Gas tax fight [Journal Inquirer]

Article as it appeared in the Journal Inquirer

By Ed Jacovino Journal Inquirer
Wednesday, June 26, 2013

HARTFORD — Legislative Republicans are looking to fuel public criticism and force Gov. Dannel P. Malloy and majority Democrats to block an increase in the gas tax that takes effect Monday.

“There’s a time and place for increases in gross receipts tax. This is not the time, and Connecticut is not the place,” House Minority Leader Lawrence F. Cafero Jr. of Norwalk said.

The state levies a gross receipts tax on the wholesale price of gasoline and diesel fuel. It’s set to increase from 7 percent to 8.1 percent July 1. That would increase the cost of gasoline by about 4 cents a gallon, and bring in an extra $60 million for the state each year.

But Cafero and Senate Minority Leader John McKinney of Fairfield want to reverse that.

They and other Republicans on Monday held news conferences and distributed petitions at gas stations across the state to try to pump up opposition to the increase.

One such event was in Tolland, where Sen. Tony Guglielmo of Stafford and Reps. Tim Ackert of Coventry and Sam Belsito of Tolland collected signatures.

“We expect the public pressure is going to get so high that they’ll want to come back in, hopefully, in the fall,” McKinney said of legislative Democrats.

He added that residents not only will pay more for gas with the gross receipts tax hike, but will fork over more for groceries and other goods because diesel fuel will cost more.

The legislature approved the tax increase in 2005 in a bill that got bipartisan support and was signed by Gov. M. Jodi Rell, a Republican. Cafero and McKinney both voted for it.

But since then, legislative Republicans have sought to block or reverse the increases, citing the poor economy and regular raids on the Special Transportation Fund. Money in that fund comes from fuel taxes and is supposed to be earmarked for infrastructure, but lawmakers routinely tap the fund to balance the state budget.

Other attempts to stop gas tax increases have been successful.

Four years ago, lawmakers blocked a scheduled gross receipts tax hike from 7 percent to 7.5 percent. And last year lawmakers capped the tax, stopping it from collecting more when the wholesale price of gasoline is above $3 per gallon.

But Republicans aren’t getting sympathy from Malloy this time.

“They’re doing what they always do — and that’s play politics with an issue,” the governor said on Monday. “Every time they talk about it they should have a big thing on their chest that says, ‘I voted for the tax.’”

Malloy also said he’s trying to avoid the raids on the Special Transportation Fund.

The two-year budget Malloy signed into law this month takes the $60 million from the increased gas tax plus $30 million more out of the Transportation Fund and deposits it into the General Fund, the state’s main checking account. But it also reduces the regular raids on the Transportation Fund, especially in the budget’s second year.

“At the end, we’re putting more money into the fund than has been put in for the last four years,” Malloy said.

As for finding the $60 million the state would lose if it blocks the gas tax hike, Cafero and McKinney suggest raiding the Rainy Day Fund, tapping into the “suggestion box” and other savings in the 2011 labor concession agreement, and instituting a hard hiring freeze on state employees.

The gross receipts tax is one of three taxes on gasoline. There’s a flat 25 cents per gallon tax imposed by the state and a federal tax of 18.4 cents per gallon.