— State gasoline taxes would drop by about a penny a gallon under a one-year cap on the gross receipts tax, as proposed Monday by Democratic legislative leaders.
The penny savings is at today's wholesale prices, and the savings could rise to 7.5 cents a gallon under the state's complicated gas taxes if the wholesale prices rise by a dollar a gallon.
The good news is that legislators are prepared to move quickly to give some relief from skyrocketing prices – even if they lack the power to slash prices for an important commodity whose price changes because of market fluctuations and Middle East turmoil.
The bad news is that the proposed Democratic tax cap at $3 a gallon would end on June 30, 2013. That date is important because current state law calls for the gross receipts tax to jump on the following day — July 1, 2013 — to 8.81 percent from the current 7.53 percent.
"It's actually a 15 percent increase'' in the tax, said Sen.
"People are predicting the price of gasoline could go to $5 per gallon this summer,'' said Senate President Pro Tem Donald Williams, the highest-ranking senator.
After the Democrats finished their press conference outside the state Capitol on a warm day, House Republican leader Larry Cafero stepped to the microphone and said, "You have to admire a person who admits they're wrong and changes their mind.''
He added, "In fact, on eight occasions, we put forth this very proposal, and it has been turned down. Just a few days ago, it was said by members of the Democratic leadership that this was nothing more than politics, that it was political gamesmanship. But fortunately, I think they have realized that people out there are angry and frustrated and looking for government to do something. So it is a great day.''
No date has been set on when the legislature would vote, but Cafero said it should be scheduled as soon as possible. With support from the Senate president pro tem, the House speaker and both majority leaders in the Democratic-controlled legislature, the chances of action by the General Assembly this year are virtually guaranteed.
Cafero conceded that the timing is important because this year is an election year for all 151 House seats and all 36 Senate seats.
"When we proposed this earlier in the session, we were told no, it's not coming up, it's political gamesmanship,'' Cafero said. "Now, 37 days later, it's an idea that they want to embrace.''
The average price of regular unleaded gasoline in Connecticut breached $4 a gallon last week. On Monday,
The Democratic plan calls for capping the 7.53 percent effective rate of the gross receipts tax until June 30, 2013, the end of the next fiscal year, at the wholesale price of $3 a gallon. On Monday, the wholesale price was $3.18 a gallon. As such, the savings at the current prices would be about one penny. But that savings would rise to 7.5 cents a gallon if the wholesale prices went to $4 a gallon.
Under the state's complicated, two-pronged tax system, the gross receipts tax is in addition to the flat, 25 cents-a-gallon tax on gasoline. Those taxes are in addition to the federal gasoline tax of 18.4 cents a gallon that has remained the same in recent years.
Senate Republican leader
In Massachusetts, the overall gasoline taxes are 23 cents a gallon, compared with about 50 cents a gallon in Connecticut, McKinney said. In Rhode Island, the overall gasoline taxes are 33 cents a gallon.
"Our tax is too high and unfair,'' McKinney said.
The savings could be more than $100 a year if a motorist drives about 13,000 miles annually, McKinney said.
Suzio, who has been pushing hard for capping the tax, said the plan should go beyond one-year relief..
"What's being proposed today is only half a step,'' Suzio said. "If this is introduced on the floor of the Senate, I will introduce an amendment to make it permanent. ... The folks in Connecticut need permanent relief, permanent recovery and permanent reform of our gas tax laws.''
In an interview, Suzio said, "They agreed to suspend tax gouging for a year. Their entire press conference was raging against gouging and price manipulation. … Who ever thought we'd be looking at Massachusetts and wishing that our taxes were like theirs? Every penny of the gross receipts tax is equal to $15 million'' in the state's coffers.
On Wednesday, Suzio will announce new ideas "to provide significant, immediate gas tax relief'' at a gasoline rally at the Legislative Office Building at 11 a.m. He said he would provide the details then.
"Since last May, I've been screaming about capping it, and it went nowhere,'' Suzio said, adding that a Cumberland Farms station in
As part of the proposal, the Democrats outlined a six-point plan that is also designed to stop price gouging by wholesalers. The bill would prevent both wholesalers and distributors from imposing the tax after the wholesale price reaches $3 a gallon.
The bill would also amend the state's profiteering statute to block price gouging through an automatic trigger based on extreme wholesale price increases, according to the Democratic plan.
The bill calls for giving the consumer protection commissioner the authority to impose fines up to $10,000 under the Connecticut Unfair Trade Practices Act, known as CUTPA, if wholesalers and distributors violate the profiteering laws.
In addition, the bill would extend all of the same provisions to home heating oil, which is not currently covered.
"The high price of gasoline threatens consumer confidence, burdens Connecticut families and endangers the fragile progress our economy has made here in Connecticut,'' said Senate Majority Leader