Opinion: Connecticut Residents Will Be Stuck Paying the Bill

The following opinion article was first published in the Hartford Courant. It is reposted here with the permission of the author.

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The people of Connecticut are about to receive an unwelcome New Year’s bill at a time when they can least afford it.

Beginning Jan. 1, a new truck tax will be implemented. The typical tractor-semitrailer—which carries the bulk of food, fuel, vaccines, household goods and construction materials—will be taxed an additional 10 cents for each mile driven on Connecticut roads, causing delivery costs for every good throughout the state to increase.

We’re all aware of the ongoing supply chain challenges that have driven up prices online and in-store.

Over the past year, inflation in Connecticut has increased prices by nearly 8%, with an 18% rise in energy prices and an 11% increase in the price of food.

The tax will only exacerbate inflation as trucking companies—which survive on razor-thin margins—cannot absorb such drastic and arbitrary increases to their operational costs.

The problems with the tax are numerous, which is why 21 states have voted to eliminate similar “highway use tax” schemes over the past 30 years.

Higher Prices

Such policies are wildly expensive to administer while being plagued by widespread evasion.

In neighboring New York—one of only four states still hanging on to such a scheme—evasion rates are as high as 50% because the system relies on self-reporting, which many out-of-state trucking companies simply don’t bother doing because the state has little enforcement capability beyond its borders.

The timing could not be worse, as fuel shortages threaten a winter heating crisis across the Northeast.

That means local Connecticut companies could bear the brunt of this tax while out-of-state trucks find it easier to evade.

And ultimately, Connecticut residents will be stuck paying the bill in the form of higher prices for essential and everyday goods, hitting those who can least afford it the hardest.

The timing could not be worse, as fuel shortages threaten a winter heating crisis across the Northeast and the highest home energy prices in decades.

Legal Concerns

The truck tax also rests on shaky legal ground by requiring truckers to carry a paper document showing they have registered for the tax.

Federal law preempts states from requiring trucks engaged in interstate commerce to carry such documents.

A recent federal court decision overturned Rhode Island’s truck-only tolls scheme in part because the tolls were imposed solely on the same vehicles that Connecticut’s new truck tax will apply to, meaning a judge could also rule the tax unconstitutional for discriminating against a certain class of vehicles.

The trucking industry is always willing to pay its fair share for the roads we travel on, and out-of-state trucks already pay Connecticut for every mile they travel in the state through the International Fuel Tax Agreement and International Registration Plan.

Out-of-state trucks already pay Connecticut for every mile they travel in the state.

Moreover, the state is now receiving a $5 billion infusion of federal transportation funds from the Bipartisan Infrastructure Law, which the American Trucking Associations lobbied heavily for and helped secure passage of, and has budget surpluses as far as the eye can see.

These resources hadn’t yet materialized when the truck tax was conceived in Hartford, but their availability now renders the plan unnecessary, not to mention unwise.

Sustainable transportation revenues are derived from taxes that are equitable, legal and administratively feasible—none of which describe Connecticut’s truck tax. It punishes good actors while rewarding bad ones while driving up prices for everyday goods.

The people of Connecticut should let Gov. Ned Lamont know how out of touch the truck tax is with today’s economic realities—and tell their elected officials in the General Assembly to fix this mistake before it’s too late.

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About the author: Chris Spear is president and CEO of the American Trucking Associations.