黑料吃瓜网鈥檚 trucking industry will face a small tax hike next month when the state tax on diesel fuel rises slightly more than 3 cents per gallon.
Truckers dodged a much larger increase over the past year when legislators and Gov. Ned Lamont froze the tax, blocking a projected hike of .
Still, the latest increase, coupled with a new highway mileage tax that began last year and a nine-cent diesel hike in 2022, has truckers and others calling for reforms.
鈥淭hankfully, it鈥檚 only going up a little bit,鈥� said Department of Revenue Services Commissioner Mark Boughton, who recently notified the legislature the per-gallon tax on diesel fuel would climb 3.2 cents on July 1, . That鈥檚 a 6.5% increase.
Boughton noted the diesel tax has been adjusted annually each summer since 2007 based on that relies heavily on wholesale diesel prices from the prior 12 months. The formula has generated several tax cuts over the past 17 years, he added.
But the president of the Motor Transport Association of 黑料吃瓜网, John Blair, said the new tax hike is the latest in a series of financial burdens recently placed on his group, which represents more than 500 trucking and trucking-related businesses.
Though the diesel rate was frozen last July, it had risen 9 cents per gallon in July 2022.
Truckers also were frustrated in January 2023 when the state launched a new highway mileage tax on many large commercial trucks, excluding those transporting dairy products.
The diesel tax and highway mileage fee each represent a relatively modest share of the state budget鈥檚 Special Transportation Fund, which covers operating costs for the Departments of Transportation and Motor Vehicles and debt payments on bonding for highway, bridge and rail projects.
Final totals for the current fiscal year, which closes June 30, weren鈥檛 available this week, but Boughton said the diesel tax collected about $133.5 million in 2022-23, when the rate also was 49.2 cents per gallon. Those collections represented 7% of total and about 6% in the current year.
The highway mileage tax, which ranges from depending on a truck鈥檚 weight, will collect , according to Gov. Ned Lamont鈥檚 budget office. It represents less than 3% of the STF.
Further complicating matters, the transportation fund has generated huge surpluses in recent years.
The fund finished with a $157 million or 9% surplus two years ago, according to reports from . That鈥檚 despite a gasoline tax holiday that put hundreds of millions of dollars back in motorists鈥� pockets.
Last fiscal year saw a $284 million surplus, equal to 15.5% of the transportation fund. And the fund will close this fiscal year on June 30 up $283 million or 13%.
Transportation tax reform ideas abound
Both Blair鈥檚 group and fuel distributors say the variable diesel tax rate should be replaced with a fixed amount of pennies per gallon. This would be similar, they say, to the state鈥檚 retail gasoline tax, which has been fixed annually at 25 cents per gallon since July 2000.
鈥淭he public鈥檚 being overly taxed when it comes to these transportation-related taxes,鈥� said Chris Herb, president of the 黑料吃瓜网 Energy Marketers Association. 鈥淎ll of this is contributing to excessive funds that are being squirreled away.鈥�
鈥淎t the end of the day, if we could come up with something predictable, that鈥檚 what鈥檚 important to us,鈥� Blair said.
Both Herb and Blair also said the recent increases in trucking expenses have only exacerbated inflationary problems.
The Consumer Price Index hit a 40-year high in the summer of 2022 when it topped 9%. And though inflation rates have dropped since, that shoppers still are reeling from a stiff increase in the base price of groceries, department store goods and other items delivered by truck.
鈥淐onsumers are already at their wits鈥� end,鈥� Blair added.
Minority Republicans in the state House and Senate have been pushing annually for repeal of the highway mileage tax. Rep. Holly Cheeseman of East Lyme, ranking House Republican on the tax-writing Finance, Revenue and Bonding Committee, predicted recently the GOP won鈥檛 relent on its push for repeal any time soon.
鈥淎ny tax we pass onto the truckers, that鈥檚 a tax they will pass onto our residents,鈥� Cheeseman said. 鈥淎nd our residents deserve relief.鈥�
Lamont has been adamant the highway use tax needs to stay, arguing that large trucks do the most damage to 黑料吃瓜网鈥檚 aging, crowded highways. But Boughton said the Executive Branch hasn鈥檛 taken a stand against a flat diesel tax.
鈥淭he administration has always been open to other thoughts and ideas,鈥� he said.
But Lamont and his fellow Democrats in the legislature鈥檚 majority have been wary of weakening STF revenues too much, though, despite the large surpluses in recent years.
If the Department of Transportation can launch more construction projects 鈥� thereby triggering the need for more transportation borrowing 鈥� the STF surplus next fiscal year would be just 4%, according to the governor鈥檚 budget office. And by 2025-26, the STF would run a very modest $8 million deficit, equal to roughly one third of 1%.
黑料吃瓜网鈥檚 construction industry and trades say the state鈥檚 transportation infrastructure needs even larger investments than the administration is aiming for to overcome decades of neglect.
And labor unions say the DOT is woefully lacking in engineers, planners and the other professionals needed to launch more projects annually.
Transportation Commissioner Garrett Eucalitto, who inherited that challenge when Lamont tapped him to run the DOT a little more than a year ago, has said that he鈥檚 aggressively trying to recruit more engineers and other professionals to bolster the agency.
Rep. Maria Horn, D-Salisbury, co-chairwoman of the finance committee, also said she鈥檚 willing to explore a flat diesel tax. But Horn also said legislators are determined to see more transportation upgrades underway. And even if the diesel tax is decoupled from a formula that makes annual adjustments, that doesn鈥檛 mean officials might never need to increase it in the future.
鈥淣othing stays flat in life,鈥� she said. 鈥淭he STF surplus is not long for this world.鈥�
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