Gas tax cut, free buses set to extend

Lawmakers to vote Monday on measure meant to fight inflation

HARTFORD — The state legislature is expected to vote Monday on extending the gasoline tax cut and free public buses — pushing the relief into 2023 to combat the highest inflation in the past four decades.

After Gov. Ned Lamont and lawmakers worked behind the scenes on the measure, the final details of the multifaceted bill were released Wednesday.

The temporary cut in the gasoline tax of 25 cents per gallon will now be extended through Dec. 31, rather than ending on Dec. 1. The tax will be phased back in over five months in increments of five cents per gallon.

This means that the tax cut will be reduced to 20 cents per gallon on Jan. 1, 15 cents per gallon on Feb. 1, and then continuing until there is no tax cut at all, said a summary that was sent to legislators. By early May, gasoline prices will be up by 25 cents per gallon.

At the same time, free public bus service will be extended through March 31, rather than ending on Dec. 1.

“Federal regulations provide for a 12 month fare-free period in the absence of a public comment period,’’ said the summary. “Because fares were halted in April 2022, collection must resume on

April 1, 2023 to remain compliant with federal rules.’’

Various dates for the extensions had been mentioned in recent weeks before the final compromise was reached.

“I’m asking the legislature to extend for several additional months the suspension of Connecticut’s gas tax that has been in effect since April, as well as the waiving of fares on all public transit buses,” Lamont said Wednesday. “Additionally, I am proposing to allocate more funding to our energy assistance program to ensure that we can meet the needs of our residents, and make available more funding for the Premium Pay program for essential workers. These actions can help provide more immediate relief for Connecticut residents as consumers across the country are facing rising prices due to a number of international dynamics and market instability that go far beyond our state.”

In addition, the legislature is expected to set aside $90 million to help provide $1,000 bonuses for essential workers who held jobs in grocery stores, nursing homes, and other outlets during the coronavirus pandemic. The bonuses could drop to about $233 each if no additional money is set aside, according to state calculations.

“Negotiations are ongoing regarding the income-eligibility brackets,’’ the bill summary states. “The goal is to provide the most low-income applicants with the majority of the financial aid. The applicant pool is currently 134,010 applications submitted. There will be set aside funding to resolve potential eligibility appeals.’’

But Senate Republican leader Kevin Kelly of Stratford said that the 25 centsper-gallon cut should be extended through the end of the current fiscal year on June 30, 2023.

“I like a lot of what’s in the package because a lot is our ideas to begin with,’’ Kelly said in an interview Wednesday. “But I don’t think they go far enough. The taxpayers need a break. [The Democrats] all campaigned less than a month ago on being tax-cutters.’’

Both Kelly and House Republican leader Vincent Candelora of North Branford have pushed back sharply on aspects of Lamont’s plans.

With the largest rainy day fund in state history last year at $4.3 billion and another general fund surplus projected at nearly $2.8 billion for the current fiscal year, both Kelly and Candelora said the state has enough money to pay for the tax cut at a time of the highest inflation in four decades.

“We don’t have any evidence of an economic recovery, and so until then, I don’t see why we would be reinstituting a tax on residents at a time when there is no economic recovery in sight and at a time when our coffers are full,’’ Candelora said recently. “Sales taxes and gas taxes are up because of inflation. We should be giving that money back to residents.’’

With the state budget surplus hitting record-breaking levels, Connecticut legislators voted unanimously in March to temporarily suspend the tax as of April 1 because already rising prices had skyrocketed even further after Russia invaded Ukraine.

The tax-cutting action was taken in an election year when the average price was $4.32 per gallon. Prices have dipped since then, but they are still volatile and subject to further increases. The average price on Wednesday was $3.60 per gallon nationally and $3.68 per gallon in Connecticut.

Nationally, Connecticut ranks among three states that are currently suspending their gasoline tax. The tax relief is expected to end in Georgia on Dec. 11 and in New York on Dec. 31.