As Inflation Surges, CT Senate GOP Renew Calls to Reduce Sales Tax

February 28, 2022

Inflation at 40 year high as war expected to push prices up even further.

Public Hearing on Sales Tax Cut Proposal Scheduled for Thursday, March 3rd

 

HARTFORD – Senate Republican Leader Kevin Kelly (R-Stratford), Senate Republican Leader Pro Tempore Paul Formica (R-East Lyme) and Senator Henri Martin (R-Bristol), ranking member of the Finance, Revenue & Bonding Committee, are calling on lawmakers to take immediate action to reduce the state sales tax and provide families with financial relief as inflation across the country accelerates in the wake of Russia’s invasion of Ukraine.

 

The lawmakers are urging the public to testify at Thursday’s Finance, Revenue & Bonding hearing on the Senate Republicans’ proposal to cut the state sales tax and eliminate the meals tax on prepared food during this time of historic inflation.

 

“Inflation is here. Relief must be too,” said Senate Republican Leader Kevin Kelly. “Connecticut families are struggling. Every day it is getting more and more expensive to take care of our loved ones and keep our family budgets balanced. Our state must do everything it can to drive down costs wherever possible and that includes cutting taxes now. A sales tax cut is the most direct way to provide immediate relief to all families and to give back the windfall tax revenue the state receives as a result of inflation.”

 

On Friday, the Commerce Department released data revealing that prices rose at their fastest level in decades, reaching a nearly 40-year high. The Personal Consumption Expenditures index data also shows that inflation is speeding up on a monthly basis. Rising prices of oil, gas, and other commodities tied to Russia’s invasion of Ukraine are expected to further increase inflation.

 

“Connecticut’s state budget is benefitting from inflation as the state sales tax and gas tax brings in new, unplanned for revenue – a result of surging prices. Meanwhile, CT residents are struggling to balance their own family budgets with no relief in sight as inflation drives up the costs of everything, from food to energy to home heating oil,” said Senate Republican Leader Pro Tempore Paul Formica. “This proposal will provide relief today when people need it most. It will direct the influx in tax revenue back to residents and provide immediate relief from the crushing impact of inflation.”

 

“Families are struggling to make ends meet. Connecticut was already unaffordable for far too many of its residents and inflation is exacerbating the challenges faced by our families,” said Senator Henri Martin. “Our state can help families with their kitchen table economics by cutting taxes and reducing expenses. I thank the committee for raising our proposed tax cut and encourage CT families to make your voices heard at Thursday’s public hearing.”

 

Senate Republicans have proposed to reduce the sales tax from 6.35% to 5.99% and eliminate the additional 1% meals tax through the end of calendar year 2022.

 

Surging revenues could enable the state to reduce the sales tax even further or extend the reduction into next year.

 

The current proposal using revenue estimates from January will result is a temporary tax reduction totaling $315.1 million ($132.3 million in FY 22 and $182.8 million in FY 23) during the difficult months ahead.

 

The state budget remains whole even with this tax reduction, and historic contributions to the state’s rainy day fund would be preserved under this plan.

 

The public can weigh in on the proposed tax cut by submitting written testimony or testifying virtually on Thursday.

 

To submit written testimony:

  1. Send an email to FIN[email protected].
  2. In the subject line, write:  I Support Senate Bill 22
  3. Include your name and town

 

To testify virtually on Thursday, March 3rd at the 9:30 AM hearing:

  1. Register to testify virtually using the Online Testimony Registration Form (registration will close on Wednesday, March 2, 2022 at 3:00 P.M.) If you do not have internet access, you may provide testimony via telephone.  To register to testify by phone, call the Phone Registrant Line at (860) 240-0462 to leave your contact information.
  2. Email written testimony in Word or PDF format to [email protected].  Testimony should clearly state your name and “I Support Senate Bill 22.”

 

Speakers will be limited to three minutes of testimony.  The Committee encourages witnesses to submit a written statement and to condense oral testimony to a summary of that statement. After registering, you can find your speaker order number posted on the Finance, Revenue and Bonding Committee website on Wednesday, March 2, 2022 at 6:00 P.M. under Public Hearing Testimony. The public hearing can be viewed via YouTube Live.  In addition, the public hearing may be recorded and broadcast live on CT-N.com

 

Learn more about the sales tax cut proposal at BetterWayCT.com. The proposal is part of the Senate Republican leaders’ “Better Way to an Affordable Connecticut” plan.