(Bloomberg) -- Connecticut Governor Ned Lamont unveiled a $50.5 billion biennial budget that would cut income taxes on families making up to $100,000 per year, as well as have the state borrow $600 million for new housing.

The budget increases spending by 3.5% in the fiscal year beginning July 1 and 1.8% the following year. 

Lamont proposed cutting taxes for families to 2% on their first $20,000 in income and to 4.5% on income of as much $100,000, down from 3% and 5% respectively. The tax cuts, the first in almost 30 years, would save 1.1 million taxpayers $440 million annually, the governor projected. Depending on adjusted gross income, some joint filers could save almost $600 annually, with some single filers getting a $300 tax cut. 

“I want a sustainable tax cut that we can support in good times and not-so-good times,” Lamont said in a budget address. “We’ve had a number of false starts, on again, off again tax cuts — not this time.” 

Lamont’s proposal also includes $100 million in each year of the biennium to create 2,000 units of “workforce housing” for those earning between 60% and 120% of area median income. Another $100 million annually is targeted for down payment assistance to first-time home buyers. 

Connecticut has benefited from strong personal income tax collections. Surging stocks and Wall Street profits have boosted capital-gains-tax revenue, while sales-tax collections are also rising.  Connecticut projects it will start fiscal 2024 with $6 billion in reserve or about 27% of spending.

In 2017, lawmakers passed a bill requiring the state, which is heavily reliant on Wall Street for income-tax revenue, to stock its rainy-day fund with any capital-gains and bonus taxes that exceed a certain threshold. The law caps the budget reserve at 15% of spending, with any excess transferred to pensions.

The state has made almost $6 billion in additional payments to its underfunded pensions and all four credit rating companies have upgraded the state’s rating. 

“Every dollar we eliminate from fixed costs are dollars we can use to provide tax relief and additional services to the residents of our state,” Lamont said. 

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