How will the federal spending bill affect CT? See town-by-town estimates

[Excerpt from news article published on the top of the Sunday front page across all Hearst CT newspapers, by Alex Putterman, December 28, 2025]

Connecticut residents will see significant effects of the spending bill passed earlier this year by President Donald Trump and congressional Republicans. What those effects look like, however, will depend heavily on who you are.

According to a new report from the nonprofit DataHaven, the top 25% of Connecticut households by income will benefit by about $3.4 billion annually — nearly $10,000 each  — from the federal legislation, while the bottom 25% of households will lose $148 million — $417 each on average — due to changes to the Supplemental Nutrition Assistance Program and Medicaid.

Households in the middle 50% will benefit modestly, by about $1.3 billion total or $1,800 per household.

“The findings in this report indicate that H.R. 1 will considerably exacerbate the problem of rising income inequality in Connecticut, which has been increasing in the state since 1970,” the report says.

The federal spending bill, passed in July, includes significant tax relief for many Americans, with the largest savings going to those in the top tax brackets. An increased cap on the state and local tax deduction, known as SALT, will particularly benefit thousands of households in Connecticut.

However, the legislation will also lead to millions of low-income Americans losing access to Medicaid and SNAP.

Trump and fellow Republicans have generally celebrated the tax savings in the bill, while Democrats have focused on the cuts to programs many low-income Americans rely on.

DataHaven’s report analyzes the impact by town, finding that wealthy Fairfield County towns, on balance, benefit by tens or even hundreds of millions of dollars, whereas the state’s poorest cities and towns benefit much more modestly.

Further, report shows discrepancies within each town, with the lower 25% of residents even in some wealthy towns suffering net losses under the legislation, as the upper 25% of residents in every community benefit.

“Regardless of what town you’re in, the residents earning more in the town will be, on average, receiving some tax cut,” Mark Abraham, DataHaven’s executive director, said in an interview. “Whereas even in the wealthier towns, households with moderate or low incomes won’t be seeing much of a benefit from the legislation.”

According to the report, which uses data from the Congressional Budget Office and the U.S. Census Bureau, Greenwich ($262 million), Stamford ($239 million), Fairfield ($158 million), Norwalk ($143 million), Westport ($121 million), and West Hartford ($121 million) will benefit the most from the federal spending bill.

By contrast, the state’s largest city, Bridgeport, will see $61 million in benefits, while Hartford will see only $36 million in benefits. In both cities, the bottom 25% of residents are estimated to lose more than $14 million due to the legislation, as some of that cohort are removed from SNAP and/or Medicaid.

Abraham emphasized that the report focuses specifically on the spending bill and does not factor in other Trump tax policies, such as his imposition of widespread tariffs.

In some cases, Connecticut officials could mitigate the bill’s impact with state money, including through a new $500 million pot established to replace lost federal funding.

DataHaven’s findings, Abraham said, could bolster arguments from some progressive lawmakers that Connecticut should tax its wealthiest residents at a higher rate to fund education and social safety net programs.

“This report shows that the tax bill will have very positive impacts in some parts of the state on some households,” Abraham said. “So that’s important when thinking about a proposal like raising the state capital gains tax from 7% to 8%, for example. …It sounds like a lot, but if you put it into context of these tax cuts, it’s a small percent of what households are likely getting back through the federal legislation.”