State offers commute tax credits and free bus passes

Eligible employers may claim a tax credit for approved commuter benefits. An eligible employer must operate a licensed business in Connecticut, owe one of the listed state taxes, and average at least five state employees. Participating employees must work at least 20 hours per week in the state. The employer must get approval from the transportation commissioner and document its actual spending each year. The total amount of credits reserved cannot exceed $7.5 million. Unused credit may carry forward for up to three years. The credit applies to income years beginning on or after January 1, 2027. Its rate falls from 25% in the first year to 5% in the fifth year.

The education department administers grants for school boards to buy and distribute free bus passes; the veterans department buys and distributes passes to veterans. Student passes are for public school students in grades 9 through 12. Veterans in Connecticut may apply for passes. Both programs cover state-owned or state-controlled bus services. School boards must apply for grants, and the education department may set grant criteria. Veterans must apply under procedures set by the veterans department, which may set distribution rules. Both pass programs take effect July 1, 2026.

The transportation commissioner establishes a three-year microtransit pilot and reports on it. The pilot tests services in Connecticut, including rural areas without current public transportation. Microtransit uses shared vehicles and an app or digital network to offer fixed or flexible routes based on rider demand. The commissioner may make agreements with outside providers. The pilot provision takes effect July 1, 2026. The commissioner must report on the pilot by January 1, 2028.

The state sets aside $4 million for Shore Line East and requires $3 million to be spent to increase service. The funding is for the Shore Line East rail line. The money comes from an amount already appropriated to the Department of Transportation for rail operations. The money is for the fiscal year ending June 30, 2027.

The transportation department must give public notice and hold a hearing before increasing land transit fares. The fare steps apply to increases for mass transportation by land. The separate notice requirement applies to a hearing on a major commuter rail service change when that hearing is required under the cited federal rule. The department must advertise the proposed increase in newspapers circulating in affected areas and notify specified lawmakers and the Connecticut Public Transportation Council. For a major commuter rail service change, notice to those lawmakers and the council is required when a public hearing is required under the cited federal rule. Fare notices and notice to lawmakers and the council must be sent at least 15 days before the public hearing.