‘This hike will backfire’ truckers say on first day of Connecticut’s diesel tax hike to 49 cents

Chris Hancock, who has been in the trucking industry for over 25 years, has seen his fair share of changes in the last few decades but has never seen diesel prices this high. Pumping gas at the Truck Stop of America in Southington, Hancock watched his total rise over $600 Friday, the first day of Connecticut’s diesel tax increase.

“The price of diesel right now is really hurting the trucking industry and Americans as well,” said Hancock, general manager for Arizona based Daniels Moving & Storage Inc. “This is just not the time to raise prices especially as diesel has doubled just this past year alone. Companies were already struggling before the increase.”

The state’s diesel fuel tax increased Friday to 49.2 cents per gallon, a nearly 23% increase from the former 40.1-cent rate.

“Truckers drive America,” Hancock said. “All the goods that are here in Connecticut come in from truckers. So punishing truck driving companies is going to have a negative effect on people’s wallets as well when prices are already high.”

The 9 cents per gallon increase follows a year in which retail diesel prices have nearly doubled. It also comes six months before Connecticut is set to implement a new highway use tax on large commercial trucks.

The average price of diesel fuel in Connecticut now sits at $6.06 per gallon, according to AAA.

The tax-rate change, determined since 2007 by a formula based on the wholesale cost of diesel, will remain at the current rate until it is readjusted on July 1, 2023.

“It’s known in the trucking world to avoid the northeast because of the high taxes and fuel prices,” said Kevin Polite, truck driver and co-owner of Success for Business. “When the cost of freight and moving goods increases, then the price of common goods also increases. It’s an assembly line that hurts even the smallest guy on the totem pole.”

Polite, who operates out of Maryland, said his business will coordinate their logistics so that they will only fill up in certain states and skip states like Connecticut.

“This hike will backfire,” Polite said. “More truckers are going to skip filling up here in favor of states with less taxes. That’s just how business works.”

State policymakers declined to include the diesel tax in an ongoing suspension of the excise tax on gasoline, which was adopted this year amid rising fuel prices and inflation nationally.

Democratic lawmakers and Gov. Ned Lamont have said the diesel tax impacts mostly out-of-state truckers and opted for other tax cuts this year instead.

“You know the diesel tax, let’s say half that is paid for by out-of-state tractor trailer trucks, many of which don’t stop in the state, they just keep rumbling through,” Lamont said earlier this month. “I like to do tax cuts that really focus on middle-class folks here in our state.”

In addition, lawmakers argue that the increase will allow the state to further extend the suspension of the excise tax on gasoline which is in place through Nov. 30 of this year.

“That gives us some additional resources. So if we have to continue reducing the gas tax a little bit longer, that allows us to do it,” Lamont said. “Let those big guys pay a little.”

The state’s diesel tax generated around $115 million in each of the previous two fiscal years, according to the department of revenue sources for the state.

But some public officials, economists and others argue the increase will exacerbate inflation and only help to drive up the cost of goods and services for consumers.

“Inflation is already costing Connecticut families over $650 each month. Governor Lamont had a chance to do something to stop it but he didn’t,” said Republican candidate for governor Bob Stefanowski in a press release. “Today, he’s jacking up your taxes, and raising costs on everything, by increasing the diesel tax by 23%. It’s now nearly 50 cents per gallon!”

Senate Republican Leader Kevin Kelly and House Republican Leader Vincent Candelora also issued a joint press release in response to the tax hike.

“Today Connecticut grows even more unaffordable,” they wrote. “Connecticut had the power to deliver significant tax relief and energy assistance, including stopping the diesel tax increase, but Democrats refused to make our state more affordable. Instead, Democrats chose to pocket an $800 million surplus from over collected taxes from you and then ask you to pay more in taxes and the cost of goods and services in our state.”

Editor’s note: The headline on this story has been updated to reflect that the tax rose to 49 cents.