As Connecticut fuel suppliers and trucking companies braced this week for a state diesel tax adjustment that is expected to take effect next month, Republicans have redoubled their calls to avert a increase which they believe would exacerbate inflation.
The state passed an annual diesel fuel tax adjustment in 2007. The change is determined by a formula based on the wholesale price of diesel fuel. Currently, the tax sits at 40.1 cents per gallon and while the Tax Services Department did not quantify the increase as of Wednesday, it is expected to rise nearly 10 cents per gallon on July 1.
Republican gubernatorial candidate Bob Stefanowski held a press conference Wednesday at Meriden-based fuel supplier Tuxis Ohr to call for a handful of tax-cutting policies, including a suspension of the fuel tax. state diesel until the end of 2022.
Lawmakers suspended the state’s 25-cent-per-gallon excise tax on gasoline through a bipartisan bill in April. As part of the state budget, Democrats extended the holiday through December. However, they refused to include the diesel fuel tax. Stefanowski said the relief didn’t go far enough.
“It’s good but we shouldn’t take a lap of honour. No one inside this building right now,” Stefanowski said, gesturing to the fuel supplier’s office, “is taking a victory lap because at over $6 for the price of diesel, the governor has cut [gas prices] by a quarter.
At an unrelated event later in the day, Lamont told reporters that if given the opportunity to pass more tax cuts, he would prioritize additional property tax cuts over reduction of the diesel tax.
“You know the diesel tax, let’s say half of it is paid by out-of-state tractor-trailer trucks, many of which don’t stop in the state they keep going through,” Lamont said. . “I like to do tax cuts that really focus on middle class people here in our state.”
At the Stefanowski event, Katie Childs, vice president of Tuxis Ohr, said she sold 14 million gallons of diesel to customers in Connecticut. She argued that the rising cost of diesel as well as the implementation next year of a new mileage tax on large trucks would contribute to higher consumer goods costs.
“We have already done everything we can to absorb the inflationary expenses so that all these new taxes that come in are passed on 100% [to consumers]”, Childs said. “People who buy our diesel fuel incur the same costs no matter what they deliver.”
State law requires the Department of Tax Services to announce the new rate by June 15. A spokesperson for the agency did not return a call for comment on Tuesday or Wednesday.
However, Rep. Sean Scanlon, a Guilford Democrat who co-chairs the Legislature’s tax drafting committee, said Wednesday he expected the increase to be about 9 cents a gallon. Scanlon said legislative Democrats are discussing how to further ease the pain at the pump, but have no immediate plans to suspend the diesel tax until July.
“These decisions cannot be made in a vacuum. We have to strategically look at what is possible and what is the long-term impact of doing something,” Scanlon said. “We finally have the [Special Transportation Fund] to solvency and a good place. If we are going to use some of it to deal with this, we should think long and hard about it.
In a separate press conference on Tuesday, Legislative Republicans proposed another round of tax cuts, including extending the current gasoline tax exemption to diesel fuel. At this event, Joe Sculley, president of the Motor Transport Association of Connecticut, argued that the rising cost of diesel would increase the cost of all goods transported by truckers.
“Their customers are grocery stores, gas stations and clothing stores, so your food is going to cost more, your gas is going to cost more, and your clothes are going to cost more,” Sculley said.
Scanlon said he struggled to accept the argument that Connecticut’s policies could have a significant impact on inflation that is being felt across the country.
“Look, the whole country is going through this. These big companies aren’t going to cut costs here in Connecticut just because we’re doing something that no other state is doing,” Scanlon said. “It’s a national issue, but if we can give Connecticut drivers a break like we did on the gas tax side, I think that will help. We just need to determine if it’s responsible or possible.
Asked on Wednesday whether it was fair to blame Lamont for the inflation that has also affected countries in Europe, Stefanowski said Lamont’s policies have not helped matters here.
“You talk to a mom or dad in Connecticut, they don’t really care if it’s Governor Lamont’s fault or President Biden’s fault. Governor Lamont runs this state,” Stefanowski said. “He’s in charge of the economy of this state and he needs to be held accountable.”
Lamont argued that Connecticut residents were on the verge of a tax break due to the recently passed state budget.
“I think right now you’re going to have a big tax cut in people’s pockets over the next two to three months,” Lamont said. “I think it’s going to be $1,000 for most people and it will make a real difference now, not at the end of the year.”