If Democratic legislators fail to act, the wholesale gross receipts tax will increase from 7 percent to 8.1 percent; the tax was originally levied at 1 percent. That increase, coming just in time for vacation season, amounts to roughly four cents per gallon or $60 million more per year.
“The state profits more from your pain at the pump than credit card companies, store owners, and the federal government combined,” Klarides said. “This tax is ballooning at a disproportionate rate, yielding no significant enhancement to the safety of our bridges and roads.”
“In the past year the state hired 5,300 new employees as state bureaucracy grew by leaps and bounds. We must stop asking more and more from commuters to accommodate the ever-increasing size of state government. It’s not fair to families and businesses in this stagnant economy.”
The combined local, state and federal gas taxes total 63.4 cents per gallon in Connecticut – more than 14 cents per gallon above the national average.
Klarides added “Budgeting is all about priorities, and this is a prime example of majority legislators’ unwillingness to make tax relief a priority, despite the fact that there are other sources from which this revenue can come.”
Alternative sources from which the $60 million in anticipated revenue can come:
- Rainy Day Fund, $100 million
- Hard hiring freeze, $100 million
- Newly realized health care savings, $223 million (per the Office of Fiscal Analysis)
- Citizens’ Election Fund, $10 million
- Elimination of the Earned Income Tax Credit, $116 million
Since 2007, Klarides supported 17 separate proposals to permanently cap the gas tax, which were continually voted down by the majority. Last year, Republicans succeeded in pushing Democrats to block the tax hike for one year – a temporary cap that will expire this July. They defeated the Republicans’ amendment to permanently eliminate the increase.
The 2013 Legislative Session adjourns June 5.