HARTFORD, Connecticut — Connecticut Governor Ned Lamont has signed an emergency bipartisan bill that will temporarily suspend the state’s 25-cent-per-gallon excise tax on gasoline in an effort to ease pain at the pump for motorists.
The gas tax will be suspended from April 1 to June 30.
The House of Representatives voted 143-0 in favor of the emergency bill on Wednesday night. Hours later, the Senate passed the proposal by a vote of 33-0. Lamont then signed the bill into law on Thursday.
The legislation also establishes a second sales-tax-free week on clothing and footwear valued under $100 per item, beginning April 10. That’s in addition to the one typically held in August for back-to-school shoppers. Furthermore, the bill provides free bus service between now and June 30.
“These three things today, I believe, will help with the affordability crisis that’s happening here in the state and all across Connecticut,” said Rep. Sean Scanlon, D-Guilford, co-chair of the General Assembly’s Finance Revenue and Bonding Committee.
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State legislators and Lamont, who are all facing reelection in November, have been under pressure to blunt the effects of rising inflation and the state’s high gasoline prices.
As of Friday, the state’s average price for a gallon of regular unleaded gasoline was $4.37, according to AAA. While that was down 11 cents from the prior week, it was still up 71 cents per gallon compared to February and $1.47 compared to this time last year.
Connecticut is the latest state to suspend its gas taxes to give drivers a break from high prices, the result of pandemic-induced inflation and Russia’s invasion of Ukraine. Governors in Georgia and Maryland have enacted temporary gas tax freezes and other state legislators are considering similar moves.
Connecticut has two taxes that apply to motor fuels. They include the 25-cent-per-gallon motor vehicle fuels tax, typically referred to as the state’s gas tax, and the fluctuating petroleum products gross earnings tax.
Some Republican lawmakers questioned why more wasn’t being done, including scrapping a planned highway usage tax on large commercial vehicles that’s supposed to take effect in 2023.
In the Senate, Democratic Sen. Cathy Osten of Sprague, the co-chair of the budget-writing committee, agreed with some of the GOP’s complaints and said lawmakers should exempt farmers from the highway use tax – an issue that could be revisited later during the legislative session.
But House Speaker Matt Ritter, D-Hartford, called the gas tax holiday a “down payment” on other anticipated tax cuts the General Assembly is expected to enact. Republicans agreed. Senate Minority Leader Kevin Kelly of Stratford called the gas tax holiday “a start, a thankful start.” But he said it’s “by no means an end.”
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Ritter stressed that lawmakers are limited in how much of the state’s transportation revenues they can use to lower the fuel taxes because of debt-to-revenue ratios that are required for issuing revenue bonds for transportation projects.
Some Republicans also echoed concerns from the Connecticut Energy Marketers Association about small gas retailers, who pre-pay the excise tax on gas, and may not sell all of the fuel in their tanks by April 1. Retailers that don’t pass along the 25-cent-per-gallon savings can face various penalties.
“I know it’s different in a larger community, in a city, because tanks are turned over on a daily basis. But boy, when you get out in the sticks, it doesn’t happen like that,” said Rep. Jay Case, R-Winsted, who said it takes about two weeks for gas stations in rural communities to use up a tank of fuel.
If a problem develops, Scanlon expressed a willingness to make sure such small retailers are not harmed.
Connecticut U.S. Sen. Richard Blumenthal, a Democrat, praised state lawmakers for suspending the gas tax temporarily, saying “Congress should follow Connecticut’s lead and provide additional support to families across the country by taking immediate action to suspend the federal gas tax.”
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