HARTFORD, Conn. -- Majority Democrats in the Connecticut House of Representatives are considering canceling a $40 million increase in annual gasoline taxes coming fiscal year, said The Journal Inquirer.
State House Speaker James A. Amann (D) confirmed for the newspaper that his office is researching whether to suspend a scheduled increase in one of the state's two gasoline taxes, a jump from 6.7% to 7.5% in the tax levied on wholesale gasoline transactions.
Given that prices already are skyrocketing, and that retailers stated [image-nocss] publicly that the wholesale levies are passed on entirely to consumers through prices at the pump, Amann said it may be time to hold off on asking for more. I think everyone is concerned about the price of gas, he said. I think if we can do something about it we would want to.
Connecticut already has some of the highest gasoline prices in the nation, said the report. The state collects a flat tax of 25 cents per gallon, directly from consumers, when they fill up their tanks. But many motorists don't know that state government already has taxed, and thereby increased, the price of gasoline before that gasoline ever was pumped into their car or truck. The report added. Connecticut also levies a petroleum products gross receipts tax. It is applied, in most cases, to wholesale gasoline transactions, such as when a distributor sells fuel to a local gas station.
The General Assembly and Governor M. Jodi Rell in May 2005 unanimously backed a plan for four successive annual gross receipts increases, each July between 2005 and 2008. The goal was to raise an extra $80 million by 2008 to help support new transportation projects.
But because of rising gasoline prices, the tax pulled in an extra $90 million from the first increase alone, said the report. Bringing in $179 million in 2004-05, it pulled in $275 million last fiscal year and is expected to produce $300 million in revenue this year, it said.
This rate hike scheduled for July 1 would push the state's take up to $340 million.
Currently, $141 million from this year's collections is transferred to the transportation fund, and that transfer is supposed to grow next year to $164 million.
So why, if state government already is collecting $300 million, does it need another increase, the newspaper asked. It may not be needed, Amann told the Journal Inquirer, adding that he wants to be sure that if the tax hike is suspended, that the transfer to the transportation fund is not affected.
Rell's budget director, Robert L. Genuario, said the administration is open to discussing a suspension of the tax hike, adding that Democrats could still protect the transportation funds simply by looking for means to cut spending in nontransportation programs.
The Republican governor, who proposed a system to limit wholesale gasoline collections but not to prevent the next tax hike, has complained frequently in recent months about rising prices. For more than a year and a half, this tax has produced millions of dollars more than originally anticipated because of the rising cost of the price of oil, Rell said. The people of our state are crying out for relief. They cannot wait any longer.
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