Gov. Ned Lamont on Friday told Connecticut’s largest business group he’ll make property tax relief a priority this year and will leave to the General Assembly any action on business tax relief.
“I’m going to present to the legislature a plan for significant property tax reform that particularly hits, I think, the middle class, to provide relief there,” he said at the annual economic outlook meeting of the Connecticut Business & Industry Association.
The Democratic governor, who has announced he’ll seek a second term this year, said he also hopes to eliminate taxes on pensions.
Pressed on business tax relief, Lamont advised CBIA President Chris DiPentima to work with the administration and “our friends in the legislature to see what the priorities are.”
If tax cuts were tied to job creation and economic growth, that would make “it all the more compelling and a much easier case for me to make,” the governor said.
DiPentima said business tax relief would cost the state about $200 million, but no tax cut or credit alone would be significant. For example, a credit for manufacturing apprenticeships would cost the state a relatively small $1.4 million, but would send a “huge message” to manufacturers.
Lamont said he and the General Assembly should “take a good, hard look at the property tax” on homes and cars.
“It’s a tax that’s fixed. You’ve got to pay it during bad times and good times,” he said.
“It’s unforgiving in that sense. It hits the middle class particularly hard,” Lamont said. “That will be one of my strong initiatives… to do what we can to reduce the property tax and expand the base of who gets access to property tax reduction and also focus on the cars.”
Lamont campaigned in 2018 on property tax relief, saying local officials rely too heavily on taxing homes and vehicles to fund essential services. But the idea hasn’t taken off in the legislature. The governor said earlier this month he will push for expanding the property tax credit.
Lamont also would not agree to business requests for additional federal pandemic aid to help reduce debt in the unemployment insurance fund. The state has used relief from Washington to pay back about $150 million of $700 million borrowed from the federal government when jobs vanished during the pandemic and unemployment claims soared.
“The rest of it as of right now would fall on the shoulders of the business community come around November when the assessments come,” DiPentima said.
Lamont said he is a “little hesitant” and that he has to decide if it’s more important to use federal money to buy additional testing resources.
Interest rates are low, making borrowing cheaper and unemployment claims have plummeted as the economy strengthens and businesses hire workers, he said. The state has paid down an additional $250 million, the governor said.
DiPentima said in an interview following the meeting he was not surprised by Lamont’s priorities. With about three weeks until the General Assembly’s Feb. 9 start, the governor and the House and Senate Democratic and Republican caucuses are setting their priorities, he said.
Lamont, who wore black to mark the death Thursday of rocker and one-time Connecticut resident Meat Loaf, used his appearance at last year’s annual CBIA meeting to rule out broad-based tax increases that helped set the tone for the legislative session.
With a state budget surplus and an election in 2022, Lamont and state legislators are now debating proposed tax cuts.
Senate Republicans have called for temporarily cutting the state’s sales tax and eliminating an additional 1% tax on meals at restaurants and supermarkets starting on Feb. 15. The total tax cut by Republicans would be $315 million for the remainder of the 2022 calendar year.