February 12, 2018

Gas-tax revenue shows its limitations

Clarification: Besides gasoline, "gallons consumed" also includes fuels like natural gas and propane. Gasoline makes up about 84 percent of the total gallons.

Late last month, Gov. Dannel P. Malloy called for lawmakers to authorize statewide tolls, a new fee on tire purchases and a 7-cents-per-gallon hike in the state's 25-cent gasoline tax.

In his final year in office, Malloy is hoping to pave a path to a future where the state's Special Transportation Fund can afford a slate of major road and bridge projects.

His proposals are sure to be controversial in the recently begun legislative session.

No matter how you feel about the state's roads, its fiscal habits or Malloy himself, data shows that the single largest source of revenue for transportation projects is more or less flatlining.

The gasoline or "motor fuels" tax represents about one-third of the taxes and fees that make their way into the STF each year.

Gasoline consumption ticked up in fiscal years 2015 and 2016, helping drive a revenue boost for the STF.

But gas-tax revenue dipped last fiscal year to just over $484 million, the lowest amount since 2013, according to the state Department of Revenue Services.

The state's most recent consensus revenue report projects over the next five years that gas-tax receipts won't exceed $503 million.

Looking out into the not-so-distant future, the Argonne National Laboratory predicts that 58 percent of light vehicles will be electric by 2030, which portends a drop in the STF coffers.

"It's a dying funding source," Malloy said at a recent press conference. "This state, like every other state, is going to have to figure that out."

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