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Gas Tax Scheduled To Increase This July

by | Apr 25, 2013 7:18am () Comments | Commenting has expired | Share
Posted to: State Budget, Taxes

Although lawmakers from both parties voted last year to pin down one side of the state’s two-tiered gas tax, some are now seeking to avoid a slated increase on other side scheduled for this July.

Connecticut’s petroleum gross receipts tax on gasoline is based on a percentage of the current wholesale price of gas. Because the wholesale price fluctuates, the gas tax rate can be a moving target.

Last year, the legislature bowed to political pressure from Republicans and passed a bill which stipulated that capped the taxable portion of the wholesale gas price at $3 per gallon. But in July, the tax rate applied to the price of gas is slated to rise from 7.53 percent to 8.81 percent. The increase could generate about $60 million for the state.

In a Wednesday press release, House Minority Leader Lawrence Cafero said lawmakers should prevent the tax from rising. He said the state can find the funds somewhere else.

“We have the available resources in a number of areas of the state budget to prevent this gas tax hike. What we need now is the will to give taxpayers and drivers a break. The taxes on gasoline and diesel are too high as it is,’’ Cafero said.

The renewed scrutiny of the gas tax comes as lawmakers consider a budget proposal which diverts $80.7 million from the Special Transportation Fund — which the gas tax is meant to finance — to the General Fund in the next budget biennium.

On Friday as the Finance Committee was approving the budget legislation, Rep. Pamela Sawyer, R-Bolton, proposed an unsuccessful amendment to repeal the scheduled gas tax increase.

“It’s a frustrating way to manage the books,” Sawyer said Wednesday.

The state’s transportation fund was designed as a way to ensure money was available for the upkeep of transportation infrastructure, she said. But it’s become an easy raiding target when the General Fund runs low, Sawyer said. The state’s complicated gas tax, which increases when gas prices go up, can balloon the fund when gas prices get high.

“Whenever the wholesale price goes up the state gets a windfall,” she said.

Responding to Republican criticisms of the budget proposals moved by legislative committees last week, House Speaker Brendan Sharkey accused the minority party of intentionally marginalizing itself in a tough budget year when unpopular decisions would need to be made.

“All the things everybody loves to spend money on, [Republican leaders] were in favor of, all the things people are concerned about, they were against but they were not saying anything or presenting anything in the larger context,” he said.

Sharkey said he was “not completely comfortable” with raiding the transportation fund and would like to see it changed through negotiations with the governor’s office. Still, he did not think it should be considered a new tax because it has been scheduled since 2005.

“That’s something that was set in motion years ago for these automatic increases. I think there’s a lot of things we can look at and I think the gross receipts tax is one example, how we set these things in motion, but to say that we’re not eliminating the tax and therefore it’s a tax increase, I think that’s a little disingenuous,” he said.

In an attempt at being constructive, Cafero made suggestions on where the state could make up revenue that would be lost by scrapping the gas tax increase. They included scrapping the Earned Income Tax Credit, raiding the Rainy Day Fund, cutting $10 million from the Citizen’s Election Fund, and enacting a hard hiring freeze.

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(11) Archived Comments

posted by: ALD | April 25, 2013  9:25am

House Speaker Brendan Sharkey said:

” I think the gross receipts tax is one example, how we set these things in motion, but to say that we’re not eliminating the tax and therefore it’s a tax increase, I think that’s a little disingenuous,” he said.

Perhaps the speaker is confused???  If today I am paying 7.53% in the way of the GRT and in July it increases to 8.81%, any way he wants to try to cut it, that’s a tax increase.  To claim that just because it was scheduled to go up does not make it a tax increase is, to use his own word,  disingenuous.

However I guess he may have been trying to tip toe around the truth when he said:  “eliminating the tax”.  That is not, what is being discussed here…..... What is being discussed, is the possibility of eliminating the scheduled tax INCREASE, part of the GRT tax.

Conversely, to claim that reneging on an agreement to remove a tax that was scheduled to be removed, as the Governor did with the power companies, but continue it instead, is not a new tax increase, is, disingenuous.

