Gov. Lamont pushes gas tax amid tepid response from Connecticut lawmakers

Gov. Ned Lamont continues to push for a gas tax holiday, even though the proposal appears to have little momentum in the legislature.  

Lamont (D-Connecticut) first floated the idea during a press conference on March 10, saying it could help drivers facing rising gas prices amid the ongoing war in Iran.  

He told reporters at the Capitol on Thursday that he remains keen on the idea.  

“I’ve got 500 million (dollars) I can help people with, and I say sooner rather than later,” Lamont said.  

A holiday would pause the 25-cent-per-gallon tax on gasoline and the 49-cent-per-gallon tax on diesel.  

The average gas price in Connecticut on Thursday was $3.74, according to AAA, up from $3 per gallon a year ago.  

Lawmakers were receptive to the idea when it was first floated, but on Thursday, they said it was part of broader budget talks.  

“We’ll see how that works out in the budget,” Sen. Bob Duff (D-Majority Leader) said. “We’ll see how that works in the next few weeks.”  

Duff and his Senate Democratic colleagues have proposed a package that includes more sales tax exemptions, a higher property tax credit, and additional tax breaks for renters and low-income families.  

Senate Republicans made a similar pitch in a letter to Lamont on Wednesday, using the proposal as an invitation to talk about their call to use $1.6 billion in budget surplus funds to pay for tax cuts.  

The estimated average tax cuts of $1,500 per person match what Sen. Ryan Fazio (R-Greenwich) has proposed on the campaign trail.  

“It is possible, and not very difficult, to pay for tax relief in the long run if you reduce the growth of spending in the state budget,” Fazio said.  

Senate Republicans have suggested budget cuts in future years could help make their tax cut permanent.  

Lamont on Thursday reiterated his desire for a vote on the gas tax soon. He noted the House and Senate are set to vote next week on some judicial nominations.  

“So there’s certainly a way to vote on it if the leaders want to vote on it,” Lamont said.  

Lamont’s budget proposal includes setting aside $500 million in surplus funds to offer a one-time $200 tax rebate to most people, but he has since suggested the state could draw from that same fund to offset revenue lost by a gas tax holiday.  

He repeated his concerns Thursday about other tax relief proposals, mainly those he questions the sustainability of. 

The state is looking at a $1.6 billion surplus this year in tax revenues from certain unpredictable streams, including income tax from investors.  

A volatility cap limits how much the state can spend from those streams, leading to this year’s surplus. Unspent money goes into the Rainy Day Fund and toward pension debt. 

Senate Democrats and Republicans have both targeted that same surplus to pay for their tax relief plans.  

House Democrats, meanwhile, suggested the state could use some of Lamont’s proposed $500 million pool to increase education aid.  

“Everybody says I want something structural and long-term,” Lamont said Thursday. “That means structural deficits that are long-term. I don’t want that to happen.”  

The state is in the middle of a two-year budget, but the legislature typically makes changes to that second year.  

The legislature’s Finance, Revenue and Bonding Committee has until April 1 to present and propose tax changes, while the Appropriations Committee’s deadline to approve a spending plan is the following day.  

If lawmakers choose to present a plan that differs from Lamont’s, the two sides will likely negotiate a compromise before the legislature votes.  

Those talks typically go until late in the session, which ends May 6 this year. If a gas tax holiday is part of the budget plan, it may not take effect until late spring or early summer.