Governor Ned Lamont backed down from a planned tax increase on farm equipment Monday, suspending the levy after facing sustained pressure from Connecticut agricultural groups and rural lawmakers.

The reversal affects a provision in the state budget that would have eliminated sales tax exemptions for farm machinery purchases over $50,000, a change that agriculture advocates said would disproportionately burden family farms already struggling with rising costs.

“After further review and consultation with our farming community, we’ve decided to pause implementation of this provision,” Lamont said during a press conference at the State Capitol. “Connecticut’s agricultural sector is vital to our economy and our food security.”

The tax change, originally projected to generate $3.2 million annually for state coffers, drew opposition from farm organizations across Connecticut, including influential growers in Fairfield County where agricultural land values have soared amid development pressure.

Connecticut Farm Bureau Executive Director Bonnie Burr called the governor’s decision “a recognition that farming remains essential to Connecticut’s character and economy.” The organization had mobilized members to contact legislators after the tax provision surfaced in budget negotiations last fall.

The equipment tax represented one of several revenue measures Lamont proposed to help close a projected $1.8 billion budget shortfall over the next two fiscal years. Other recent policy initiatives have targeted out-of-state property owners and corporate tax loopholes.

Republican lawmakers, who had criticized the farm tax as emblematic of Democratic overreach, claimed victory following Lamont’s announcement. Senate Minority Leader Stephen Harding said the reversal showed “common sense can still prevail when working families and small businesses speak up.”

But the governor’s retreat complicates his broader political agenda as he seeks to balance progressive priorities with fiscal constraints heading into a potential reelection campaign. Lamont has faced criticism from both flanks—conservatives opposing tax increases and progressives demanding more aggressive revenue generation.

The farm equipment exemption dates to 1967, when the General Assembly sought to encourage agricultural investment as suburban development consumed farmland across the state. Connecticut has lost roughly 60% of its active farmland since 1950, according to state agriculture department data.

Fairfield County, where horse farms and organic produce operations command premium prices, accounts for nearly 30% of the state’s agricultural revenue despite representing just 12% of total farm acreage. Industry representatives argued the equipment tax would have accelerated consolidation by making capital improvements prohibitively expensive for smaller operations.

“A $75,000 tractor suddenly becomes an $80,000 investment,” said Tom Morrison, who operates a 200-acre dairy farm in Redding. “That might not sound like much to folks in Hartford, but for family farms operating on thin margins, it’s the difference between staying in business and selling to developers.”

The Connecticut Conference of Municipalities had supported the tax elimination, arguing that farm exemptions shift the burden to residential property taxpayers in rural communities. Mayor Patricia Llodra of Easton, where agricultural land comprises 40% of total acreage, said the exemption “creates inequities in how we fund local services.”

Lamont administration officials said they would identify alternative revenue sources to replace the projected $3.2 million, though they declined to specify options under consideration. The governor has ruled out broad-based tax increases on middle-class families while expressing openness to targeted measures affecting high earners and large corporations.

The reversal comes as Lamont faces questions about his administration’s oversight of state agencies following recent audit findings that prompted calls for a Hartford senator to step back from leadership roles.

Connecticut’s agricultural sector employs roughly 25,000 people directly and generates $4.2 billion in annual economic activity, according to University of Connecticut economic impact studies. The industry has diversified beyond traditional dairy and tobacco farming to include specialty crops, agritourism, and organic production serving urban markets in New York and Boston.

State Agriculture Commissioner Bryan Hurlburt said his department would work with the governor’s office to develop alternative policies supporting farm viability without creating unfunded mandates for municipalities.

“We need creative solutions that recognize both the fiscal realities facing state and local government and the unique challenges confronting Connecticut agriculture,” Hurlburt said.

The General Assembly will reconvene February 5 for the regular legislative session, where budget adjustments and agricultural policy are expected to draw renewed attention from rural and suburban lawmakers.