Gov. Dannel Malloy has scrapped plans to issue $55 rebate checks.
He first presented the idea as part of his State of the State Address in February.
The governor wanted to use a portion of the anticipated $500 million surplus. On Monday, there was a change of plans.
"We're just not going to have enough money as we thought because of one particular tax," said Malloy, referring to the capital gains tax.
The amount of money the state collected so far this year is millions below expectations.
Not only are the rebates gone, but so too is the plan to put $100 million into the state pension fund.
Malloy said Monday that there is still a surplus and he expects that money will be put into the rainy day fund.
All along, Republicans have argued that the rebate plan was all about politics.
"This was obviously an election year ploy," said Sen. Rob Kane. "He was trying to win back votes from people who were certainly upset with this governor."
The governor denied that charge.
He said he wants to focus efforts on the issues of education reform and job creation.