The legislature’s Democratic majority proposed capping the gasoline gross receipts tax for one year following months and some would argue years of Republican lawmakers trying to push for similar measures.
Under a plan released by Democratic lawmakers Monday, the gross receipts tax would be capped when the wholesale price of gas reaches $3 per gallon. But the Democratic proposal would sunset before the gross receipts tax is expected to increase to 8.81 percent on July 1, 2013.
Aside from the sunset provision, it’s the same proposal put forth by Sen. Len Suzio earlier this year, who was quick to criticize the temporary tax relief which will end at the same time as the tax increases 15 percent.
However, Democratic lawmakers argue their plan is different because it includes additional provision to crackdown on petroleum profiteering.
“The Republicans have been talking about one thing, and one thing only,” Sen. President Donald Williams said. “And that is a cap on the gross receipts tax.”
He said since the beginning of the year, the state has seen its wholesale price of gas go up 42 cents, twice as much as the gross receipts tax, “based purely on speculation.”
“That’s unacceptable. There’s no supply or demand issue driving that price increase it’s pure Wall Street speculation,” Williams said.
Williams said the reason Connecticut’s gas taxes may be higher than those of Massachusetts is not because of the gross receipts tax, it’s due to market speculation. But as a state lawmaker there’s nothing he can do about market speculation.
The goal of the Democratic proposal is “understanding we can’t control the world market, but every tool at our level has been deployed and folks who come into Connecticut and try and profit and price gouge will be prosecuted,” Williams said.
As soon as the Democratic lawmakers departed from the podium set up outside the Capitol, Republicans lawmakers cannibalized it.
“It is with great admiration that I say thank you to the Senate Democratic leadership,” House Minority Leader Lawrence Cafero said.
He said since 2008 Republicans have put forth proposals to cap the gas tax. He said on eight occasions they put forth the same proposal only to have it shot down by the legislature’s Democratic majority.
“I think they realize people out there are angry and frustrated and looking for government to do something,” Cafero said.
And yeah, it also happens to be an election year for legislators, he said. He suggested Democrats may have caved to public pressure by agreeing to the measure.
It’s unclear how quickly the legislature will act to pass the measure and exactly what vehicle they would use to implement it.
“I’m hopeful this rises to the same level of urgency as I think it should,” Cafero said.
He suggested they could pass the legislation “as soon as tomorrow.”
Republicans called on Democratic leaders later in the day Monday to fast track the proposal through the legislature as an emergency certified bill.
Sen. Minority Leader John McKinney, R-Fairfield, also welcomed Democratic support.
“This is a good day,” he said. “Not just for Republicans who have been pushing this issue…but for the people in the state of Connecticut who have been struggling with high taxes, high cost of business.”
McKinney said Connecticut motorists pay some of the highest gasoline taxes in the nation.
Based on the average regular price per gallon, state gasoline taxes are close to 49 cents.
If the $3 cap was enacted the gross receipts tax would be capped at about 22 cents per gallon, which means based on today’s wholesale price of $3.18 per gallon motorists would save about 1.3 cents per gallon, according to the Independent Connecticut Petroleum Association.
“This plan will put more money in consumers’ pockets and protect them from irresponsible profiteering,” House Speaker Chris Donovan, D-Meriden, said.
Suzio said he’s happy to see that Democratic leadership has finally “picked up the baton,” but what is being proposed is only “half-a-step.” It’s a half step because it would expire in a year.
“If price gouging is wrong all the time, so is tax gouging,” Suzio said. “What I heard today is that we reserve the right to resume tax gouging in Connecticut a year from now. I’m sorry folks that’s wrong.”
But Democratic lawmakers bristled at the notion good ideas are partisan ideas.
“We want to incorporate all good ideas, but there was no protection in the plan advanced by the Republicans,” Williams said. “More importantly we’re going after the root cause which the Republicans have ignored.”
He said their proposal gives additional powers to the attorney general to crackdown on profiteering.
According to Gov. Dannel P. Malloy’s spokesman Andrew Doba the governor is supportive of the concept, but still needs time to go over the full proposal.