Lawmakers Hear Broad Push for Child Tax Credit, Capital‑Gains Surcharge and Other Revenue Changes

The Finance, Revenue and Bonding Committee heard extended testimony on a package of revenue bills aimed at shrinking Connecticut’s income and wealth gaps and funding state priorities.

Supporters — including child‑advocacy groups, labor unions and nonprofit coalitions — urged lawmakers to enact a refundable Connecticut Child Tax Credit that would send direct, flexible payments to households with children and to adopt a capital‑gains surcharge and a statewide property levy on very high‑value residential real estate. Witnesses said the proposals would reduce child poverty, stabilize households and generate predictable revenue to fund early‑childhood programs, school meals, special education and local aid.

Opponents, including business groups and some tax policy analysts, cautioned that the capital‑gains surcharge could make the state less competitive for investment and high‑wealth taxpayers. Some raised concerns that new revenue instruments could be deployed in ways that would not address the state’s long‑term structural costs. Several speakers asked that any new receipts be accompanied by clear spending plans.

Committee members and witnesses also discussed changes to Connecticut’s fiscal “guardrails,” the set of caps and formulas that limit how the state saves and spends one‑time and volatile revenue. That technical detail framed many of the fiscal tradeoffs: supporters of new revenue argued the guardrails should be adjusted so lawmakers can invest one‑time or tax‑windfall revenue in ongoing services; critics said relaxing caps risks repeating past budget volatility.

What’s next: The committee did not vote. Members signaled interest in further technical work on receipts estimates, incidence studies and models showing how different credit designs (refundability, phase‑ins, eligibility limits) would affect budget and poverty outcomes.