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Connecticut lawmakers to vote on 25-cent gas tax holiday

March 22, 2022 GMT

The General Assembly is expected to vote Wednesday on a proposal to suspend the state’s 25-cent-per-gallon excise tax on gasoline in hopes of easing the pain at the pump for Connecticut motorists.

An early version of the emergency bill would suspend the tax between April 1 until June 30, the last day of the current fiscal year. The broad concept of suspending the tax, announced publicly last week by Democratic Gov. Ned Lamont, has received bipartisan support.

House Speaker Matt Ritter, D-Hartford, said Tuesday the House of Representatives and Senate are also expected to consider a second sales-tax-free week on clothing and footwear in April, in addition to the one typically held in August for back-to-school shoppers, and temporary free bus service to riders.

State legislators and the governor, who are all facing re-election in November, have been under pressure to blunt the state’s high gasoline prices. As of Friday, the state’s average price for a gallon of regular unleaded gasoline was $4.37, according to AAA. While that was down 11 cents from the prior week, it was still up 71 cents per gallon compared to February and $1.47 compared to this time last year.

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Connecticut has two taxes that apply to motor fuels. They include the 25-cent-per-gallon motor vehicle fuels tax, typically referred to as the state’s gas tax, and the fluctuating petroleum products gross earnings tax.

The Connecticut Energy Marketers Association, which represents the state’s motor fuels industry, is urging state lawmakers to refund state taxes the gas retailers have already paid for the fuel in the tanks. If that doesn’t happen, Chris Herb, the association’s president, warned motorists won’t see the gas tax reduction right away. He said Maryland enacted a refund when it implemented a gas tax holiday.

“We are simply asking for that tax money to be refunded to the gas stations’ owners so that we can pass along those tax savings immediately to the consumer,” said Herb, noting the average gas station has two 10,000 gallon tanks and paid at least $5,000 in state excise taxes for that fuel.

There are 1,400 gas stations in Connecticut.

Ritter said lawmakers are limited in how much of the state’s transportation revenues they can use to lower the fuel taxes. Connecticut pays for its transportation projects every year by issuing revenue bonds that are ultimately paid off with money in the transportation fund and a certain debt-to-revenue ratio must be maintained.

“If we fail that test, we wouldn’t be able to issue bonds. And if you can’t issue bonds, then you can’t get your federal match,” he said, referring to federal government’s share of transportation projects.