State legislature passes gas tax cap

A bill to cap the state’s tax on gasoline has bipartisan support from lawmakers in Hartford.
A bill to cap the state’s tax on gasoline has bipartisan support from lawmakers in Hartford. Photo by Zoe Gorman.

In response to skyrocketing prices at gas stations statewide, both chambers of the Connecticut legislature voted unanimously on Wednesday in favor of a bill to cap the state’s tax on gasoline.

The approved bill, which will cap the gross receipts tax on gas at the cost of $3 per gallon wholesale, has been sent to Gov. Dannel Malloy for his signature. Despite some Republican attempts to extend the duration of the cap and push for a lowered tax percentage rather than a set cost per gallon, the state House of Representatives and Senate both passed the bill unanimously. The bill will also grant extra authority to the commissioner of the state’s Department of Consumer Protection and the state attorney general to fine oil corporations for suspected profiteering and price-gouging activities.

“Citizens across the state are struggling to make their ends meet because the gas prices rose by 47 cents over the last 90 days,” said Adam Joseph, a spokesman for the Senate Democrats. “[The legislature] thought that it would be of best interest for all to give some relief now, as… gas is something that affects everyone, especially the moderate-income families.”

The bill passed on Wednesday does not alter the percentage at which the gross receipts tax is levied. This percentage, which is currently 7.53 percent, is scheduled to rise to 8.81 percent on July 1, 2013, as prescribed by lawmakers seven years ago. The gas tax cap passed Wednesday is scheduled to end on that date.

Legislators said they considered the second portion of the bill — which empowers the commissioner of the Department of Consumer Protection and the state attorney general to monitor profiteering and price-gouging more closely — to be equally essential as capping the gasoline tax.

State Sen. Scott Frantz (R-Greenwich) said the new bill expands jurisdiction of the Connecticut Unfair Trade Practices Act, enabling the commissioner of the Department of Consumer Protection and the state attorney general to levy a fine of up to $10,000 on companies found to be engaging in illegal pricing methods. The department and the attorney general will scrutinize oil price trends to detect such behavior and ensure that companies stop charging inflated prices to expand their profit margins.

“We need to hold accountable those people who are not being held accountable now,” State Senate Majority Leader Martin Looney (D-New Haven) said. “The measure to protect consumers against price-gouging and profiteering is just as important as the cap itself.”

The legislature moved quickly to pass this bill, which was drafted last Wednesday. Frantz said pressure from constituents to pass the gas tax prompted a sense of urgency among legislators to pass the bill before the upcoming election season. In light of this urgency, the bill was designated as an “emergency-certified” bill and was sent directly to Malloy, who has pledged to sign it.

“There was a tremendous pressure from the constituents in my districts to do something soon, because high taxes eventually drive away business and discourage commerce,” Frantz said.

Had the gas tax cap been in effect on Wednesday, consumers in New Haven would have saved 1.7 cents per gallon on average, according to the Hartford Courant.

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