Gov. Dannel P. Malloy may be urging the General Assembly to pass a budget Monday or Tuesday next week, but he said there’s still room for some small changes to the tax package over the weekend.
One of those changes may be his proposal to increase one of the two gas taxes by $0.03 per gallon.
“We’re going to have a budget pretty soon and I understand that’s a concern,” Malloy said of the gasoline tax. He said he understand the “optics” of the tax at a time when gas prices are more than $4 per gallon at the pump.
But he refrained from saying that it was something that will definitively be removed from the budget because he has concerns about the pending deficit in the special transportation fund.
Historically the General Assembly has raided the gross receipts tax portion of the special transportation fund to help balance the general operating budget and Malloy is seeking to stop that practice by making sure the transportation fund is fully funded.
Sen. Eileen Daily, co-chairwoman of the Finance Committee, said if there’s some way to reduce the gas tax “we would want to do that.”
While he won’t be voting in favor of the budget Senate Minority Leader John McKinney, R-Fairfield, said it would be a wise thing for the governor and the Democratic majority to eliminate the gas tax hike. He said it would be even wiser if they capped the gross receipts tax, which is the second gas tax that is currently 7 percent of the wholesale price.
He said the gross receipts tax is going up every day and they’re probably realizing enough money from it to eliminate the $0.03 gas tax, which would increase the first gas tax to $0.28 per gallon.
Malloy’s budget estimated the gas tax increase would generate about $45 million in each year of the budget. Ben Barnes, Malloy’s budget director said he doesn’t expect it to make up the difference even though it is increasing as gas prices increase. The petroleum gross receipts tax is bringing in $16 million more this year than it did last year.
According to the Independent Connecticut Petroleum Association the gross receipts tax on April 15 was about $0.24 per gallon, the highest its been since 2008. That means when it gets added to the flat gas tax of $0.25 and the $0.18 federal excise tax the total gas tax burden is about $0.67 per gallon in Connecticut, among the highest in the nation and the absolute highest in the Northeast.
Democratic lawmakers repealed a scheduled increase in the gross receipts tax back in 2008, but rejected the idea of capping it.