Connecticut’s already regressive tax system swung even more sharply onto the backs of its poorest residents during the coronavirus pandemic’s first year, according to a new fairness study from Gov. Ned Lamont’s administration.
The lowest-earning 10% effectively spent almost 40% of their income in 2020 to cover state or municipal tax burdens, more than five times the rate faced by Connecticut’s highest earners – and two-and-a-half times the statewide average, according to the tax incidence analysis released Thursday by the Department of Revenue Services.
The 39.9% state and municipal tax rate effectively paid by the poorest 10% also is up dramatically from the nearly 26% rate assigned to that same group by a 2022 DRS tax fairness study, which analyzed data from 2019.
Meanwhile, taxpayers in the two middle groups paid 13% and 11.5%, respectively, of their income to cover tax burdens in 2020, up from 9.2% and 8.6% in 2019.
“This latest study just confirms what people in Connecticut have been feeling in their wallets for the last several years — a dangerous combination of historic inflation, an upside-down tax system and an extreme disinvestment in critical public services and infrastructure,” said Norma Martinez-HoSang, director of Connecticut For All, a coalition of more than 80 labor, faith and civic organizations that has advocated for higher tax rates on wealthy households and corporations to finance relief for low- and middle-income families.
The study breaks Connecticut’s earners into deciles, or groups that earned 10% of all statewide income.
For example, it took the poorest 883,552 tax filers to earn about $19.3 billion, which was 10% of all statewide earnings in 2020. This the group that paid almost 40% of its income to state and municipal tax burdens.
Unlike in past reports, the administration did not include a projected income range for the households in this group. But dividing $19.3 billion by 883,552 filers yields a rough average income of slightly more than $21,843 per year.
The second decile includes the next-highest earners, another 316,630 filers, who also made $19.3 billion. Their effective tax rate was 19.8%, and their average income was $60,960.
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The highest decile, the top 10%, involves 478 filers that earned $19.3 billion. This is the group that paid 7.3%, or less than one-fifth the rate of the poorest decile, and earned an average of $40.3 million.
Roughly two-thirds of all revenues generated by state and local government combined in 2020 came from property, sales and other taxes that largely are regressive in nature, the study found.
A regressive tax does not adjust rates based on a household or business’s earnings or wealth. A progressive levy, such as the state income tax, features multiple rates that collect more as the filer’s income increases.
A second problem with regressive taxes is that responsibility for the bill can more easily be shifted, something that’s particularly burdensome for poor households, the study found.
For example, renters effectively pay some or all their landlords’ property taxes. Gasoline distributors shift wholesale fuel tax burdens onto service stations, which pass the full cost on to motorists.
As a supplement, the report also covered a second methodology that relies upon only half of the tax burden shifts that the primary section of the report assumes. But even under this scaled back version, the lowest earning 10% of filers pay an effective rate of almost 33%, while the richest 10% pay 7.3% and the statewide average is 13.4%.
Lamont, a Greenwich businessman and fiscally moderate Democrat who says higher tax rates would prompt Connecticut’s wealthy to flee the state, said through a spokeswoman that his administration has been and continues to work to make the state’s overall tax system more progressive.
“Gov. Lamont is strongly committed to making our tax structure more progressive so that all Connecticut residents have an opportunity to succeed here,” spokeswoman Julia Bergman said. “That’s why, in recent years, the governor and the legislature have cut taxes for working families, boosted the Earned Income Tax Credit and expanded exemptions on certain pension and annuity earnings to benefit seniors.”
Bergman was referencing a series of tax changes enacted last year that represented the single-largest state income tax cut in Connecticut history, a package expected to save low- and middle-income families $200 to $400 each next fiscal year, more than $415 million in total.
Lamont and legislators also enacted a broad package of tax cuts in 2022 that included temporary relief, such as a 13-month gasoline tax holiday and an income tax rebate for households with children. But it also expanded a state income tax credit that offsets a portion of municipal property tax burdens and reduced the statewide property tax cap on motor vehicles from 45 mills to 32.46 mills. (One mill generates $1 of tax revenue for every $1,000 of assessed property value.)
Because tax fairness studies routinely lag several years of tax data, the recent relief Lamont approved is not included in the latest analysis.
“There’s definitely value in looking at this [study], but also I think the next set of studies will really tell the tale in terms of the progressivity that’s been implemented by this governor,” said Department of Revenue Services Commissioner Mark Boughton.
But critics counter that Connecticut’s tax system has overburdened the poor and middle class for decades, and recent relief won’t reverse an overall trend toward worsening inequity. They say economic damage caused by the pandemic continues even now, while the 40-year high in national inflation reached in mid-2022 also set Connecticut families back.
