CT’s diesel tax increasing 9.1 cents
Republicans were quick to seize on the news Wednesday of a 9.1-cent increase in the state’s diesel tax as further evidence the state should use more of its budget surplus to help consumers facing decadeshigh inflation.
The state’s new diesel tax rate, which will rise from 40.1 cents per gallon to 49.2 cents, comes as GOP lawmakers are hosting a weeklong series of “affordability” rallies at gas stations around the state to draw attention to high prices at the pump and the rising cost of goods and services.
The new tax rate takes effect July 1, the start of the new fiscal year. The rate is recalculated annually, per law, and takes into account average wholesale diesel prices over the prior year.
“It’s a 23% tax increase on diesel, yet another reason why Connecticut is unaffordable,” said Senate Republican Leader Kevin Kelly, who was scheduled to hold a rally in his hometown of Stratford on Wednesday night. “And it’s preventable.”
Republicans have repeatedly called for a special legislative session to cut additional taxes before the start of the next fiscal year, but the proposal has been a non-starter with Democrats.
The GOP is pushing a $746 million tax relief plan, which includes reductions in the state’s income and sales taxes in addition to suspending state fuel taxes, on top of the $600 million in cuts and rebates already approved by the General Assembly and Gov. Ned Lamont.
They are also calling for an end to the highway use tax for heavy trucks that goes into effect on Jan 1 — another increase that is expected to be passed down to consumers.
“We have $750 million sitting on the sidelines today,” Kelly said. “I hear, daily, people talk about the pain at the grocery store,
the pain at the pump, the pain in their ability to pay bills, and the government has the opportunity to use those funds to help people.”
The proposed tax cuts are supported by Bob Stefanowski, GOP candidate for governor, who blamed Lamont for the diesel tax increase in a written statement Wednesday and repeated his calls to suspend state taxes on fuel through the end of the year.
“Higher costs for goods means higher inflation, and an even more expensive state,” Stefanowski said. “I urge Governor Lamont to suspend all state taxes on gas and diesel to help residents get through the current crisis that he and President Biden have created.”
Lamont has resisted GOP calls to suspend the diesel tax, saying the money raised through the tax is needed to repair Connecticut’s aging roads and bridges,
and that much of it is paid by out-of-state companies.
The governor also opposes using more of the state’s $3.8 billion budget surplus on further tax relief. Instead, he signed a budget that directs most of the surplus to be spent on extra payments on the state’s underfunded pension funds, which save taxpayers hundreds of millions of dollars annually for the next 25 years.
“The governor is worrying about tomorrow and next year when families are struggling today,” Kelly said.
In a written statement Wednesday, he and House Republican Leader Vincent Candelora, R-North Branford, continued to push Democrats to do more.
“People are suffering and raising taxes on the trucks that deliver our food and home heating oil, as well as our local landscapers,
plumbers, and workers is only going to make inflation even worse and increase costs on everything from groceries to home repairs,” they said.
In a news release announcing the diesel tax increase Wednesday, the governor’s tax commissioner, Mark Boughton, highlighted the “significant tax relief ” that will be coming for hundreds of thousands of Connecticut families “including checks for families with the child tax rebate, relief at the pump through an extension of the gas tax holiday, significant property tax cuts, and an enhancement of the earned income tax credit.”
“The Connecticut minimum wage will also increase on July 1, putting even more money in peoples’ pockets,” Boughton said.