Connecticut Local Politics

The most important news of the day: the Journal-Inquirer finally redesigned their website! Hooray! I approve.

But in somewhat less exciting news, we may face another hike in the gas tax this year, if the slumping economy drives enough revenue away:

As Connecticut’s gasoline prices approach $3.40 per gallon, more state lawmakers are questioning whether to go ahead with another fuel tax hike this July — the fourth since mid-2005.

But while momentum appears to be building to cancel that increase, that momentum could turn in the face of a more powerful fiscal issue — the state is seeing more and more of its revenue sources stagnate as Connecticut’s economy does the same.

Well, I guess there have been a lot of transportation projects lately… right? So this money is at least going to fund needed upgrades to our roads, highways, rail lines and airports…?

But what’s not often mentioned at the Capitol is that the state actually takes a bigger chunk of the wholesale fuel tax revenue to fund regular government programs than it transfers into the highway system.

For the past six years, the state has used more than $100 million raised by taxing gasoline and other fuels to support general government programs. (Phaneuf)

Oh.

And while no one is talking an increase yet (at least not openly), it looks like declining revenue sources may force the state to dip back into the gas tax. The surplus forecasts, which used to be rosy, are now under $200 million and dropping. If things keep going like this, the surplus may turn to a deficit before long. And then what? How much can a tax on gas realistically pay for?

Source
Phaneuf, Keith. “Slumping revenue may drive yet another gas tax hike.” Journal-Inquirer 21 March, 2008.