I-TEAM INVESTIGATION: A history of CT’s diesel tax
(WFSB) - Connecticut is set to announce on Wednesday the state tax on diesel.
Diesel prices affect everything from the cost of groceries to the price of unleaded gas.
As of Tuesday night, that state tax was 40 cents a gallon.
Channel 3′s I-Team sought to compare that to other state.
The answers it found led to more questions.
Here’s why: Connecticut’s state diesel tax is, as mentioned, 40 cents a gallon. With the federal excise tax factored in, it’s 64 and a half cents a gallon.
In Illinois, it’s 91 cents a gallon, in Indiana it’s 78 cents and in Michigan it’s 71 cents.
A look at the average price of diesel in the states, according to AAA, showed:
- Connecticut at $6.16.
- Illinois at $5.67
- Indiana at $5.88
- Michigan at $5.78.
All of the states with higher taxes had lower diesel prices. The I-Team wanted to find out why.
David Cadden, professor emeritus of Entrepreneurship and Strategy at Quinnipiac University in Hamden, explained.
“[There are] higher diesel prices because we’ve lost about half of the refinery capacity over the last 15 years,” Cadden said.
Five refineries shut down during the pandemic and have yet to reopen, so lower capacity is one reason.
Cadden said the other was simply Connecticut’s proximity to the refineries compared to the midwestern states used as examples.
“In New England, we get most of our diesel through a pipeline that takes between 12 and 18 days to ship it up from Houston, but because it’s so bad they’re bringing it in from the Midwest where they had closer proximity to refineries and they’re trucking it into New England,” Cadden said.
As far as how $6 diesel goes, that started back in 2007.
That’s when Connecticut shifted from a flat tax to this one that’s calculated annually.
“It was done annually so that the businesses could enjoy the increases or reductions in a tax, where a flat tax tends to be more onerous,” explained Rep. Vincent Candelora, Republican, 86th District.
The current price of diesel is what sways it the most and it resulted in lower taxes during 2020 and 2021 when driving was down.
In 2007, the formula got major bipartisan support passing 134-5. Candelora cast one of those “yea” votes.
“I don’t regret putting it on this annualized scale,” he said. “What I do regret is not eliminating or suspending this tax for at least half a year, in the way we suspended this unleaded tax.”
The diesel tax amount will be announced Wednesday and will take effect on July 1.
Experts are projecting that Connecticut could see a 10 cent increase at the very least.
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