Legislative hearing on Gas Tax and Cigarette Tax on this Friday, March 2, at Noon
GAS TAX
S.B. No. 10 AN ACT CONCERNING REVENUE ITEMS TO IMPLEMENT THE GOVERNOR'S BUDGET
The gas tax is not a separate piece of legislation, but rather is contained within the governor's budget bill. We OPPOSE increasing the excise tax on gasoline by 7 cents/gall. over four years. INSTEAD use this opportunity to discuss the merits of changing the gross earnings tax to a fixed tax rate instead of a percentage-based one in order to stabilize revenue for budgeting purposes.
Connecticut is at a tremendous disadvantage because of the current taxes that are levied on gasoline. We have the highest tax in New England on gasoline and are consistently in the top three nationally. Because of this tax disadvantage, gallons leave the state where the price is lower and with it goes tax revenue. Current gas tax policy in Connecticut is boom or bust! When the wholesale price of gas is $3.00 per gallon or more the tax generates 26.4cpg, but as the market declines as it did in 2014, the GET was only generating 10 or 11cpg – a 16cpg difference from the maximum tax.
The current GET has an effective rate of 8.81% (on top of the 25cpg state excise tax), and generates approximately 14 cents per gallon (cpg) at today’s price. This is in stark contrast to the revenue that the tax was generating when wholesale prices were at or above $3.00 per gallon, and the tax was generating over 26cpg. This 12cpg decline in GET revenue (if maintained over a year) would cost the state $172,066,601.
Since the gallons of gasoline that are sold in Connecticut are relatively stable (approximately 1.4 billion gallons per year) fixing the GET at a fixed 16cpg would generate approximately $224 million opposed to the $196 million that the tax would generate if it remained at the current 14cpg.
Hearing Date/Time: Friday, March 2, 2018, starting at noon
Place: Legislative Office Building, Room 2E
300 Capitol Ave., Hartford
GAS TAX
S.B. No. 10 AN ACT CONCERNING REVENUE ITEMS TO IMPLEMENT THE GOVERNOR'S BUDGET
The gas tax is not a separate piece of legislation, but rather is contained within the governor's budget bill. We OPPOSE increasing the excise tax on gasoline by 7 cents/gall. over four years. INSTEAD use this opportunity to discuss the merits of changing the gross earnings tax to a fixed tax rate instead of a percentage-based one in order to stabilize revenue for budgeting purposes.
Connecticut is at a tremendous disadvantage because of the current taxes that are levied on gasoline. We have the highest tax in New England on gasoline and are consistently in the top three nationally. Because of this tax disadvantage, gallons leave the state where the price is lower and with it goes tax revenue. Current gas tax policy in Connecticut is boom or bust! When the wholesale price of gas is $3.00 per gallon or more the tax generates 26.4cpg, but as the market declines as it did in 2014, the GET was only generating 10 or 11cpg – a 16cpg difference from the maximum tax.
The current GET has an effective rate of 8.81% (on top of the 25cpg state excise tax), and generates approximately 14 cents per gallon (cpg) at today’s price. This is in stark contrast to the revenue that the tax was generating when wholesale prices were at or above $3.00 per gallon, and the tax was generating over 26cpg. This 12cpg decline in GET revenue (if maintained over a year) would cost the state $172,066,601.
Since the gallons of gasoline that are sold in Connecticut are relatively stable (approximately 1.4 billion gallons per year) fixing the GET at a fixed 16cpg would generate approximately $224 million opposed to the $196 million that the tax would generate if it remained at the current 14cpg.
Hearing Date/Time: Friday, March 2, 2018, starting at noon
Place: Legislative Office Building, Room 2E
300 Capitol Ave., Hartford