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Lamont, lawmakers eying suspension of 25-cent state gas tax

March 14, 2022 GMT

With prices rising at the pump, Democratic Gov. Ned Lamont unveiled a proposal Monday to suspend one of Connecticut’s two taxes on gasoline by 25-cents-per-gallon until June 30, urging the General Assembly to enact the measure as soon as possible.

Lamont, who met privately with Democratic and Republican legislative leaders prior to his announcement, said he also hopes lawmakers will consider other proposals to create a sales-tax-free week on clothing and footwear in April, in addition to the one typically held in August, and to provide free bus service during the month of April.

“I think I can tell you there was a strong consensus that now is the time to provide immediate relief to the people of Connecticut,” Lamont said.

Connecticut has two taxes that apply to motor fuels. They include the motor vehicle fuels tax, typically referred to as the state’s gas tax, and the fluctuating petroleum products gross earnings tax, which has risen to 26.4 cents per gallon in recent weeks.

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The conflict between Russia and Ukraine continues to affect crude oil and gas prices across the U.S., prompting various governors and state legislators to call for suspending taxes on gasoline to provide motorists relief. In Connecticut, the average price for regular unleaded gas reached $4.48 per gallon on Friday, exceeding a record of $4.39 set in 2008, according to AAA.

Both the Democratic-controlled House of Representatives and Senate are scheduled to hold sessions on Wednesday. However, it’s unclear whether that will be enough time for both chambers to be ready to vote on the gas tax suspension or the other provisions.

Republican legislators, who last week called for suspending the state’s petroleum gross receipts tax until June 30, said they welcome Lamont’s proposal. However, they stressed that more needs to be done later on in this year’s legislative session to further reduce the tax burden on residents.

“We’re not going to just say that’s enough and move on,” said Senate Minority Leader Kevin Kelly, R-Stratford. “I think the families across Connecticut need all the help that they can get. We hear that, We want that and we’re going to continue to work for that.”

House Minority Leader Vincent Candelora, R-North Branford, said given the rules for states on spending federal COVID-19 relief funds, Connecticut is limited to spending about $180 million between now and June 30 on tax relief. The plan announced by Lamont would cost about $100 million.

“We are going to reserve the conversation for what additional relief we should be giving taxpayers next year,” he said.

Besides this latest focus on the gas tax, both Republicans and Democrats have proposed various tax-cutting proposals this session, ranging from an increased tax credit for low- to moderate-income working individuals and families to lowering the state’s 6.35% sales tax rate to 5.99% through the rest of 2022 or possibly longer. The 2022 legislative session adjourns May 4.