“We expect Gov. Lamont to respond with a reminder of recent tax cuts, which will have little impact on our state’s extreme economic inequities,” Martinez-HoSang said, adding that an income tax surcharge on the capital gains earnings of Connecticut’s wealthiest families could create significant economic change.
Connecticut Voices for Children, a progressive, New Haven-based policy think-tank, renewed its call Thursday for a new state income tax credit for low- and middle-income filers with children. It argues this credit could channel $300 million annually to assist about 80,000 kids.
Connecticut Voices’ executive director, Emily Byrne, said her group has just begun its review of the latest tax fairness report but said the overall problem the General Assembly faces is clear.
“The report not only reaffirms that our state’s tax system is regressive, but it also reaffirms why this report is so important,” she said, “because it allows the legislature to make informed decisions. … It’s also clear that more families need help.”
The Yankee Institute, a conservative fiscal policy group in Hartford, had just begun its review of the tax study late Friday. But spokesman Bryce Chinault said, “This report demonstrates why the recent income tax reforms were so important to Connecticut residents, and why the fiscal guardrails are vital to building upon that success.”
Those “guardrails” are a reference to caps on spending and borrowing and other savings programs that have helped reduce state debt by billions of dollars since 2020, which advocates say enables state government to channel more resources to cities and towns.
Members of the legislature’s tax-writing Finance, Revenue and Bonding Committee received the report Thursday morning, and leaders said the 77-page analysis would get close attention in the coming weeks.
But both Sen. John Fonfara, D-Hartford, who co-chairs the panel, and Rep. Holly Cheeseman of East Lyme, ranking House Republican on finance, said it’s clear Connecticut must find a way to ease property tax burdens.
The property tax generated nearly $12 billion in revenue in 2020, more than any other state or municipal tax did, and represented 38% of all tax revenue raised in Connecticut that year.
Fonfara pushed two years ago to boost rates on Connecticut’s richest families and on large corporations and set up a new fund to support economic development and other services in the state’s poorest cities. It was blocked by Lamont and other fiscal moderates and conservatives.
House Speaker Matt Ritter, D-Hartford, brokered a compromise that abandoned the tax hikes but authorized $175 million in annual bonding for urban investment that began in the 2022-23 fiscal year and runs through 2026-27.
The property tax “punishes those who have the least income,” Fonfara said Thursday, adding that the high mill rates in Connecticut’s urban centers make it very hard to attract commercial and industrial development. “It pits one town against another.”
It’s a scheme made famous by a nearly 30-year-old episode of the sitcom Seinfeld.
Hoping to earn a quick buck, two characters load a mail truck full of soda bottles and beer cans purchased with a redeemable 5-cent deposit in New York, before traveling to Michigan, where they can be recycled for 10 cents apiece. With few thousand cans, they calculate, the trip will earn a decent profit. In the end, the plan fell apart.
But after Connecticut raised the value of its own bottle deposits to 10 cents in 2024, officials say, they were caught off guard by a flood of such fraudulent returns coming in from out of state. Redemption rates have reached 97%, and some beverage distributors have reported millions of dollars in losses as a result of having to pay out for excess returns of their products.
On Thursday, state lawmakers passed an emergency bill to crack down on illegal returns by increasing fines, requiring redemption centers to keep track of bulk drop-offs and allowing local police to go after out-of-state violators.
“I’m heartbroken,” said House Speaker Matt Ritter, D-Hartford, who supported the effort to increase deposits to 10 cents and expand the number of items eligible for redemption. “I spent a lot of political capital to get the bottle bill passed in 2021, and never in a million years did I think that New York, New Jersey and Rhode Island residents would return so many bottles.”
The legislation, Senate Bill 299, would increase fines for violating the bottle bill law from $50 to $500 on a first offense. For third and subsequent offenses, the penalty would increase from $250 to $2,000 and misdemeanor punishable by up to one year in prison.
In addition, it requires redemption centers to be licensed by the state’s Department of Energy and Environmental Protection (previously, those businesses were only required to register with DEEP). As a condition of their license, redemption centers must keep records of anyone seeking to redeem more than 1,000 bottles and cans in a single day.
Anyone not affiliated with a qualified nonprofit would be prohibited from redeeming more than 4,000 bottles a day, down from the previous limit of 5,000.
The bill also seeks to pressure some larger redemption centers into adopting automated scanning technologies, such as reverse vending machines, by temporarily lowering the handling fee that is paid on each beverage container processed by those centers.
The bill easily passed the Senate on Wednesday and the House on Thursday on its way to Gov. Ned Lamont.
