Early Thursday morning the Senate and the House each voted to repeal the scheduled increase in one of the two state gas taxes.
Democrats in both chambers blocked a Republican attempt to debate a proposed cap on the tax, which is currently levied as a percentage of the wholesale price of gasoline.
Republican Sen. William Nickerson, R-Greenwich, said the bill to stop the increase in the gross receipts tax eliminates the half percent scheduled increase, but it “would not eliminate gasoline price increases.”
The gross receipts tax on gas is currently 7 percent or about 25 cents per gallon based on a wholesale price of gas at $3.40 per gallon. The wholesale price of gas at the beginning of April was about $2.97.
Nickerson said if the wholesale price of gas remains at $3.40 per gallon after July 1 at the current 7 percent rate, then motorists will save a whopping 1.7 cents per gallon, if the legislature postpones the half percent increase. For a motorist who drives 15,000 miles a year and gets 25 mpg, it means they would save $10.20 a year, Nickerson said.
If the wholesale price of gas continues going up, then the state will have done nothing to help motorists by stopping the increase in the tax rate, Senate Minority Leader John McKinney, R-Southport, said. He said he challenged any lawmaker to get up and say they believe gas prices are going down. No one stood up.
McKinney also wanted to point out that the public is catching on and beginning to understand the tax and how revenue it raises is supposed to go to transportation improvements, but instead a large portion of the revenue gets transferred into the general fund.
“They’re starting to get it,” he said. And “It looks a little gimmicky.”
Even at 7 percent the tax is bringing in $116.5 million more than anticipated, he said. “That’s more than enough money for what we need,” McKinney said.
Sen. Eileen Daily, D-Westbrook, said “It is a service to our citizens not to pass along this increase.” She said the revenue from the tax goes to fund mass transit, not to mention it will help the state deal with its project 2009 budget deficit.
Rep. Art Feltman, D-Hartford, who is not seeking re-election next year, said he has to wonder, “Is this a bill we really believe in, or are we just posturing?”
Rep. Cameron Staples, D-New Haven, said “there will be a need for additional revenue in the future.” Sen. Toni Harp, D-New Haven, said it would be “irresponsible to cap the gross receipts tax,” because the state needs the money.
Both Staples, who heads the Finance Revenue and Bonding Committee, and Harp, who heads the Appropriations Committee, said the state needs the funding to continue its operations and make improvements to the transportation infrastructure.
The bill the General Assembly passed would also allow gas stations to offer cash discounts to motorists. There was no debate on this portion of the bill. The Attorney General estimated earlier this week that the move could save motorists about 10 to 12 cents per gallon.