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OPINION: The massive impact of misusing gas tax money

OPINION: The massive impact of misusing gas tax money



By Len Suzio

Recently I wrote a series of op-eds on the tolls controversy and the propaganda issued by the governor’s office. Shamefully, they’ve tried to mislead people into thinking that the legislature had to transfer billions of dollars from the General Fund to cover the money needed by the Special Transportation Fund (“STF”) to pay for transportation spending.

The facts supporting my opinion pieces are incontrovertible. For more than 30 years the legislature mandated that billions of dollars of fuel taxes in the form of the Petroleum Gross Earnings Tax (“Petroleum Fuel Tax”) go directly into the General Fund, rather than placing them in the STF. The legislature did this even though the fuel taxes are paid for by motorists when they purchase gas in Connecticut. Almost everyone assumes that gas taxes go toward paying to maintain our roads and bridges. The revelation that every dime of the Petroleum Fuel Tax money went directly into the General Fund was an eye opener.

If anything, my op-eds understated the massive impact of this misuse of gas tax money. Going all the way back to 1981 and reviewing the Petroleum Fuel Tax collections through fiscal year end 2015, the state collected about $5.2 billion of Petroleum Fuel taxes while remitting only about $2.1 billion to the STF where it would be spent on transportation needs.

Some legislators have written saying I was misleading the public. They claimed I implied the legislature took the money from the STF and they pointed out the history of the Petroleum Fuel Tax collections going directly into the General Fund as soon as the Petroleum Fuel taxes started rolling in during 1981. They asserted the legislature never intended the Petroleum Fuel taxes to pay for transportation spending. In so doing, they proved my point!

I don’t argue that the legislature didn’t have the authority to do this. I know, and the public has the right to know, that the legislature, from the inception of the Petroleum Fuel Tax in 1981, had no intention of using the Petroleum Fuel taxes for transportation-related spending. It was a deliberate policy choice to misuse (in my opinion), fuel taxes for spending not related to roads and bridges. That makes the history of the use of the Petroleum Fuel Tax even more relevant to the public discussion.

When the governor and toll proponents argue that fuel taxes don’t bring in enough revenue to sustain transportation spending, and the governor’s office issues an extremely misleading press release citing the transfer of billions of dollars from the General Fund to the Special Transportation Fund as proof of the inadequacy of fuel tax revenues to sustain transportation needs — even though all the money transferred from the GF to the STF originally came from fuel taxes — I thought it was time to make sure the public had the complete picture.

Here’s the simple fact: if the Petroleum Fuel Tax originally had been placed directly into the STF (as the legislature mandated beginning October 1, 2015) there would have been no need to transfer money from the General Fund to the STF.

One other aspect of the tolls debate in Connecticut that has not been discussed is the massive subsidies provided from the STF for public transportation. Given the dire state pf STF finances I would suggest this should be a part of the public debate about tolls and the larger picture of the Special Transportation Fund.

The annual subsidies for public transportation amount to about $430 million currently. This compares to $155 million for road and bridge maintenance. The capital spending for highway operations and maintenance is another $340 million in the FY 2020 authorizations. So, the STF public transportation subsidies are comparable to the cost of maintaining our highways and bridges.

Every year, hundreds of millions of dollars of fuel and motor vehicle related taxes are used to subsidize public transportation in Connecticut. Maybe it’s time to reconsider the spending priorities. In particular, about $130 million of STF money subsidizes the Metro North New Haven line.

This is the commuter line used by some of the highest income people in the entire country. Moreover, the taxes they pay on their earnings in New York City are deductible against their Connecticut income taxes, basically wiping out their Connecticut income tax liability for their work in the city.

Metro North ridership numbers indicate about 41 million trips are taken annually on the New Haven line. So, the $130 million annual subsidy averages out to about $3 per ride. It’s a small subsidy per ride that adds up more than a quarter of a billion dollars in each biennium. And with billions of dollars earmarked for infrastructure spending on the line the subsidy is getting larger. Why not end the subsidy of affluent commuters to travel to jobs that don’t pay income taxes to Connecticut? It won’t require an expensive tolling system. It can be implemented quickly. And it won’t be as regressive as the tolls would be.

Len Suzio is a former state senator.


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