While the bill drew bipartisan support, Republicans described it as a temporary fix to a growing problem.
House Minority Leader Vincent Candelora, R-North Branford, called the switch to 10-cent deposits an “unmitigated disaster” and said he believed out-of-state redemption centers were offloading much of their inventory within Connecticut.
“The sheer quantity that is being redeemed in the state of Connecticut, this isn’t two people putting cans into a post office truck,” Candelora said. “This is far more organized than that.”
The impact of those excess returns is felt mostly by the state’s wholesale beverage distributors, who initiate the redemption process by collecting an additional 10 cents on every eligible bottle and can they sell to supermarkets, liquor stores and other retailers within Connecticut. The distributors are required to pay that money back — plus a handling fee — once the containers are returned to the store or a redemption center.
According to the state’s Department of Revenue Services, nearly 12% of wholesalers reported having to pay out more redemptions than they collected in deposits in 2025. Those losses totaled $11.3 million.
Peter Gallo, the vice president of Star Distributors in West Haven, said his company’s losses alone have totaled more than $2 million since the increase on deposits went into effect two years ago. As time goes on, he said, the deficit has only grown.
“We’re hoping we can get something fixed here, because it’s a tough pill to be holding on to debt that we should get paid for,” Gallo said.
Still, officials say they have no way of tracking precisely how many of the roughly 2 billion containers that were redeemed in the state last year were illegally brought in from other states. That’s because most products lack any kind of identifiable marking indicating where they were sold.
“There’s no way to tell right now. That’s one of the core issues here,” said state Rep. John-Michael Parker, D-Madison, who co-chairs the legislature’s Environment Committee.
Parker said the issue could be solved if product labels were printed with a specific barcode or other feature that would be unique to Connecticut. Such a solution, for now, has faced technological challenges and pushback from the beverage industry, he said.
Not everyone involved in the handling, sorting and redemption of bottles is happy about the upcoming changes — or the process by which they were approved.
Francis Bartolomeo, the owner of a Fran’s Cans and Bart’s Bottles in Watertown, said he was only made aware of the legislation on Monday from a fellow redemption center owner. Since then, he said, he’s been contacting his legislators to oppose the bill and was frustrated by the lack of a public hearing.
“I know other people are as flabbergasted as I am because they don’t know where it comes out of,” Bartolomeo said “It’s a one sided affair, really.”
Bartolomeo said one of his biggest concerns with the bill is the $2,500 annual licensing fee that it would place on redemption centers. While he agreed that out-of-state redemptions are a problem, he said it should be up to the state to improve enforcement.
“We’re cleaning up the mess, and we’re going to end up being penalized,” Bartolomeo said. “Get rid of it and go back to 5 cents if it’s that big of a hindrance, but don’t penalize the redemption centers for what you imposed.”
Lynn Little of New Milford Redemption Center supports the increased penalties but believes the solution ultimately lies with better labeling by the distributors. She is also frustrated by the volume caps after the state initially gave grants to residents looking to open their own bottle redemption businesses.
“They’re taking a volume business, because any business where you make 3 cents per unit (the average handling fee) is a volume business, and limiting the volume we can take in, you’re crushing small businesses,” Little said.
Ritter said that he opposed a move back to the 5-cent deposit, which he noted was increased to encourage recycling. However, he said the current situation has become politically untenable and puts the state at risk of a lawsuit from distributors.
“We’re getting to a point where we’re going to lose the bottle bill,” Ritter said. “If we got sued in court, I think we’d lose.”
NEW BRITAIN, CT — Stanley Black & Decker on Thursday said it has decided to close its manufacturing facility in New Britain.
Debora Raymond, vice president of external communications for the manufacturer, said the decision is a result of a “structural decline in demand for single-sided tape measures.”
The New Britain facility predominantly makes these products, according to Raymond.
“These products are quickly becoming obsolete in the markets we serve,” Raymond said, via an emailed statement Thursday.
The decision is expected to impact approximately 300 employees, according to Raymond.
“We are focused on supporting impacted employees through this transition, including providing options for employment at other facilities, severance, and job placement support services for both salaried and hourly employees,” Raymond said.
As of Thursday at 4:30 p.m., no Worker Adjustment and Retraining Notification (WARN) Act notice had been filed with the state Department of Labor.
The company’s corporate headquarters remains at 1000 Stanley Dr., New Britain.
