Opinion by State Representative T.R. Rowe
Last year Governor Malloy’s Commissioner of the Department of Environmental Protection, Dan Esty, wrote an opinion piece in the New York Times that said we needed more pain at the gas pumps, as high prices would force us to develop alternative energy solutions.
It appears that Mr. Esty is getting his wish as the spring approaches, at least as concerns pain at the pump, and nowhere in New England is that pain more acutely felt than right here in Connecticut. Of all the New England states, Connecticut has the highest combined federal, state and local gasoline tax came in at 67 cents per gallon as of February 26, 2012.
Right now Connecticut’s gas tax is twenty-five cents per gallon, but that’s not the whole story. There is another gas called the “Gross Receipts Tax’ which is placed on gasoline at the wholesale level.
The Gross Receipts Tax changes just as the price of wholesale gasoline does. When the price goes up, the percentage of tax paid increases. It is assessed to distributors, but naturally, the tax is passed on from them top us at the pumps. It is a hidden tax that appears in the price of gasoline before the regular tax on gasoline is added.
Compare our sixty-seven cent combined tax to our neighbor to the east. In Rhode Island, the gas tax is sixteen cents less at fifty-one cents per gallon. To the north in Massachusetts, the combined gas tax is an astonishing twenty-six cents per gallon less at forty-one cents. No other New England state even comes close to having the high gas tax we have. And if you happen to drive out to New Jersey will save you over thirty cents per gallon.
A quick look at ConnecticutGasPrices.com, a great resource that I highly recommend, shows that the average price of a gallon of gasoline has risen 24.3 cents in just the last month and 40.5 cents over the previous year. As we approach warmer weather and get closer to Memorial Day you can be assured that the price of gasoline will increase.
The Malloy administration actually proposed raising the gasoline tax in the Governor’s 2011 budget up to twenty-eight cents per gallon. Had that been approved, we would all be paying seventy cents per gallon of gas in taxes right now.
I have joined House and Senate Republicans in a renewed call to cap the Gross Receipts Tax when the wholesale price of gasoline exceeds $3 per gallon. This would prevent a further massive tax increase on gasoline should the price of gasoline spike in coming months.
It will also help alleviate a concern we have at the borders. You can be certain that Connecticut residents who live near enough to Massachusetts and Rhode Island are not going to pass up the significant savings they would get by driving into those states to buy gas. By failing to keep our gasoline prices reasonably in step with surrounding states we are damaging business and jobs within Connecticut that rely on the sales of gasoline.
Earlier this week legislative Democrats announced that they would examine supporting a one-year cap on this gross-receipts tax, set to expire just before a major increase in the tax is scheduled to go up. In an election year, one might be tempted to question their motives, especially when one considers that between May of 2007 and today, the majority Democrats have rejected Republican attempts to cut the gas tax no less than fourteen times. That being said, their apparent change of heart is most welcomed.
The Gross Receipts Tax needs to be capped immediately. The status of our fragile economic circumstances and a decent respect for hardworking taxpayers in Connecticut demands it.