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Drivers Resist Gas Tax Proposal

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(File: Miguel Villagran/Getty Images News)

(File: Miguel Villagran/Getty Images News)

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SUSAN HAIGH, Associated Press Writer

NEWINGTON, Conn. (AP) _ Gov. Dannel P. Malloy often defends his proposal to raise Connecticut’s gas tax amid skyrocketing prices at the pumps by arguing the extra money is needed to fix the state’s roads and bridges.

But the idea of tacking on another three cents to the state’s 25-cent-per-gallon excise tax isn’t sitting well with members of the Democratic governor’s own party, or with many motorists.

“This is not the time, that’s for sure,” said Fred Smith of Columbia, after spending more than $28 to buy just seven gallons of gasoline for his pick-up truck last week. “The roads aren’t going to get any better by hiking the gas three cents. … There are so many people on unemployment right now. What are you going to do?”

But Gary Goldfine of Newington was unfazed by Malloy’s proposed tax increase.

“Honestly, three cents compared to $4.02 is not going to make much of a difference in the pocket,” he said. “If it’s going to help our roads and everything, sure, why not? Cars are what use the roads, so that’s where the taxes should come from.”
The three-cent increase in the gasoline tax is tucked into the revenue package that was passed earlier this month by the General Assembly’s Finance Revenue and Bonding Committee.

The proposed $2.6 billion in tax increases over two years are part of a budget agreement reached between Malloy and Democratic legislative leaders this month and could come up for a vote in the full House of Representatives and Senate early next week.

Meanwhile, some lawmakers are looking into whether they can scrap the proposed three-cent tax hike and instead use some revenue from a second tax on gasoline, the gross receipts tax, to help pay for infrastructure improvements. The state’s gross receipts tax fluctuates as the wholesale price of gas changes. So as prices go up, so do tax revenues.

“It’s a hidden windfall tax,” said House Minority Leader Lawrence Cafero, R-Norwalk, whose caucus has proposed capping the tax. “As the price of gas goes up, we secretly profit from that.”

But for years, the state has spent much of the revenue from the gross receipts tax on general government expenses, not transportation.

Senate President Donald Williams Jr., D-Brooklyn, said legislators expect to receive up-to-date figures on Monday on how much money that second tax is generating, and might try to dedicate more of those revenues to help cover road and bridge repairs.

Michael Fox, executive director of the Gasoline and Automotive Service Dealers of America, said it’s time for the General Assembly to finally use the revenue generated from the gross receipts tax on highway improvements. Fox has unsuccessfully pushed legislation seven straight years that would specifically earmark that tax revenue for road and bridge improvements, as well as commercial underground storage tank clean-up work.

Fox estimates state lawmakers funneled about $1.7 billion of the $2 billion generated from the gross receipts tax into the general fund between 2001 and 2010.

“We do not have a revenue problem, we have a spending problem _ that we don’t spend it on its intended purpose,” he said.

Fox strongly opposes Malloy’s proposed three-cent-per-gallon increase in the excise tax on gas, saying it will further drive down demand.

He said gas station dealers are already suffering financially because of the high gas prices as people cut back on their gas consumption. Volume has dropped 30 percent over January, February, March and April compared to last year, Fox said. And he said retail sales at the stations, such as soda and cigarettes, have dropped 50 percent. Fox said in recent days five dealers have told him they were going out of business.

Rep. Bruce “Zeke” Zalaski, D-Southington, is among a group of House Democrats working to stop the tax hike. He said he hears the complaints about high gas prices and Malloy’s proposed tax increase when he visits his local gas station.

“We shouldn’t be taxing more, especially gas. It’s brutal,” he said. “I’m as upset as they are. … When I go to the gas station, it hurts me as much as anybody else to fill up my gas tank.”

     (Copyright 2011 by The Associated Press.  All Rights Reserved.)

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