Piscopo Decries Rising Gas Tax (Op-Ed)
State laws continue to promote pro-tax, anti-growth policies that are hostile to taxpayers and businesses. Added taxes will hurt low income residents the most, and continue to squeeze the middle class.
Of concern to me is a major tax built into our State budget, the gross receipts tax on gasoline. Guaranteeing a yearly tax increase, the gross receipts tax is a hidden tax on gasoline that you pay above and beyond the state ($.25) and federal ($.184) per gallon taxes. This is a wholesale petroleum tax, which is collected when the gasoline arrives at the wholesaler. As the price of gas rises, so does the gross receipts tax.
As a tax on fuel, 100% of the revenue collected from the gross receipts tax should be allocated to transportation related purposes. Improvements to our roadways and bridges are necessary, and require millions of dollars in funding, which often times is bonded. Instead, the revenue is split, and the remainder of the revenue is put into the General Fund.
Last year, Republicans were able to stop the gross receipts tax increase and placed a one year cap on the tax. Democrats would not agree to permanently ban future hikes. As a result, the tax is set to go back into effect on July 1, 2013.
As a member of the Finance committee, I recently supported an amendment (S.B. 843) to permanently cap the gross receipts tax, thereby making the tax a set amount that does not increase further. Unfortunately, this amendment was voted down on a clear party line in committee by my Democrat colleagues.
I continue to support an effort to BLOCK THE HIKE TO THIS TAX. During budget discussions, the state legislature has the opportunity to act. If the legislature fails to take action, on July 1, this wholesale tax rate will increase from 7 percent per gallon to 8.1 percent per gallon, causing a 17% as tax hike.
For taxpayers already feeling the burden, this pain at the pump is another clear example of the state trying to balance the budget on the backs of the taxpayers. At a time when people need relief, this is NOT this answer.
Furthermore, this 17% increase in the petroleum gross receipts tax will bring in about $60 million at today’s gas prices. I believe that this $60 million is better left in the hands of the taxpayers as they continue to find ways to tighten their own family budgets.
As taxes continue to rise, business expansion and job opportunities are adversely affected. Businesses are absorbing these rising costs, and are forced to make the hard decision not to increase their payroll. With unemployment in this state higher than the national average, this is the wrong path to restoring prosperity in Connecticut and instead maintains our current economic stagnation.
In the proposed $21 billion budget, there are other areas where the $60 million in anticipated gross receipts gas tax revenue can be found:
– Eliminate the $116 million annual Earned Income Tax Credit program
– The State Employees Health Enhancement Plan, $102 million
– Use $90 million in state employee-inspired savings promised by governor
– Hard state government hiring freeze, $100 million
– Rainy Day Fund, $100 million
-Citizens’ Election Fund, $10 million
-Technology initiatives, $40 million
The above-listed potential resources are evidence that revenue options exist that could be allocated to pay the state debt. Rather than continuing to raise taxes on our residents, I am calling on the legislature and the Governor to commit to making the hard spending cuts they continue to tout, but have yet to make.
I will continue to fight these tax and bowering proposals that bring us in the wrong direction for recovery and reform. And I urge you, and your family and friends to contact your legislators and make your voices heard.
Please feel free to contact me about this or any legislative issue by calling my office 800-842-1423 or email john.piscopo@housegop.ct.gov.
Stay informed: www.cthousegop.com
Sincerely,
John Piscopo
State Representative, 76th District