With gasoline prices skyrocketing, the state Senate will vote Monday on a final budget agreement that avoids any increase in the state's gasoline tax this year.
Negotiators finished the last details after working through the weekend at the state Capitol, and they agreed to drop the three-cents-per-gallon increase that Democratic Gov. Dannel P. Malloy had proposed in mid-February.
Democrats in both the House of Representatives and Senate had balked at the gasoline tax increase at a time when gas prices have spiked higher every week and increased seemingly every day recently. Gasoline prices rose nationally during the month of April by 32 cents per gallon - essentially a penny daily.
Senate President Pro Tem Donald Williams told Capitol Watch on Sunday that dropping the gasoline tax increase was an important provision of the two-year, $40 billion budget.
While the gasoline tax has been dropped, the final budget package still includes increases in most of the state's major taxes - on income, corporations, estates, sales, cigarettes, and cigars. The sales tax will increase from the current 6 percent to 6.35 percent on retail items, and the so-called "luxury tax'' will be 7 percent on cars worth more than $50,000, yachts selling for more than $100,000, jewelry for more than $5,000, and clothing items and wedding gowns selling for more than $1,000. The package also includes the so-called Amazon tax on online sales, even though Amazon's affiliates in Connecticut say that the tax will backfire.
If everything goes as planned by the Democratic-controlled legislature, the budget will be ratified by both the Senate and the House of Representatives by late Tuesday, May 3, which is clearly the earliest budget in recent state history.
"Even in the years when we had surpluses, we never had a budget agreement move forward this early,'' Williams said.
When the Democratic-controlled legislature was clashing with Republican Gov. M. Jodi Rell, the budget was not finished one year until September - stretching out even longer than the epic battles that led to the creation of the state income tax in 1991.
While Malloy and Democrats are pleased that the budget is being finished early, House Republican leader Larry Cafero says it is being rammed through with lightning speed before the general public can rally enough support against the tax increases and spending.
"There just seems to be, on the part of this governor, an incredible rush to get this done,'' Cafero said. "I think most of it is let's get this done before people wake up and realize what we're doing.''
Cafero considers the process to be a rush-job.
"There's no doubt in my mind,'' Cafero said. "Are you kidding me? I think he's annoyed that it didn't get done this [past] week.''
While the 25-cents-per-gallon gasoline tax will not go up, the state will still receive more tax money in the coffers if gasoline prices continue climbing. The reason is that the state actually has a two-pronged gas tax. Besides the 25 cents per gallon levy, the state also collects a gross receipts tax that is pegged to the wholesale price of gasoline. As the wholesale price rises, motorists pay more to the state through the gross receipts tax - even though they might not know it. The gross receipts tax is not marked separately at the gas pump.
With gasoline prices at around $4.30 per gallon at some stations, the blocking of the 3 cents per gallon increase will be more of a psychological boost to consumers than a financial shot in the arm. For the average motorist driving 12,000 miles per year in a car that gets 20 miles per gallon, an extra 3 cents per gallon would have cost $18 per year.
While some legislators have voiced complaints about either the spending side or the tax side of the budget, they will be forced to vote this week on one unified budget in a single document.
In recent years, as many as five members of the Senate Democrats - Sen. Edward Meyer of Guilford, Joan Hartley of Waterbury, Bob Duff of Norwalk, Paul Doyle of Wethersfield, and Gayle Slossberg of Milford - have balked at certain aspects of the budget. So far, Meyer voted against the tax increases at the committee level in April, and Hartley voted against the spending increases in the budget-writing appropriations committee.
Williams declined to predict exactly how many votes he will have Monday in his 22-member caucus.
"We expect a strong majority,'' said Williams, who would not be calling for a vote if he did not believe that the budget would pass.
If there is an 18 to 18 tie in the 36-member Senate, Lt. Gov. Nancy Wyman would break the tie in favor of Malloy's budget.