On March 24, Connecticut Governor Ned Lamont announced new legislation that will suspend the tax on gasoline from April 1 to June 30, 2022. The legislation also made all public buses fare-free and included a one-week suspension of sales tax, lasting from April 10 to 16, on clothing and footwear under $100. This action was taken in response to the rapidly increasing price of gasoline in the state, throughout the U.S., and across the globe as a result of the ongoing conflict in Ukraine.
Prior to the events in Ukraine, gas prices in the U.S. were already skyrocketing, threatening both economic growth and the ability to afford travel. In 2021, the national average gas price jumped 39%, from $2.17 per gallon to $3.01 per gallon. Now, in 2022, the national average is at a record-breaking high of $4.17 per gallon, nearly twice as much as the prices in 2020. In 2020, Connecticut residents were paying an average of $415 on gasoline, but in 2022, they are paying $1,350.
The war between Russia and Ukraine has exacerbated this issue. Since Russia is the world’s largest oil exporter, countries around the world heavily rely on Russian oil to support their economies. To weaken Russia’s economy, countries are placing embargoes on Russian oil exports. On March 8, U.S. President Joseph R. Biden banned imports of Russian oil, natural gas, and coal to the U.S., hoping to deprive Russian President Vladimir V. Putin of the economic resources needed to continue the war. President Biden’s announced that “The United States is targeting the main artery of Russia’s economy. We’re banning all imports of Russian gas and oil and energy … The American people will deal another powerful blow to Putin’s war machine.”
The suspension of the gas tax has been implemented by Governor Lamont to give some financial relief to Connecticut citizens and families. The legislation was approved unanimously in the Connecticut House of Representatives, 142-0, and unanimously in the State Senate, 33-0. Governor Lamont described his motivation behind this enactment, stating, “With this Bipartisan action, we are taking steps to provide some relief to consumers as they face rising prices due to a number of international dynamics and market instability that go far beyond our state.” Connecticut Lieutenant Governor Susan Bysiewicz echoed this sentiment. “Our administration is acting today to provide immediate relief to Connecticut consumers who are paying higher prices at the gas pump as the result of the crisis in Ukraine and international inflation. Putting more money back in consumers’ pockets will help alleviate some of the strain families are experiencing as we emerge from the impact of the COVID-19 pandemic,” she commented.
The legislation is also suspending public bus fares. Governor Lamont said, “We are going to provide free bus service for all our bus-taking folks. I hope that makes a big difference in people’s lives.” The money that will fund the free bus fares will be taken out of the Federal American Rescue Plan. Similarly, the funds for the gas tax suspension will be removed from the Special Transportation Fund and the sales tax suspension from a general fund surplus.
It is unclear whether the gas tax suspension will extend past June 30. Connecticut House Minority Leader Vincent Candelora described the gas tax suspension as only an “instant relief.” Connecticut Speaker of the House Matt Ritter also emphasized that the financial condition of the state only allows for a gas tax suspension until June. He explained, “Years of responsible fiscal policy have put us in the position where we can suspend the gas tax until the end of June, add a second sales tax holiday, and provide free bus service.”
Although this single legislation may only last a few months, Representatives Candelora and Ritter clearly stated that there is more financial relief to come and many more steps the Connecticut government is willing to take. “We remain committed to working on sensible, affordable remedies for consumers during this time of runaway inflation. I hope this is just a first step in that direction,” said Ms. Candelora. Mr. Ritter also stated that more reprieve is on its way. “Today is just the first step – taxpayers should stay tuned because there is more relief to come to this legislative session.”
