HARTFORD, Conn. (WTNH) – Connecticut’s tax on diesel fuel will increase by 9 cents per gallon on July 1, the Department of Revenue Services announced Wednesday.
The tax, which is currently 40.1 cents per gallon, will increase to 49.2 cents per gallon, according to a letter from Commissioner of Revenue Services Mark Boughton to lawmakers.
“In accordance with this statutory obligation, I am hereby notifying you that, effective July 1, 2022, the tax rate on diesel fuel will be 49.2 cents per gallon,” Boughton wrote.
The scheduled diesel tax increase is part of a formula required by law. It happens every year.
The tax increase hits this year during high inflation. A perfect storm creates a 20 percent increase per gallon in diesel fuel.
The rate will remain in effect until June 30, 2023.
“It’s going to go up 9 cents on July 1, still the lowest in the region, but it’s still a hit,” Gov. Ned Lamont (D) said. “That’s why we have the biggest tax cut in history to make life a little more affordable for people.”
Republican gubernatorial candidate Bob Stefanowski and other GOP leaders have urged Lamont to suspend the hike.
“Higher costs for goods means higher inflation and an even more expensive state,” Stefanowski said in response to the tax hike. “I urge Gov. Lamont to suspend all state taxes on gas and diesel to help residents get through the current crisis that he and President Biden created.”
The governor has refused to halt the hike.
Last week, Boughton told News 8 that part of that rate is variable driven by the price of wholesale diesel fuel, which has gone up over the past year.
“You have to remember that Connecticut does not have a highway use tax or highway use fee for in-state trucking companies or those small delivery companies nor do we have tolls,” Boughton said.
Mike Paine owns Paine’s Rubbish and Recycling, a family business started more than 90 years ago.
The business has 50 trucks in its fleet. A majority of them run on diesel fuel. Right now, diesel costs more than $6 a gallon.
“So we’re caught between a rock and a hard place,” Paine said.
Paine said it now costs $40,000 a week to fill this above-ground tank. It was $25,000 in May.
Paine’s is cutting costs by installing hand dryers in the bathroom instead of buying reams of paper and some of the 70 employees are mechanics and can fix equipment on the spot.
”I don’t want to have to raise their prices. So I’m cutting where I can everywhere except our employees’ wages because we’ve got great people and they work too hard to penalize them for something they didn’t do,” Paine said.
Running diesel tractors is expensive. Despite a tax exemption on diesel-powered equipment, farmers are sweating.
“You have to make some tough decisions about how many laps around the vineyard you’re going to do,” said Nathan Edwards from Jonathan Edwards Winery in eastern Connecticut.
A Meriden fuel company owner told News 8 she will spend half a million dollars more to make up for the tax increase.
There are Republican diesel tax rallies in Stratford and Wallingford Wednesday. They are putting pressure on the governor to call a special session of lawmakers at the Capitol to deal with diesel fuel costs.
This is a developing story. Stay tuned to News 8 for updates on this story.