Democrats in the state legislature have been on defense since a Republican press conference last Thursday that announced some grocery items will now be subject to a 7.35 percent sales tax. The budget included a 1 percent sales tax increase for restaurants but included pre-prepared foods sold in grocery stores ...
Gov. Malloy calls for tolls, increasing gas tax and a tire tax to fund transportation
Gov. Dannel Malloy called on the state legislature to approve electronic tolls for Connecticut’s highways, a 7 cent increase in the gasoline tax and a three dollar tax on tires in an effort to increase revenue to the state’s Special Transportation Fund.
The governor said Connecticut needs a “world class transportation system” in order to compete with other states and that infrastructure problems are the “number one concern” he hears from businesses considering relocating into Connecticut.
“We have failed to build that world class system,” Malloy said at a press conference earlier today. “We are at a distinct disadvantage with competing states.”
The increase to the gas tax would be phased in over 4 years, while statewide electronic tolling would begin in 2023, according to the governor’s plan.
The electronic tolls would not be at the state borders but would be in locations throughout the state. The governor said it is up to the legislature to determine the location and number of electronic tolling stations.
The governor blamed the shortfall in the Special Transportation Fund on the decrease in the state’s gasoline tax from 39 cents to 25 cents in 1997.
However, the governor also said the gasoline tax is a dying source of revenue, asserting that half the cars on the road will be electric in the next 20 years and tolls will be needed to fund state infrastructure spending in the future.
Although the state’s gas tax has consistently increased in revenue year over year, debt service and operating expenses for the Special Transportation Fund are growing faster than revenue.
Earlier in the month, Malloy announced the cancellation or delay of $4.3 billion in state-funded projects, which Department of Transportation Commissioner James Redeker called “one of the worst days of my life.”
According to a report released by the governor, his proposals “will restore immediate stability to the STF, allowing the state to reinstate the $4.3 billion in cancelled projects while preventing drastic rail and bus fare increases.”
Expenses for the Special Transportation Fund are expected to increase half a billion dollars over the next five years due to surging debt service and operating costs.
However, not everyone was happy with the idea of paying more at the pump and on the roads.
In a statement released shortly after Malloy’s press conference, Yankee Institute President Carol Platt Liebau said these measures would only increase the financial burden on Connecticut families.
“After enduring two of the largest tax increases in state history, it is irresponsible for our government to take even more of our hard-earned money,” Liebau said. “Especially without offering even a single reform of the out-of-control spending habits that have driven our once-prosperous economy into this ditch.”
Early in the legislative session, word spread that the Gov. Ned Lamont administration was considering a possible sales tax for grocery items. The subsequent outcry from groups across the political divide buried the idea, seemingly forever. But, according to House and Senate Republicans, certain groceries are going to be taxed ...