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Fixing Connecticut's gas tax rip-off

Published 07/02/2013 12:00 AM
Updated 07/01/2013 11:49 PM

On Monday Connecticut drivers were greeted with a gas pump increase of about 4 cents per gallon, a result of another hike in the wholesale fuel tax, which distributors pass on to consumers. Combined with the 25-cents-per-gallon retail tax, it means Connecticut drivers pay a gasoline tax of 49.6 cents on every gallon, third highest in the nation behind New York and California.

That level of taxation might be justifiable if it were paying for one of the best transportation systems in the nation. Instead a Connecticut Center for Economic Analysis report ranked Connecticut third lowest among states in spending on transportation.

This situation - high gas taxes and a low level of transportation investment - is the result of successive governors and legislatures tapping the gas-tax revenues to meet other needs. Connecticut has ended up with a high fuel tax and a middling transportation system, with crowded highways, lagging mass transit and underutilized ports. If the goal was to concoct a strategy discouraging economic growth, this would be a shrewd approach.

On June 28, 1983, the collapse of a 100-foot section of the Mianus River Bridge on Interstate 95 in Greenwich killed three people as their vehicles plunged into the chasm. It shocked the state into facing the reality it had to do something about its aging transportation infrastructure. The result was creation of a dedicated Transportation Fund, and the resulting $5.6 billion decade-long rebuild and repair program resulted in vast improvements in bridge and road safety.

But the urgency faded and for years Connecticut has underinvested in its transportation infrastructure. The shame is that the state had the ability to do so much.

In 2005 the administration of Republican Gov. M. Jodi Rell proposed, and the Democratic legislature adopted, plans for a series of increases in the wholesale tax to replace Metro North commuter railcars and fund highway improvements. Increases were set for every July from 2005 through 2008 and once more in 2013 (the tax hike that went into effect Monday).

Because the state bases the wholesale tax on a percentage of gas cost, skyrocketing fuel prices produced a revenue windfall far exceeding expectations, even after lawmakers blocked the 2008 increase.

Instead of using the newfound revenues to underwrite a major overhaul of the state's transportation system, the legislature between 2005 and 2013 chose to divert about $1.27 billion to non-transportation programs, the online news site Connecticut Mirror (www.ctmirror.org) reported Monday.

And the needs are great, including in this area widening Interstate 95 to three lanes, improving commuter rail service, and expanding New London's deep-water port, to name a few. In 2010 the state Department of Transportation identified $5.4 billion worth of major highway and bridge projects for which there is no funding source. In its report, The Mirror said more realistically the cost of unfunded but necessary projects probably stretches beyond $12.5 billion.

The failure to use the gas revenues wholly for transportation is a damaging breach of faith. This newspaper has argued that tolls might be a better source of revenue, but only if the state earmarks the money for transportation needs. Toll critics say they have no faith that will happen. Given the history, who can blame them?

Gov. Dannel P. Malloy says he recognizes the importance to economic development of improving the state's transportation infrastructure and agrees it is a mistake to divert gas tax revenues to other uses. The administration notes the budget he just signed into law shifts $181 million in wholesale fuel tax revenues back to transportation, a process, he says, of weaning other programs from dependency on the tax.

Yet, The Mirror points out, the transportation system still loses $60 million in the new fiscal year to other programs, an amount equal to the revenue Monday's gas tax increase is expected to generate.

During a recent radio appearance, Gov. Malloy said by the fiscal year beginning July 1, 2015 - coincidentally the first fiscal year after the November 2014 gubernatorial election - all gas taxes will start going to transportation.

Sounds great, but skepticism about that assurance is in order.

Town News

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