House Passes Highway Usage Tax On Large Commercial Trucks
The Democrat-controlled House of Representatives approved a new highway usage tax on large commercial trucks Tuesday to bolster Connecticut’s ongoing rebuild of its transportation network.
The measure, which passed 88-59 largely along party lines, now heads to the Senate.
There would be a series of fees, starting in January, based on truck size and miles traveled that would generate about $90 million per year. Fees would range from 2.5 cents per mile for vehicles weighing 26,000 to 28,000 pounds to 17.5 cents per mile for trucks weighing more than 80,000 pounds. It applies to travel on roads, not just on limited highways, in the state.
A last-minute amendment, adopted on a voice vote, carved out an exception for trucks licensed to carry milk, provided they are transporting that product to or from a dairy farm.
“Those who use the road, and do the most damage, we’re going to ask them to pay,” said Rep. Sean Scanlon, D-Guilford, co-chairman of the legislature’s Finance, Revenue and Bonding Committee.
But Republican legislators countered that the tax, proposed by Gov. Ned Lamont, is going to hinder the state’s economic recovery from the coronavirus pandemic.
“I’m worried that we place yet another burden on businesses,” said Rep. Holly Cheeseman of East Lyme, ranking House Republican on the finance committee. “This is ill-timed, ill-advised.”
“Let’s call it for what it is, a tax on every single person in Connecticut,” added Rep. Whit Betts, R-Bristol, who predicted it would drive up the prices at grocery stores, which receive most products via truck.
Lamont had pushed for tolls on cars and trucks in 2019, with the goal of generating $600 million per year for transportation, but legislators declined to vote on the plan.
The state’s transportation program appears to be on sound financial footing — provided Connecticut does not intend to accelerate the ongoing rebuild of its aging, overcrowded highway, bridge and rail system.
But transportation officials have warned Connecticut needs to spend hundreds of millions more annually both to maintain a state of good repair and make strategic improvements to alleviate congestion.
According to projections the Lamont administration shared in late April with Wall Street credit rating agencies, the budget’s Special Transportation Fund — which finished in deficit last fiscal year and is barely in balance this year — goes back into the red in 2021-22 unless adjustments are made. And the fund’s emergency reserve would be depleted by 2026.
New projections later this spring from state analysts upgraded STF revenues modestly, but the fund continues to operate on narrow margins.
The STF pays state Department of Transportation operating costs and also covers the debt payments on the $800 million to $900 million Connecticut borrows annually to finance infrastructure upgrades. That borrowing, in turn, allows the state to secure about $700 million in matching federal construction grants each year.
Joseph Sculley, president of the Motor Transport Association of CT, the state’s largest coalition of trucking-related businesses, said the proposed tax “is unworkable and never generates the predicted revenue,” adding it has been tried and abandoned in 20 other states.
Trucks from out-of-state firms will find new routes to avoid Connecticut, leaving only in-state businesses to pay the tax, Sculley said. He said the levy also will drive up the cost of consumer goods, ultimately weakening the state’s economy.
The truck fees endorsed by the House normally would have been included in the same bill that contains the proposed state budget for the next two fiscal years, which the House also was expected to adopt later Tuesday.
But Democratic leaders, hoping to gain votes for the budget from tax-hike-wary GOP lawmakers, agreed to hold a separate ballot on the truck levy.