As Connecticut lawmakers prepare for the 2025 legislative session starting Jan. 8, progressive groups are demanding billions in new spending and pushing to weaken the state’s fiscal guardrails. However, a newly formed working group, tasked with examining more than $10 billion in state tax credits, offers an alternative path. By identifying and potentially eliminating ineffective tax incentives, the group could free up significant revenue, addressing spending demands without jeopardizing the fiscal controls that keep the state’s budget in check. 

Rep. Maria Horn (D-Salisbury), co-chair of the Finance, Revenue, and Bonding Committee, kicked off the first meeting of the Tax Expenditure Working Group on Monday, Dec. 9, outlining the group’s objectives. 

The term “tax expenditure” might sound contradictory, but it refers to taxes the government does not collect due to exemptions, deductions, or credits. These tax breaks are designed to achieve policy goals, such as spurring economic growth through corporate tax credits or serving the public good with sales tax exemptions, without requiring direct government spending. 

The Office of Fiscal Analysis (OFA) publishes a report every two years, providing insights into Connecticut’s tax expenditures. The report includes a description of each expenditure, the year it was enacted and its original purpose. It also provides the estimated fiscal impact on state and municipal budgets, projects the revenue that would result from repealing the expenditure, and estimates the number of taxpayers benefiting from it. The most recent report was released in February 2024. 

“These tax expenditures are passed and then buried, unseen for years,” said Rep. Horn, as she highlighted the importance of revisiting how Connecticut hands out tax breaks.  

Horn argues that these credits are “a large expenditure of tax revenue” which affects other spending priorities. She expressed confidence in the expertise of the group, emphasizing the need for both immediate adjustments and a long-term reevaluation of these policies. 

She went on to explain her motivations for revisiting Connecticut’s tax expenditures, pointing to the complexity of the state’s tax code and the need for greater accountability. 

“Part of it came out of when I first became Finance Chair, and I was looking at the most recent Tax Expenditure Report and trying to get my arms around a very complex tax code. Connecticut is not unique in that regard,” Rep. Horn said.  

She revealed that her initial approach focused on identifying “easy wins,” but quickly realized the task was more challenging.  

Rep. Horn is calling attention to two specific categories of tax expenditures as priorities for review. The first involves incentives aimed at influencing behavior or investments. To determine whether these credits should remain in place or be eliminated, she posed critical questions: “Are we clear about what it is that we were incentivizing in the first place? And did it work? Because, clearly, it’s meant to produce something. Did it happen? Should we do it a different way? Should we not be doing it at all? Is it not a responsible use of state resources?”  

The second includes unused or inaccessible tax credits. “I’m hoping this will be easier as no one is using [it] either because business didn’t go in that particular direction, or because it was written in such a way that it’s just not accessible for people,” Rep. Horn said.  

She called the situation “messy” and noted that unused credits still appear in research reports, unnecessarily cluttering the system. “We should probably clean that up,” she said adding that addressing these issues is crucial to ensuring Connecticut’s tax expenditures are effective and responsible. 

Outgoing ranking member on the Finance Committee, Rep. Holly Cheeseman (R-East Lyme) echoed Horn’s sentiment, adding that the review comes at a critical time as Connecticut faces mounting budget pressures. 

Rep. Cheeseman underscored the need to review Connecticut’s tax expenditures to assess their effectiveness, emphasizing the importance of efforts to “get a better read of the existing tax expenditures and the different tax credits.” She added, “Are they effective? Are they achieving the goals intended? If they’re not, is it because they’re simply not needed, or because they are too onerous for people to apply or understand?”

Emphasizing that these tax credits play a significant role in the state’s fiscal health, she added. “I think getting a handle on these tax expenditures, which in effect can limit our spending, is really critical to having a healthy fiscal environment in the state.”

She also suggested introducing sunset dates for tax credits to address the issue of credits being passed without an expiration and rarely revisited. “Provide some accountability,” Cheeseman said, adding that such measures would prevent these tax breaks Drawing from his experience as a tax attorney with the Department of Revenue Services (DRS), he noted that many tax credits go unclaimed despite requiring significant administrative efforts and costs for state agencies.from remaining unchecked for years, only to reappear in obscure reports. 

Matt Dayton, Under Secretary for Legal Affairs at the Office of Policy and Management spoke about the importance of evaluating tax credits. 

“I think the most important thing we can do with these tax expenditures is to agree [to] identify whether they are working and whether anyone’s actually claiming them,” Dayton said.  

Drawing from his experience as a tax attorney with the Department of Revenue Services (DRS), he noted that many tax credits go unclaimed despite requiring significant administrative efforts and costs for state agencies.

The group didn’t go into specifics during its first meeting, focusing instead on setting goals and expectations. However, Connecticut’s controversial film tax credits quickly came under the spotlight. According to the 2024 Tax Expenditure Report, these credits amount to $103 million. 

The film tax credit has long faced criticism for failing to deliver financial benefits to the state. A 2019 report from the Department of Economic and Community Development (DECD) revealed that Connecticut has lost more than half a billion dollars since the program’s inception. 

