Tuesday, April 10, 2007

Gas prices...

They're going up again.

And in response to that, Gov. M. Jodi Rell is again calling for a cap on the gross receipts tax when the wholesale price hits $1.75 per gallon or higher. The gross receipts tax is imposed on the first sale of petroleum products in the state, and as such, becomes part of the cost retail stations have to pay that then gets passed on to us at the pumps. The current rate is 6.72 percent.

That tax funds the state's infrastructure improvements - bridges, highways and mass transit.

The wholesale price of a gallon of gas these days - stay tuned it will change - is in the neighborhood of $2.12. That makes the gross receipts tax right now 14.3-cents per gallon. Under Rell's proposal, that tax would be capped at 11.7 cents per gallon, reducing the price at the pump (today) by 2.6-cents per gallon.

This tax rate is scheduled to go up on July 1, from the current 6.72 percent to 7.53 percent. Based on that, the same gallon of gasoline would be taxed at 16.1 cents.

Gene Guilford, executive director of the Independent Petroleum Dealers here in Connecticut, doesn't believe a 2 or 3 cent reduction at the pump is that big of a break for consumers. He also notes that there is also an additional 25-cent per gallon state excise tax imposed in addition to the gross receipts tax.

Guilford thinks more focus should be directed towards returning tolls to Connecticut's major highways.

"If tolls were restored," he said Monday, "potentially Connecticut's motor fuel tax rates could be reduced more along the lines of New Jersey, or about 10-cents per gallon - saving about 29 cents per gallon off gasoline costs and shifting more of the highway, bridge and mass transit expenses onto tolls."

So what do you think?


Blogger Bill Jenkins said...

I think putting tolls back on the highways is probably one of the stupidest things I've ever heard especially when trying to rationalize it by saying it will reduce gas prices.

12:06 PM  

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