House Republican Press Release

August 19, 2008

Press Office: 860-240-8700

Rep. Hamzy:  Special Legislative Session Should Vote to Cap Gross Receipts Tax on Gasoline

Use Special Transportation Fund Balance to Help Pay for Rising Costs of Transportation Projects

When Friday’s special legislative session on heating oil costs convenes, lawmakers should act on several proposals Republican legislators will offer, including a cap on the wholesale price of gasoline taxed by the state and an increase in the electricity sales tax exemption for businesses, state Representative William A. Hamzy said today.

The proposals are part of a six-point plan unveiled by House and Senate Republicans at a news conference today at the state capitol. The proposals will be offered this Friday when the legislature meets in special session to act on fuel assistance programs, said Representative Hamzy, R-78^th District.

The Republican proposals would cap the wholesale price of gasoline subject to the state’s Gross Receipts Tax (GRT) at $3.42 a gallon to prevent built-in increases in the tax when the price of gasoline goes up; increase the electricity sales tax exemption for businesses from $150 to $500 per month, and use the fund balance in the state’s Special Transportation Fund to offset the rising cost of transportation projects, Representative Hamzy said.

A report published by the United States Energy Information System shows the GRT forces Connecticut residents to pay significantly more at the pump. According to the report, Connecticut residents pay 69.1 cents per gallon in total taxes, which is 10 cents higher than New York residents pay, and 20 cents more than Rhode Island or Massachusetts residents pay.

"New York, Massachusetts and Rhode Island citizens have lower gas taxes and pay far less for gasoline than Bristol and Plymouth residents pay,” Representative Hamzy said. “Our proposed cap on the wholesale price of gasoline subject to the Gross Receipts tax will lower gas prices and bring them more in line with gas taxes in nearby states.”

“If Democratic legislative leaders refuse to allow a vote on our Gross Receipts Tax relief proposal, Connecticut’s burdensome gas taxes will continue to stretch middle class family budgets to the breaking point, weaken the business climate, and mean fewer jobs,” Representative Hamzy said.

“With several transportation projects on hold because of rising construction costs, our proposal to use  unexpended transportation fund balances to offset those increases is a common sense solution that will help get them back on track,” Representative Hamzy said.

The Republican plan would:

· Cap the wholesale price of gasoline at $3.42 per gallon to prevent built-in gas tax increases;

· Increase the electricity sales tax exemption for businesses from $150 to $500 per month;

· Fill the Special Transportation Fund deficit of $28 million by using the current Transportation Fund Balance and direct nearly $100 million of the fund to projects that have stalled due to rising construction costs.

· Allow a family of four earning up $94,000 a year to qualify for  Operation Fuel assistance;

· Increase by $5 million the Conservation Load Management Account that rewards conservation efforts;

Provide $3 million to help struggling families pay their electric bills;