In a letter to town leaders, Governor Malloy today reaffirmed his commitment to providing middleclass tax relief to Connecticut's working families. In addition to investing in job creation and education, the Governor's proposal would eliminate the car tax for vehicles valued below $28,000 and reinstate the sales tax exemption on clothing under $50.
In the letter, the Governor writes:
"My budget is focused on the following priorities: growing jobs, investing in education, and finding ways to provide tangible relief to our middle class, including relieving them of the most hated and unfair tax in Connecticut -- the car tax -- and by reinstating the sales tax exemption for some clothing.
"My plan also sends at least the same amount of state dollars to cities and towns as they currently receive. It's true that aid comes in different ways, which will necessitate adjustments on your end. But at a time when states across the country are decimating local aid, no city or town in Connecticut will receive less total funding from the state than it did last year, and many will receive more.
"To do all that without raising taxes, my plan also contains more than $1.8 billion in savings from the state's current services. That's $1.8 billion worth of tough decisions about how Connecticut serves its residents.
"This is a tough budget, built for tough times. Connecticut is making hard decisions and setting priorities in order to live within its means. I understand that cities and towns will need to make their own hard decisions. We're all public servants, but we're also citizens and taxpayers; we can hopefully agree that all levels of government must change with the times, find savings, and operate efficiently."
The Governor's proposal to eliminate the car tax gives towns and cities the option of implementing the proposal on July 1, 2013. Statewide implementation will begin on July 1, 2014. Both private and commercial vehicle will be covered by the exemption. In addition to lowering costs for state residents, the proposal will also lower costs to municipalities, who will no longer be responsible for collecting the tax.
The exemption on sales tax for clothing will cover items under $25 beginning July 1, 2014, with a full restoration of the $50 exemption by 2015.