for each of the next two fiscal years.
While this is undoubtedly welcome news for our state, it does not tell the full story. Wall Street and our Treasury are fine, but Main Street is not. By acting now, we can bring real relief to people and families at a time when they need them most. Here are two options:
First, increase the property tax credit. Governor Ned Lamont is absolutely right in proposing increasing the state’s property tax credit and expanding its eligibility so that it reaches more people.
Nothing harms Connecticut’s potential for economic growth more than our outdated property tax system. Earlier this year, I introduced a law to limit the annual increase in property tax. The legislation would encourage cities to reduce the need for increases by sharing local services.
We in the state government have to work together with our partners in local government to bring structural changes such as “cap and share” into the system. But in the meantime, we can make Connecticut more affordable for homeowners by working with the governor on a new and improved property tax credit.
Second, lower income tax for working parents. Even before COVID or the recent rise in inflation, the cost of raising children here was enormous. According to the Economic Policy Institute, the average cost of childcare is $ 1,292 per month. That’s nearly 20 percent of the median income for a Connecticut family and 75 percent of the income of a minimum wage worker.
And that’s just childcare. Add groceries, clothes, and diapers and it’s easy to see how expensive it is on a monthly basis to be a parent.
Thanks to New Haven MP Rosa DeLauro and President Biden, American parents have received an expanded version of the existing federal child tax credit, but sadly, those cherished payments will expire next year. While the latest version of the president’s Build Back Better bill calls for a one-year extension of the program, watching the traffic collapse in Washington and the rising cost of essentials, many parents are right to worry about the loss of credit.
We can calm their minds by creating a government version of the child tax deduction, which I proposed earlier this year.
By creating this new child tax credit, we can cut income tax by a staggering 40 percent for any Connecticut family with two children who are making less than $ 200,000 a year. This tax cut – the largest in the state’s history – would mean hundreds of thousands of Connecticut taxpayers an additional $ 1,200 to refill their tanks and get groceries on the table.
The government has hit the moment in the past two years when it comes to helping the people. We can now address the moment in another way, by providing real and long overdue tax breaks for those who need it most: Connecticut’s working class and middle class.
Sean Scanlon, of Guilford, is the Democratic Representative for the 98th District and co-chair of the Finance, Revenue and Bonds Committee.