This session we witnessed something truly unique- both chambers of the Connecticut General Assembly unanimously agreed on cutting a tax, and the Governor is poised to sign it into law. It’s no small deal. Anyone who has lived inConnecticutfor more than a handful of years knows the legislature has always been highly resistant to cutting any taxes.
Connecticut’s gross receipts tax on the wholesale price of gasoline combined with its twenty-five cent tax at the pump allowsConnecticutto maintain one of the highest combined taxes on gasoline in the nation.
The gross receipts tax is roughly a 7% tax on the wholesale price on gasoline which rises as the wholesale price rises. Since I have taken office I have called for a reduction in our high gas taxes and a cap on the gross receipts tax so that market conditions won’t result in an undue windfall for the state’s coffers at the expense ofConnecticutmotorists who are already paying high market prices at the pumps.
Only a year ago the Malloy administration had proposed a three-cent per gallon increase on the tax and the Commissioner of the Department of Energy and Environmental Protection had published a controversial opinion piece in the New York Times suggesting that painful prices at the gas pumps were in fact desirable to prevent people from using their vehicles and damaging the environment.
This point of view ignores the Connecticut commuter who needs to get to work and also ignores the damage high fuel costs do to the mechanisms of the state’s fragile economy at any time, but particularly as we emerge from this significant recession.
Of all the New England states,Connecticuthas the highest combined federal, state and local gasoline tax came in at 67 cents per gallon as of March 19, 2012.
Public outcry finally proved too much to resist, and legislative Democrats and Governor Malloy agreed to go along with the House and Senate Republican proposal. At first, they planned to make it for only one year, but then conceded to make the reduction permanent.
However, on July 1st, 2013, the 7% gross receipts tax is scheduled to increase to 8.1%. An amendment was offered to eliminate this scheduled increase, the measure was defeated on a near party-line vote and the scheduled increase remains.
Both the majority and the Governor support what seemed an impossibility- a tax cut has happened in Connecticut, and I thank my colleagues on both sides of the aisle who have helped provide this relief to Connecticut motorists.