With gas prices in Connecticut hovering around $4/gallon for regular unleaded, Democratic leaders in the general assembly have come up with a proposal to offer some relief at the pump.
With projections that gas could skyrocket to nearly $5 per gallon by the summer, Democratic lawmakers decided to move on one of the few things that can be done on the state level to ease rising gas prices - cap the gross receipts tax distributors pay on the wholesale price of gasoline. The wholesale price is about $3.18 per gallon, which would currently save drivers about a penny per gallon. If the price rises to $4 per gallon wholesale, it would save over 7 cents per gallon at the pump.
Republican lawmakers have been proposing a cap on the gross receipts tax for several months, but Democratic State Senator Martin Looney says his party's plan goes a step further. "One of the things that we're giving the Commissioner of Consumer Protection is more authority to impose fines of up to $10,000 upon large gasoline wholesalers and distributors who are in violation of profiteering statutes so anyone who fails to respect the cap and tries to evade it by passing along a price when they're no longer subject to that increased price, will be subject to violation," said Looney.
Under the proposal, The gross receipts tax would be pegged to a cap of $3 per gallon until June 30, 2013. But current state law calls for the tax to jump to a much higher rate the following day, which could mean a jump of several cents per gallon on July first of that year without a legislative fix.