Former DECD Commissioner David Lehman even recommended scaling back or outright repealing the credit, adding fuel to the ongoing debate over its effectiveness. 

The group could take a closer look at several questionable tax credits among the hundreds of exemptions and credits currently on the books. For instance, the exemption for dues paid to lawn bowling clubs cost less than $100,000 and benefited fewer than 245 people in fiscal year 2024. In the fiscal years 2020 and 2021, these credits amounted to $400,000, while still only directly helping fewer than 310 people. 

Another example is the exemption for admission charges at Dunkin’ Donuts Park in Hartford, which cost $150,000 in fiscal year 2020 and doubled to $300,000 in 2021 — all to benefit a single taxpayer. 

Then there’s the cigar tax cap, which is set at just 50 cents per cigar. This cap is estimated to cost the state $11.6 million in fiscal years 2024 and 2025, benefiting fewer than 300 people. 

The group has a tough job ahead as it works through the complexities of Connecticut’s tax expenditures. Repealing credits or exemptions might not bring in as much revenue as expected, since businesses and individuals often adjust their behavior to avoid higher taxes. This means any financial boost from eliminating certain expenditures could fall short of projections. On top of that, repealing some tax incentives could function as a hidden tax hike, with the costs passed on to consumers. 

At the same time, this effort presents an opportunity to address spending priorities without undermining the state’s fiscal guardrails. These guardrails have played a key role in getting Connecticut’s finances in order and weakening them to allow for new spending would be a step backward. It would reopen the door to the kind of overspending that caused deficits in the past. Instead, the focus should remain on simplifying the tax code and ensuring resources are used effectively. 

Every tax exemption and credit should serve a clear purpose, deliver measurable results, and justify its existence — especially in a state grappling with the challenge of balancing fiscal discipline against ever-growing demands for more spending. 

Two people have serious injuries after a crash in Stamford on Thursday night.

Police said the crash happened on High Ridge Road near Cedarwood Drive around 10:34 p.m.

A 55-year-old Stamford resident was heading south in a 2008 Chevy Suburban, drifted across the centerline into the northbound lane and hit a 2019 Cadillac SUV driven by an 88 year-old New York resident, police said.

Both vehicles were heavily damaged and the Stamford Fire Department extricated the drivers from both vehicles.

Both drivers were taken to Stamford Hospital, where medical staff determined that their injuries were serious, but not life-threatening, policed said.

High Ridge Road was closed for several hours and has reopened.

Anyone who saw the crash or who has information is asked to call the Collision Analysis and Reconstruction Squad at (203) 977-4712.

Several drones were reportedly spotted in the skies above a Connecticut suburb Thursday night, adding to recent sightings that have perplexed residents and raised questions about possible national security and public safety concerns. 

A social media user on X posted videos of possible drones in Fairfield, 55 miles northeast of New York City. 

Drones hovering over New Jersey and near Staten Island, New York, in recent weeks have raised concerns due to a lack of clarity over their origin. 

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One X user filmed what she said were at least five drones in the sky over the Fairfield, Connecticut, train station. 

“They all just went by each other,” she’s heard saying off camera. “They’re at different levels. My husband has a drone. They don’t fly this far and this quiet.”

At one point, she said the aircraft could be a “hobbyist drone.”

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Another social media user said she noticed the drones “between 5:30-6:00. Crazy, definitely not planes.” Other footage posted online showed multiple possible drones hovering near LaGuardia Airport in New York City, according to social media posts. 

Fox News Digital has reached out to the Federal Aviation Administration. 

More than three weeks after dozens of mysterious drones began popping up in the New Jersey night sky, the Pentagon has not disclosed answers about where they came from. However, the Pentagon earlier this week denied the drones were launched from an Iranian “mothership” off the U.S. East Coast.

A social media user said she filmed several drones hoovering over Fairfield, Conn., Thursday night.  (Lucy Biggers)

“There is no Iranian ship off the coast of the United States, and there’s no so-called ‘mothership’ launching drones toward the United States,” Pentagon spokeswoman Sabrina Singh told Fox News chief national security correspondent Jennifer Griffin. 

On Thursday, White House national security communications adviser John Kirby said many of the purported drone sightings spotted over New Jersey for the past several weeks are actually lawfully operated manned aircraft. 

“We have no evidence at this time that the reported drone sightings pose a national security or a public safety threat or have a foreign nexus,” Kirby told reporters at the daily White House press briefing.

The FBI and Department of Homeland Security said they would continue to “investigate this situation and confirm whether the reported drone flights are actually drones or are instead manned aircraft or otherwise inaccurate sightings.”

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“Historically, we have experienced cases of mistaken identity, where reported drones are, in fact, manned aircraft or facilities. We are supporting local law enforcement in New Jersey with numerous detection methods but have not corroborated any of the reported visual sightings with electronic detection,” the statement said. 

“To the contrary, upon review of available imagery, it appears that many of the reported sightings are actually manned aircraft, operating lawfully. There are no reported or confirmed drone sightings in any restricted airspace”.