Gov. Ned Lamont released the following statement on the decision:
“Although Stanley has made the decision to discontinue operations for manufacturing outdated products, a change in workforce opportunities is difficult for employees, their families, and any community.,” Lamont said. “However, I am hopeful that these skilled workers will be repurposed with the help of Stanley Black & Decker, a company that will still proudly be headquartered here in Connecticut. My administration is working closely with local and state leaders to support affected workers and to reimagine the factory site so it can continue to create opportunity and strengthen New Britain’s economic future.”
New Britain Mayor Bobby Sanchez said he is “deeply disappointed” the company will be closing its Myrtle Street operations.
“For generations, Stanley Works has been part of the fabric of our city, providing good-paying jobs, supporting families, and helping build New Britain’s proud reputation as the ‘Hardware City,’” Sanchez said.
According to the mayor, his office’s immediate focus is on helping affected workers and their families. The mayor has been in contact with Lamont’s office, and they will be working closely to make sure employees have access to job placement services, retraining opportunities and support, Sanchez said.
“We will continue aggressively pursuing economic development opportunities and attracting businesses that are looking for a true community partner, a city ready to collaborate, innovate and grow alongside them,” Sanchez said. “New Britain has reinvented itself before, and we will do so again.”
Stanley Black & Decker, founded in 1843, operates manufacturing facilities worldwide, according to its website. It reports having 43,500 employees globally, and makes an array of products, such as power tools and equipment, hand tools, and fasteners.
Newly released police video shows former WWE executive Vince McMahon ram his luxury sports car into the rear end of another vehicle on a Connecticut highway last summer as he was being followed by a state trooper.
McMahon, now 80, was driving his 2024 Bentley Continental GT at more than 100 mph on the Merritt Parkway when he crashed in the town of Westport, according to state police.
A trooper’s dashcam video shows McMahon accelerating away, then braking too late to avoid crashing into the back of a BMW. The Bentley then swerves into a guardrail and careens back across the highway, creating a cloud of dirt and car parts.
“Why were you driving all over 100 mph?” state police Detective Maxwell Robins asked McMahon after catching up to the wrecked Bentley, which can cost over $300,000.
“I got my granddaughter’s birthday” McMahon replied, explaining he was on his way to see her. The encounter was recorded on police bodycam video.
No one was seriously injured in the July 24 crash, which happened the same day that WWE legend Hulk Hogan died of a heart attack in Florida.
Besides damage to the rear of the BMW, another vehicle driving on the opposite side of the parkway was struck by flying debris. The driver of that third car happened to be wearing a WWE shirt, according to the police video.
McMahon was cited for reckless driving and following too closely. A state judge in October allowed McMahon to enter a pretrial probation program that will result in the charges being erased from his record next October if he successfully completes the program. He was also ordered to make a $1,000 charitable contribution.
McMahon’s lawyer, Mark Sherman, said the crash was just an accident.
“Not every car accident is a crime,” Sherman said. “Vince’s primary concern during this case was for the other drivers and is appreciative that the court saw this more of an accident than a crime that needed to be prosecuted.”
State police said Robins was trying to catch up to McMahon on the parkway and clock his speed before pulling him over. They said the incident was not a pursuit, which happens when police chase someone trying to flee officers. They also said it did not appear McMahon was trying to escape — though in the video the detective suggests otherwise.
“I’m trying to catch up to you and you keep taking off,” Robins says.
“No, no no. I’m not trying to outrun you,” McMahon says.
An accident information summary provided to the media shortly after the crash did not mention that a trooper was following McMahon.
The Associated Press obtained the videos Wednesday through a public records request. They were first obtained by The Sun newspaper.
The trooper’s bodycam video also shows him asking McMahon whether he was looking at his phone when the crash happened. McMahon said he was not and adds that he hadn’t driven his car in a long time.
After Robins tells McMahon that his car is fast, McMahon replies, “Yeah, too (expletive) fast.”
The videos also show McMahon talking to the driver he rear-ended. Barbara Doran, of New York City, told the AP last summer that McMahon expressed his concern for her and was glad she was OK. She said she was heading to a ferry to Martha’s Vineyard at the time of the crash.
After McMahon was given the traffic summons, he shook hands with Robins and another trooper and they wished him well.
McMahon stepped down as WWE’s CEO in 2022 amid a company investigation into sexual misconduct allegations. He also resigned as executive chairman of the board of directors of TKO Group Holdings, the parent company of WWE, in 2024, a day after a former WWE employee filed a sexual abuse lawsuit against him. McMahon has denied the allegations. The lawsuit remains pending.
McMahon bought what was then the World Wrestling Federation in 1982 and transformed it from a regional wrestling company into a worldwide phenomenon. Besides running the company with his wife, Linda, who is now the U.S. education secretary, he also performed at WWE events as himself.
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