Bolinsky Calls to Eliminate Automatic July 1 Gas Tax Hike

NEWTOWN – State Rep. Mitch Bolinsky (R-106) today challenged lawmakers to block an automatic 16-percent gas tax hike, scheduled to take effect on July 1, 2013. The wholesale gross receipts tax on petroleum is scheduled to go from 7 percent per gallon to 8.1 percent and, with Newtown residents paying some of the highest gas prices in the state.

“We need to stop this gas tax hike on Newtown commuters who already pay 15 to 20-cents per gallon more than consumers in towns elsewhere in the state and upwards of 30-cents per gallon more than nearby and bordering states. What we need now is the will to give taxpayers and drivers a break – not another burdensome tax increase! The more we tax, the more we hinder economic development. Commerce suffers because businesses have to pay these taxes too.’’

“The larger issue for us is: How many times can we go back to the well, levying new taxes or increasing existing taxes? Will we ever actually sunset one of these “temporary taxes”? Fundamentally, does Connecticut really need the additional revenue?”, asked Rep. Bolinsky. “One of the planks of the platform on which I was elected in 2012 was the assertion that Connecticut does not have a revenue problem; it has a spending addiction problem. The latest proposed state budget is evidence that Hartford is out of touch with the people who actually pay the bills, our taxpayers. When the state needs to rein in spending, how can we accept a proposed 9% increase in state spending?”

The gross receipts tax is the most onerous of taxes. As the price of gasoline increases, the tax also goes up because it is leveraged as a percentage on each gallon of gas sold. Since 2005, motorists have paid $450 million more in gross receipts tax increases.

Gross Receipts Tax revenue goes into the Special Transportation Fund (STF) which is the chief funding source for virtually all transportation operating and capital expenditures in Connecticut. The fund was established in 1983, following the collapse of the Mianus River Bridge on the Connecticut Turnpike (I-95), to provide a dedicated revenue stream for transportation infrastructure projects and programs.

The gross receipts gas tax has been hiked periodically for years. Originally levied as a 1 percent tax on the wholesale price of gasoline and intended to provide tank owners with insurance in accordance with federal law, the tax increases to 8.1 percent on July 1, most of which drops into the state’s coffers.

As state finances have fallen into deficit, the STF has become more and more vulnerable to raiding. Approximately $70 million was taken from special transportation fund in 2012 and put into the general fund, and now the governor has proposed to take another $75 million next fiscal year.

“Unfortunately, state government has used the hidden tax at the pump as its personal piggy bank to fund new government programs,’’ Bolinsky said. “It’s time to start living within our means.”