Knowing that a Republican senator from Meriden has been collecting signatures calling for the state to cap its gross receipts tax on gasoline, a Democratic senator is warning drivers it doesn’t mean they will see relief at the pump.
For those unfamiliar with gas taxes, the gross receipts tax is often referred to as the “hidden” gas tax. Currently, the tax is 7 percent of the wholesale price of gas, and Sen. Len Suzio, R-Meriden, is proposing capping it once the wholesale price hits $3.
Sen. Paul Doyle, D-Wethersfield, argues capping the tax would benefit big oil companies, and not consumers.
“History has proven that gas tax cuts end up benefiting oil companies rather than consumers, who still pay high prices to fill up their tank,” Doyle said Monday. “Giving big oil companies a tax break is not a sound strategy for consumer protection.”
But Michael J. Fox, executive director of the Gasoline & Automotive Service Dealers of America, said a federal court found in the 1980s that the tax can be passed along to consumers. He said the fight should be over eliminating the percentage aspect of the tax. He said it should be a flat tax instead.
On Monday the gross receipts tax was about 21 to 22 cents per gallon. That’s in addition to the gasoline tax, which is a flat 25 cents and a federal gas tax of 18 cents.
Fox said Doyle is confusing the issue by calling for it not to be passed along to the consumer.
“To get a Democrat to support a tax cut is like pulling teeth,“ Suzio said Monday after his root canal. “Massachusetts and Rhode Island have lower gas taxes and it’s about the 25 cents per gallon lower than here.”
He said it’s lower because they don’t have a gross receipts tax.
Some like Gov. Dannel P. Malloy argue that Massachusetts and Rhode Island, and other surrounding states don’t have a similar tax on gasoline because they have tolls, Connecticut does not.
“This is how we pay for transportation in the state of Connecticut and unlike other governor’s what I did in the last session and what I did in this budget was guarantee, every fuel tax dollar actually goes into transportation,” Malloy has said.
Previous administrations and legislature’s funneled the money from the gas tax into the general budget where it would be used to pay for everything from operating costs to other state services.
Malloy said because of this shuffling of the money away from its intended purpose Connecticut did a really bad job of investing in its transportation infrastructure over the last 20 years. He vowed to break those bad habits.
Doyle said he too worries about the state’s crumbling roads and bridges and fears giving up any of the revenue from the tax would jeopardize the state’s infrastructure.
“While I appreciate the zeal for tax cuts in general, I find unacceptable any tax cut that does not get passed to consumers at the pump and that could jeopardize the safety of drivers on state roads and bridges,” Doyle said.
Doyle admits that maintaining a tax isn’t exactly the most popular political position to take in an election year, but he said the consumer remains his real focus. He said he remembers that a change to the gas tax in the late 1990s never made its way to consumers and he doesn’t want that to happen again.
Fox said about half the tax breaks back then did make their way to consumers, but some of it was eaten up by the rising retail price of gas, which impacts the amount gas station owners are charged in credit card fees. He said the gas station owners have to pass a certain amount of their costs along to consumers.