By Natalie Missakian
The older couple who lived next door when Tim Ryan and his wife, Mary, moved into their Trumbull home 25 years ago turned out to be the best neighbors they ever had.
“They were around the neighborhood more, always out working in their yard,” Ryan, 66, recalled. “They looked out for local deliveries. We felt they made the neighborhood safer.”
Today the Ryans are the older neighbors on the block. They decided to stay in Connecticut after Tim retired from a career with consumer-goods maker Unilever.
But he knows that many older people on fixed incomes have had to move to lower-tax states to reduce their cost of living.
Three years ago, 10,618 residents 65 and older moved out of Connecticut, though that total dropped to 7,005 in 2017.
When Gov. Ned Lamont (D) wanted to rescind promised income-tax cuts to help close a budget gap, Ryan and other AARP volunteers mobilized.
“We’re in a state whose population is decreasing, and retired people create a lot of value,” he told state lawmakers last spring. “Let’s encourage them to stay.”
The tax cuts, which legislators approved with overwhelming bipartisan support in 2017, were ultimately restored in the two-year $43.4 billion budget passed and then signed by Lamont in June.
That’s good news for many lower- and middle-income retirees, who will see reduced state-income-tax bills when they fill out their 2019 returns.
Cuts begin this year
The new budget clears the way for a planned six-year phaseout, beginning this year, of the state income tax on pension and annuity earnings for residents making $75,000 or less ($100,000 for joint filers).
It also expands the deduction on Social Security income to more taxpayers by raising the income threshold to qualify from $50,000 to $75,000 (and from $60,000 to $100,000 for joint filers).
“There were difficult decisions to be made in the state budget, but we are encouraged to see legislative leaders and Gov. Lamont recognize the best way to serve Connecticut’s aging population is through supporting their ability to make our state home,” said Nora Duncan, AARP Connecticut state director.
House Speaker Joe Aresimowicz (D-Berlin) said the Lamont administration combed through the budget looking for ways to offset a projected $3.7 billion two-year shortfall without raising the income tax.
Lamont said the new budget will avert the shortfall. GOP legislators dispute that.
Aresimowicz said lawmakers were adamant that the tax cuts for older residents needed to stay.
“It was a central part of the reelection bid when we were out there talking to voters,” he said. “For us to take that away in the very next legislative session would be really disingenuous.”
Rep. Vincent Candelora, of North Branford, the deputy Republican leader, said keeping retirees in the state is good public policy.
“Our seniors have a lot to offer,” he said. “They put in a lot of volunteer hours in their communities and spend a lot of their retirement years giving back.”
AARP Connecticut is looking for more legislative volunteers to get involved. If interested, contact Elaine Werner at email@example.com or call 860-548-3169.
Natalie Missakian is a writer living in Cheshire, CT.
Tax Win Helps Keep Retirees in State
By George Bridges , September 01, 2019 12:00 AM
By Natalie Missakian