Gov. Ned Lamont today is proposing several tax cuts, including reducing the motor vehicle tax rate, expanding and increasing property tax credits and more.
Lamont said his proposals include $336 million in tax cuts.
What to Know About Gov. Lamont's Tax Cut Proposals:
Motor Vehicle Property Taxes
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Lamont said he will be asking the state legislature to approve a law to reduce the motor vehicle property tax rate affecting 1.7 million vehicles.
His proposal would lower the mill rate cap on motor vehicle property taxes from 45 mills to 29 mills and reimburse local governments for the revenue impact that comes from it.
His office said that would affect more than 1.7 million vehicles, 77% of vehicles, in 103 towns and cities and it would apply to passenger, commercial, and combination vehicles.
Reimbursements to municipalities would cost an additional $160.4 million above the current appropriation, according to Lamont’s office.
Property Tax Credits
Lamont’s proposal includes restoring full eligibility for the property tax credit.
His office said that under current state law, the property tax credit is limited to people over the age of 65 or those with dependents.
He is proposing expanding the credit to all adults within the current income limits -- $109,500 for single filers or $130,500 for joint filers - and he's proposing to increase the property tax credit from $200 to $300.
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Pension, Annuities State Income Tax Exemption
Lamont is also proposing to accelerate by three years – from 2025 to 2022 – the planned phase-in of the pensions and annuities exemption under the state income tax.
His office said that under current state law, income year 2022 is scheduled for a 56% exemption as the fourth year of a seven-year phase-in of the exemption, which is scheduled to reach 100% by 2025.
Single filers with an adjusted gross income less than $75,000 and joint filers with less than $100,000 qualify for the exemption.
Student Loan Tax Credit
Lamont is also proposing expanding the student loan tax credit, which gives employers a 50% tax credit on up to $5,250 in payments toward an employee’s student loan.
Lamont said the program would leverage business expenditures alongside the state tax credit to expand eligibility to all loans issued by the Connecticut Higher Education Supplemental Loan Authority and the change would be retroactive to Jan. 1, 2022.
The proposal comes as the state is projecting an operating surplus of $1.48 billion.