Governor Ned Lamont announced today his intention to suspend the state’s 25-cent gasoline tax through the end of June.
Lamont said he would also suspend the sales tax for a week during the month of April and would make bus service free throughout the state during that month.
According to Lamont, the cost of gasoline has increased about 75 cents per gallon since Ukraine was invaded at the end of February. The current average cost of gas in Connecticut is $4.47, compared to $3.62 a month ago, according to the American Automobile Association.
Lamont said that eliminating the gas tax would cost about $90 million, which the state can afford thanks to the recent high cost of gasoline, which has partially replenished the state’s Special Transportation Fund. Going beyond June 30, Lamont said, would violate the federal government’s rules for the spending of the federal coronavirus funds.
Lamont said there was “broad agreement” between his office and the Republican and Democratic legislative leadership about the proposals.
State Sen. Martin Looney, D-New Haven and State Sen. Bob Duff, D-Norwalk, said in a statement that they had a “productive conversation” with Lamont and the Republican legislative leaders.
“Later today we will discuss with our Senate Democratic caucus members the ideas of a gas tax holiday through June 30th, free bus service, and an additional sales tax holiday this spring. Moving forward we are hopeful to pass legislation to protect consumers within the next two weeks,” the Democratic leaders said.
Republican leaders said in a Monday press conference that they were in agreement with the governor’s proposals.
“I’m glad that the governor and the majority have been listening to what we have been talking about,” said State Sen. Kevin Kelly, R-Stratford. “I think this is a step forward to bringing much needed relief at the gas pump.”
“It’s important that the caucuses have come together and have agreed to target this gas tax,” said State Rep. Vincent Candelora, R-North Branford. “This proposal, I think, is going to be a very important measure to provide that relief to our residents.”
Lamont said the decision to suspend the sales tax was in response to the general inflation, which in February was recorded at 7.9 percent nationwide. Gasoline prices have increased 38 percent nationwide since February of last year.
“Right now with the incredibly high increase of inflation across the board, we wanted to give people a little bit of relief. We can give them a 6.35 percent relief,” said Lamont.
Lamont and the Republican legislators said that it was important to make sure that the gas tax reduction was passed onto the consumers rather than being held onto by the middleman.
“If anybody’s using this as a way to expand their profits, they’ll probably be hearing from the Attorney General,” said Lamont.
Kelly and Candelora said they had hoped the governor and the legislature would go even further with tax relief. According to Candelora, the government is able to provide up to $180 million in tax relief before July 1 without violating federal rules. The total cost of the sales tax and gas tax suspensions and the free bus service will equal about $100 million.
Lamont said he would like to see the gas tax suspension go into effect within a week. Candelora said he hoped to vote on the suspension next week, and that the suspension would go into effect no later than April 1st.