With back-to-back votes Wednesday, Connecticut’s House and Senate approved a bipartisan bill suspending for three months the state’s 25 cent-per-gallon excise tax on gasoline in an effort to provide relief from historic fuel prices.
The bill, emergency certified by legislative leaders in order to bypass the traditional committee process, suspends the state’s gasoline tax from April 1 until June 30 and provides free bus services during the same period. It also creates a sales tax holiday on clothing and shoes valued at less than $100 from April 10 to April 16.
Gov. Ned Lamont, whose administration negotiated the bill with legislative leaders, has promised to sign the legislation when it reaches his desk. Lamont and lawmakers are facing re-election this year as gas prices have shot up around the country, driven in part by the Russian invasion of Ukraine.
During the House debate, Rep. Sean Scanlon, a Guilford Democrat who co-chairs the state tax-writing committee, said the proposal attempted to ease burdens caused by forces beyond the legislature’s control.
“Obviously our constituents didn’t start a war in Ukraine. Obviously our constituents did not contribute to the global supply chain crisis that has been happening due to COVID,” Scanlon said. “But our constituents are asking us, as their representatives, to do whatever we can within our abilities as their state legislators to make a difference and to lower their costs.”
The bill passed both chambers unanimously. Republicans in the House lamented that the legislation did not target the gross receipts tax nor include tax breaks on other goods like diesel fuel and heating oil. Still, they called it a step in the right direction.
“Of course all of us would like this to go a lot longer,” House Minority Leader Vincent Candelora said, “but it is a time when we’re in the budget process. It is the beginning of these discussions. I am just grateful this legislature has made this discussion a priority … Certainly when we all come together, we can do very good things.”
Although the bill received bipartisan praise in the Senate Wednesday evening, there were complaints in the upper chamber as well. Sen. Cathy Osten, a Sprague Democrat who co-chairs the legislature’s Appropriations Committee, raised and then tabled an amendment to spare agricultural vehicles the impact of a soon-to-be implemented highway use fee.
“I’m going to pull the amendment now and not require a vote but I will not let this issue die on the floor today,” Osten said. “It will be a part of further negotiations with the administration.”
Westport Democrat Sen. Will Haskell, meanwhile, worried about the tax holiday’s $90 million reduction in revenue to the state’s Special Transportation Fund. Haskell, who co-chairs the Transportation Committee, cautioned the chamber against embracing a more permanent suspension of the gas tax.
“That is a pro-pothole policy,” Haskell said. “That is a policy that makes trains slower. Unless we start to hear support for other ways to fund our Special Transportation Fund, that would deliver a debilitating blow to our ability to fund critical infrastructure projects.”
Sen. Paul Formica, R-East Lyme, said given high rates of inflation and gas prices, it was an appropriate time for the legislature to be scaling back taxes on state residents.
“While I understand the prudence of investing in our infrastructure and prudence in investing in our economy, we also have to make sure that we’re fair to our taxpayers at a time when they need it most,” Formica said.
Ahead of this week’s vote, state gas station owners, through the Connecticut Energy Marketers Association, lobbied lawmakers to provide them with a rebate for taxes paid on fuel already in their inventory.
The legislature declined to adopt such a rebate. Scanlon said most gas stations sell their inventory every three to five days, meaning the taxed fuel would most likely be depleted before the tax holiday kicks in next week.
The association responded with a press statement suggesting lawmakers had proposed gas stations let their inventories run dry.
“We once again ask them to reconsider the simple solution of issuing a tax refund to avoid any turmoil in the days leading up, and following the first month, of the gas tax holiday,” the CEMA release read.
During a Wednesday event, the governor said his administration would continue to work with gas station owners.
“They’ve got a fair amount of gasoline, you know, underground that they’ve already paid for,” Lamont said. “We want to make sure that gets out before they have to put in the 25-cent cut but I think that will be within a week.”