HARTFORD, Conn. (WTIC Radio) - Senate Republicans are proposing a temporary sales tax reduction to bring relief to Connecticut families that are struggling financially during this period of inflation.
Republican leaders call on the state legislature to consider reducing the sales tax from 6.35% to 5.99% and eliminating the additional 1% meals tax from February 15 through the end of 2022.
According to republicans, the state budget can withstand the proposed tax cut because it's not only in surplus but it's also expected to grow with revenue due to surging inflation.
The state is expected to collect over $155 million more in state sales tax revenue and over $20 million more in gross receipts tax revenue than originally projected in fiscal year 2022, Senate Republican Leader Pro Tempore Paul Formica (R-East Lyme) explained.
"Connecticut's state budget is actually benefiting from the inflation as the sales tax and gas tax bring new and unplanned-for revenue to the state budget," Senate Minority Leader Kevin Kelly (R-Stratford) said. "So, as the state budget is getting healthier, family budgets are getting crushed."
With this proposal, Senate Republicans estimate taxpayers saving over $315 million dollars, officials said.
Kelly stressed the need to provide immediate relief to Connecticut families given that they are facing challenging times right now.
Residents do not need "a tax credit that those that are fortunate enough to have a job and be filing a tax return in Connecticut can get maybe next April or whenever they file their income tax next year. The inflation is hurting families today and this is a quick way to get some relief to families now," Kelly said.
Senate President Pro Tempore Marin Looney (D-New Haven) countered in a written statement that the current state budget is already helping Connecticut's families.
"Our enacted state budget is already assisting Connecticut's working families by increasing the state's earned income tax credit, enhancing payments to cities and towns for public education, providing a substantial boost in grants through our Payment in Lieu of Taxes program (PILOT), and supporting social services upon which many families rely. Democrats have also built more progressivity into our tax code over the years," Looney said.
Senate Republicans call their proposed tax relief a first step in helping Connecticut become a more affordable state. They plan to unveil more proposals in the next few weeks that will address high healthcare costs and provide support for working families, among other issues.
Looney stated that Democrats will also be sharing revenue proposals in the coming session, including ways to reduce Connecticut's local property tax burden.
"There will be a time for a comprehensive discussion of various revenue proposals and to closely examine questions such as who will benefit most and what Connecticut can afford in both the short-term and the long-term," Looney said.