CT Democrats Propose $3.2 Billion Tax Increase: GOP Leaders Respond

April 22, 2021

Senate Republican Leader Kevin Kelly (R-Stratford), Senate Republican Leader Pro Tempore Paul Formica (R-East Lyme) and State Senator Henri Martin (R-Bristol), ranking member on the Finance, Revenue & Bonding Committee, released the following statements regarding the Finance Committee’s proposed $3.2 billion tax increase CT Democrats intend to vote to advance today:


Sen. Kelly said: “Connecticut is growing more unaffordable by the day and families are struggling. Yet Democrats are pushing for a tax increase totaling $3.2 billion over 3 years. Even as we see historic levels of federal funding coming to Connecticut and a surplus this year, Democrats cannot help themselves. They want even more. They think Connecticut residents don’t pay enough already. Some of these tax increases are regressive and will hurt those most struggling today. For example, a mileage tax on trucks will result in higher costs on products they transport, like groceries and home heating oil. Canceling property tax relief for middle class families is another punch in the gut. And if the billions in new taxes drive out Connecticut’s wealthiest taxpayers, it is the working and middle class who will be left behind to foot the bill. We’ve seen it before. In addition, this plan skirts the state’s spending cap. If Democrats really cared and fought for those policies, then they wouldn’t be looking at every turn to get around them and move our spending offline and out of transparency. Circumventing these caps is turning our government into a sham.”


Sen. Formica said: “Democratic proposals are purposely circumventing our state’s bipartisan spending caps with this plan by directing revenue into a newly created offline account outside of the state’s spending cap. While they use the historic size of the rainy day fund as an argument for more spending, Democratic proposals in this package are completely abandoning the smart fiscal policies that resulted in the billions in that fund today. This Democratic package purposely moves revenue and spending offline to evade taxpayer protections. It flies in the face of our caps and could possibly even be a violation of our bond covenants. There are also at least $2 billion in one time revenues in this proposal that will result in an equal sized budget hole in the next budget.”


Sen. Martin said: “Connecticut ranks dead last in our nation for job growth and personal income growth. We never recovered from the Great Recession and lost over 120,000 jobs in 2020 having only recovered approximately 63% of the of 300,000 jobs lost during the pandemic. Economists have said we have one of the worst economic performances of any state, and we currently have the second highest tax rate in the country. Taking even more from Connecticut residents at this time is going to make our state even more unaffordable and drive out job creators when we should be laser focused on growing jobs and opportunity. It will leave behind the working and middle class to pick up the tab at a time when they are already struggling.”


The Democrats’ plan includes the following taxes:

  • A mileage tax on trucks ($45 million in FY23 and $90 million in FY 24)
  • Cancels property tax relief ($53 million tax increase annually in FY 22 and FY 23)
  • Cancels tax relief for job creators, 10% corporate tax surcharge ($80 million in FY 22, and $50 million annually in FY 23 and FY 24)
  • A new $500 million annual consumption tax described by Democrats as a way to increase the sales tax rate on higher income residents
  • Imposes a convenience fee for credit/debit card use ($5 million annually in FY 23 and FY 24)
  • New taxes related to gaming ($30.5 million in FY 22, $43.1 million in FY 23, $58.8 million in FY 24)
  • New social media advertising tax ($150 million in FY 22, $162 million in FY 23, $175 million in FY 24)
  • New 2% surcharge on capital gains ($262 million annually)
  • New taxes related to cannabis legalization ($11.1 million in FY 22, 39.5 million in FY 23, 73.1 million in FY 24)