The Waterbury Times|CT Urban Affairs|Published Apr 6, 2026
Hartford– A Republican candidate, Betsy McCaughey, has proposed repealing Connecticut’s income tax if elected Governor. But to understand what that means, you have to go back to a time when the state didn’t have one.
Before 1991: No Income Tax—So How Was CT Funded?
Prior to 1991, Connecticut was one of the few states without a broad-based income tax. Instead, the state relied on:
Sales Tax:
- The largest source of revenue
- Sensitive to economic downturns (when people spend less, revenue drops)
• Corporate & Business Taxes
- Significant, but inconsistent depending on the economy
• Excise Taxes
- Gas, cigarettes, alcohol
- Steady, but limited in growth
Property Taxes: The Local Backbone
Even before the income tax, property taxes were doing heavy lifting—but mostly at the local level:
- Funded schools, police, fire, and local services
- Created major disparities between wealthy and struggling cities
- Still among the highest in the country today
Important distinction:
Property taxes didn’t fund the state—they funded your town.
The Crisis That Changed Everything
By the late 1980s, Connecticut hit a wall:
- Economic slowdown
- Falling sales tax revenue
- Massive state budget deficit
This led to the creation of the income tax in 1991 under Governor Lowell P. Weicker Jr..
What the Income Tax Does Today
Fast forward to now:
- The income tax is one of the largest sources of state revenue
- It helps fund:
- Education aid to cities (like Waterbury)
- Healthcare programs
- State services and infrastructure
What Repeal Would Actually Mean
Repealing the income tax isn’t just “cutting a tax”—it creates a major gap in the budget.
To replace it, the state would likely have to:
Option 1: Raise Other Taxes
- Higher sales tax
- Expanded taxes on services
- Increased business taxes
Option 2: Shift Burden Locally
- Less state aid → more pressure on property taxes
Option 3: Cut Spending
- Reductions in education, healthcare, or municipal aid
The Reality Check
Connecticut didn’t adopt an income tax to add a burden—it did it because:
The old system (sales + business taxes) wasn’t stable enough
Property taxes were already maxed out in many cities
The state needed a more consistent revenue stream
The Local Angle (Waterbury Lens)
For cities like Waterbury:
- State aid (funded partly by income tax) is critical
- Any repeal conversation immediately raises questions about:
- School funding
- Local budgets
- Potential property tax increases
The Bottom Line
The debate isn’t just “should we repeal the income tax?”
It’s:
What replaces it?
Who ends up paying more instead?
Coming Soon: Deeper Breakdown
- Where your tax dollars actually go in Connecticut
- What happens to Waterbury if the income tax is repealed
- Would property taxes go up? A local impact analysis
Each of those becomes its own full article later
More Capital News:
Why Connecticut Is Still Taxing Tips—Despite National Calls to End the Practice
Sen. Rob Sampson (R-16th): Crowded Hearings Show Connecticut Residents Pushback on Proposed Bills
CT H.B. 5468 Protecting Homeschooling Rights in Connecticut or Government Overreach?
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