Democrats Heard GOP Hovey’s

Call For Gas Tax Cap

State Representative DebraLee Hovey, who represents a voting district in southern Newtown, has will likely see an immediate adoption of a proposal that places a temporary cap one of the state’s two taxes on gasoline. Democrats in the state legislature March 28 approved measures Rep Hovey is supporting, aimed at lowering gas prices while protecting consumers from profiteering and price gouging by oil wholesalers.

The action, which awaits Gov. Dannel P. Malloy’s signature, caps the gross receipts tax on fuels when wholesale prices hit $3 a gallon. Considering the wholesale price at the port in New Haven is about $3.20 a gallon, this plan would reduce the current price of regular unleaded by 1.5 cents.

The proposal also includes a measure that will trigger price gouging investigations when wholesale prices increase by 15 percent or more within 90 days. In a press release March 23, Rep Hovey, a Republican, called on the General Assembly to take whatever steps were necessary to make a cap of the hidden “gross receipts” tax permanent.

Over the past six years Rep Hovey said she and her GOP colleagues have tried repeatedly to give residents relief at fuel pumps by proposing the cap, only to see majority party legislators reject or ignore those efforts no fewer than 17 times since May 2007.

But in the face of $4 a gallon costs at the pump, legislative Democrats have embraced the concept by proposing a yearlong cap, which is a good start said Rep Hovey.

She explained that the per-gallon tax total paid at the pump represents three separate taxes:

*The federal tax, 18.4 cents

*The fixed 25-cent state tax

*And the gross receipts tax levied as a percentage of the wholesale price combine for the state’s total gas tax burden.

The gross receipts tax rate is 7.53 percent, costing consumers roughly 23 cents per gallon — a figure that increases every time the price of gas rises. This provides a windfall to the state each time the price of gasoline spikes, increasing the pain to consumers, Rep Hovey said.

“I’ve spent a number of years calling for relief of the gas tax only to have the majority oppose it at every turn,” said Rep Hovey. “I welcome their change of heart on this important issue. We can’t control the fluctuating price of oil, and we can’t even control the federal taxes on gasoline, but on the state level we can most certainly control the excessive taxes we collect. We should be looking to reduce that burden permanently.”

After the bill was passed, Sen. Paul Doyle, D-Wethersfield, co-chairman of the General Law Committee said, “I think this is an important bill, but I think we all have to be clear that no one will see radical price decreases at the pump.”

Rep Hovey noted that working toward a permanent cap is essential because the temporary cap from majority legislators would expire in 2013 as an increase to the gross receipts tax is scheduled to kick-in.

Associated Press content was used in this report.