House GOP Unveils $27.9B Budget With $420M Tax Relief

House Republicans unveiled a $27.9 billion budget proposal Tuesday that promises $420 million in annual tax and fee relief to Connecticut residents, but the plan depends on financial maneuvers that shift hospital payments outside the state’s spending cap and on winning a pending legal dispute with New York.

The minority caucus pitched the plan as a structural alternative to Ned Lamont’s one-time $500 million rebate, which would send most residents $200 each in late October. Republicans have been blunt about why they oppose the timing. The rebate would land days before voters weigh in on whether to give Lamont a third term as governor.

“We’re not talking about a handout because we’re running in November,” said Rep. Joe Polletta of Watertown, the ranking House Republican on the Finance, Revenue and Bonding Committee, at a Tuesday morning press conference. “We’re talking about something that people can look to two, three, four, five, 10 years down the line.”

The centerpiece of the GOP relief plan is a $285 million income tax cut aimed at middle-class households. Republicans would raise an existing credit that offsets municipal property tax bills from $300 to $650 and expand who qualifies. Under current law, individuals earning more than $109,500 and couples above $130,500 receive no credit at all. The House GOP plan would not phase out eligibility until individual income exceeds $130,000 and joint income tops $200,000, while the phase-down would begin at $70,000 for individuals and $100,000 for couples.

The caucus would also deliver $82 million in additional annual relief through a new exemption on tip earnings and by converting the state’s partial tax exemption on Social Security income into a full exclusion.

Beyond the income tax cuts, the plan boosts education aid to municipalities by more than $335 million and includes provisions aimed at countering rising insurance premiums, which have become one of the sharper pressure points for residents across Fairfield County and the rest of the state.

House Minority Leader Vincent J. Candelora of North Branford framed the proposal in straightforward terms. “Our plan keeps us under the spending cap and puts real money back in people’s pockets, whether through their property tax bills or their insurance premiums,” he said.

But staying under the spending cap requires some engineering. The Republican plan shifts hundreds of millions of dollars in hospital payments to outside the cap’s boundaries, a move that critics could argue obscures the true cost of the budget. The plan also factors in revenue from Connecticut’s ongoing legal fight with New York over income taxes tied to remote workers. That dispute is far from settled, and basing a budget on its outcome introduces real uncertainty.

The plan would also cut undocumented residents from state-funded health insurance programs and delay hiring across many state agencies, two provisions that are certain to draw opposition from Democrats who hold majorities in both chambers.

Republicans say they are not expecting their full proposal to pass. The more realistic goal is to pull the final budget negotiations in their direction before the regular General Assembly session closes May 6. Leadership in both parties is working toward adopting a budget for the 2026-27 fiscal year before that deadline.

Whether Democrats will absorb any of the GOP’s tax relief framework, especially the expanded property tax credit or the Social Security exemption, could depend on how the final revenue picture develops over the next few weeks. Lamont has shown some openness to middle-class tax relief in past budget cycles, though the governor and his party have defended the rebate as direct and immediate help for working families.

For residents in cities like Bridgeport watching their property tax bills climb, or in Fairfield and Trumbull feeling the squeeze from insurance costs, the political back-and-forth over mechanisms and timing can feel distant. What matters is whether any version of relief actually reaches them. Both parties are claiming they have that answer. The final budget will show who got closer.