Connecticut's Shrinking Surpluses Threaten 2027 Tax Cut Plans
Connecticut's own budget projections show that proposed tax cuts for low- and middle-income families could become unaffordable if the economy weakens, especially now that pandemic-era federal aid has run out. Advocacy groups, including Connecticut Voices for Children and the Connecticut Project, are pushing a child tax credit and a renters' credit ahead of the 2027 legislative session starting January 6, while Republican lawmakers favor broader income tax rate cuts. State officials already diverted $1.2 billion this year to cover Medicaid shortfalls, soften federal human services cuts, and boost town aid, using one-time exceptions to spending caps that are not guaranteed to continue. The piece highlights that without raising taxes on wealthier residents, something not done since 2015, the state may struggle to sustain both tax relief and core services like Medicaid if a recession hits.