| Connecticut now has the highest gas
prices in the nation. While most of the factors that have
contributed to this harsh reality are outside our control
as a state, there is one important factor that Connecticut
can control – the amount we tax gasoline. Reducing
our gas taxes is one thing the state can do to provide
almost immediate relief to consumers. We should cut those
taxes because people desperately need some relief.
Connecticut levies two different taxes on gasoline.
The first is a flat tax of 25 cents per gallon. The
second tax is known as the Petroleum Gross Receipts
Tax. The Gross Receipts Tax is set at a percentage of
the wholesale price of petroleum. According to the Independent
Connecticut Petroleum Association (ICPA), at the current
rate of 7 percent, the Gross Receipts Tax costs consumers
approximately 25.7 cents per gallon of gasoline. The
Gross Receipts Tax had been set at 5 percent for many
years, but a series of increases was instituted in 2005
in order to pay for transportation projects, and that
tax is still increasing. It is scheduled to go up again
on July 1 when it is scheduled to increase to 7.5%.
A recent story in the Journal Inquirer compared gas
prices and gas taxes in Connecticut to our neighboring
states of Massachusetts, New York and Rhode Island.
That story showed that the difference in gas prices
between Connecticut and those other states could be
correlated, almost to the penny, to the difference in
the amount of gas taxes. For example, Connecticut consumers
pay 22 cents more per gallon of gas than consumers in
Rhode Island, while the difference in gas taxes is 19.7
cents. Similarly, we pay 28 cents more for a gallon
of gas than people in Massachusetts and 27.2 cents more
in gas taxes. Finally, when compared to New York, we
are paying 8 cents more per gallon of gas and 10.6 more
per gallon in gas taxes. As you can see, the difference
in gas prices appears to be directly related to the
difference in gas taxes; the higher the gas taxes the
higher the price of gas. That is why I am convinced
that lowering our gas taxes will result in lower gas
prices.
Since first coming to office in January 2007, I have
proposed eliminating the increases to the Gross Receipts
Tax and blocking the future scheduled increases. I was
able to show, using figures provided by the state’s
nonpartisan Office of Fiscal Analysis, that we could
do that and still fully fund our transportation projects.
My efforts have been defeated to date, but I will continue
to push for these reductions as the only thing we can
meaningfully do as a state to help consumers at the
pumps.
One obstacle to cutting the gas taxes is that the state
is now using the surplus tax revenue it generates from
the Gross Receipts Tax to help fund the state’s
general fund budget. With significant budget deficits
looming on the horizon, state policymakers will be more
reluctant than ever before to lower our gas taxes. My
argument to them is that we must decide what our priorities
will be. I would rather find the spending cuts we need
in order to pay for a reduction in our gas taxes so
that we can help people at the pumps, than throw up
our hands in despair and say that we cannot cut those
taxes because the state is now facing a deficit.
High gas prices are hurting Connecticut’s families
and businesses. The fact that our state government is
contributing to the pain at the pumps is something that
should bother all of us. I will continue to work to
lower Connecticut’s gas taxes. Meanwhile, I would
like to hear from your thoughts about this issue. I
can be reached at my legislative office in Hartford
at 1-800-842-1421, or via e-mail at Sam.Caligiuri@cga.ct.gov.
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