Is it possible Speaker Sharkey was confusing the two circumstances when he chose the word disingenuous?

posted by: Not that Michael Brown | April 25, 2013  11:22am

Tax gasoline.  Give a State income tax credit for commercial vehicles.  Encourage the use of public transportation.

posted by: ASTANVET | April 25, 2013  12:28pm

“The increase could generate about $60 million for the state.”  Where do they think this money comes from… US! So in the article they illustrate that the transportation fund for infrastructure is always being diverted to the general fund (aka why our roads and bridges suck).  The answer from Hartford is always tax.  Tax when times are good, tax when times are bad, just make sure you tax.  I’m sure the good citizens of CT could use that 60 million of their own money in their pockets, and not for a study, not for a commission, not for a pension - capital they earned from their labor in their pockets.  Thats a novel concept.

posted by: Noteworthy | April 25, 2013  12:31pm

The double taxation on gas is nothing but highway robbery. It not only should not go up, it should be scrapped completely. This is supposed to pay for gas station tank removal. The state reneged on that deal and now just uses it as a piggy bank. There are hard decisions in the budget? Quit re-defining the spending cap, stay within the law; cut real spending, not just the growth in spending; hiring freeze; dump the EITC welfare and quit paying extra for “deputy” majority/minority leaders; real hiring freeze; cap the state police overtime for Malloy. There are so many places to cut - my god, you people have ramped up spending from less than $8 billion 20 years ago to more than $20 billion today. Quit making excuses and blaming each other.

posted by: CitizenCT | April 25, 2013  1:20pm

Gas in Mass. is already almost 20 cents cheaper per gallon.  If the tax goes up, more gallons will be bought across the border.

posted by: wmwallace | April 25, 2013  2:12pm

Former State Senator Suzio fought this issue last year and he got the tax stopped for the summer. But again we are fighting the state from digging into our pockets once again because of mismanagement of our tax dollars. If anything they should suspend the gross receipt tax for the summer to help businesses though out the state. Tourism is big for a number of businesses and cutting the gross receipt taxes would help them and the state. More people spending money in Connecticut means more tax revenue.

posted by: dano860 | April 25, 2013  7:42pm

It would be one thing if the TAX went into the fund to maintain the infrastructure but it just pours through the “crony fund” also referred to as the General Fund.
Another regressive tax dumped on the unemployed and brown collar working community.
I talk to people from New Jersey, New Hampshire and Massachusetts that don’t stop in Ct. for anything. They can get through the 107 miles of Route 84 without even needing a bathroom break. A true ‘pass through state’.

posted by: SocialButterfly | April 25, 2013  7:54pm

As our taxes keep increasing—Connecticut’s economy GO’S UP IN SMOKE. No way to run a business—but Gov. Malloy is no businessman.

posted by: surely | April 25, 2013  8:21pm

The people voting on this probably have a state issued car and free gas!  How is anyone supposed to get ahead of the game?!!!  A bus way from New Britain to Hartford is NOT going to get people to use the transit system.  All the major cities around us have a subway system.  Why not us?  I guess it’s too late because all the railroad tracks have been paved.

posted by: dano860 | April 25, 2013  11:35pm

Gas in Southbridge, Ma is $3.55 / gallon. If you have a debit card to one dealer it is another .10 cents cheaper. Compare that to the $3.80 in Putnam, Ct. That’s a .35 cent difference. If you are going there to grocery shop (less sales tax) and do other things, you fill up. This will save you $5.25 on a 15 gallon fill up. It may not make you rich but it feels good just knowing it didn’t go into the sink hole named Hartford.

posted by: SocialButterfly | April 26, 2013  11:04am

We are all paying the price for electing Gov. Malloy and his Democratic General Assembly—“who are ALL politically correct—due to incorrect voters who put these chronic big spenders into office.”  We did ourselves in and are now ALL paying the price for our bad judgement at the polls.  Malloy patterns himself after our biggest national problem—Pres. Barack H. Obama.  It’s no wonder our state is in big trouble.

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