Members of the Connecticut Republican Party hoping to overturn the state’s new highway use tax on trucks gathered at the Legislative Office Building in Hartford on Wednesday to make their case ahead of Friday’s public hearing.

At the press conference, Rep. Vincent Candelora (R-North Branford) gathered several Connecticut business owners who rely on the trucking industry – either as their main service or to help run their company – to speak on the impact the newly implemented tax has had or will have on their bottom line.

For several, like Dave Palumbo, owner of Palumbo Trucking in North Branford, it has meant hiring on a new staff member to track and administer the tax each month, which means additional costs.

“Just to hire an individual is costing me $85,000 a year to put a staff member of it,” he explained. “That’s just the administration part. The tax alone is gonna be upwards of anywhere from $80,000-90,000, up to $100,000 as our season gets busier.”

For some industries, those costs can and likely will be passed on to the consumer in the form of higher prices. But many of the business owners assembled on Wednesday say they don’t have the ability to pass those costs on if they want to stay competitive in the market.

The highway use tax was passed by the General Assembly in 2021 and went into effect on January 1^st of this year. It imposes a tax on trucks bringing goods through the state in an amount based on the weight of the truck and the distance traveled on Connecticut roadways. It applies to all companies driving through the state, with projections that the bulk of the burden would fall on those headquartered out-of-state.

But Candelora doesn’t believe those out-of-state companies will contribute as much to the program as expected, arguing that the lack of enforcement mechanism makes it potentially easy for these companies to underreport or simply choose not to pay. A 2017 report from the American Transportation Research Institute estimated that companies underpaid New York’s highway use tax by as much as $55.7 million (around 35% of estimated revenue) in 2015.

Additionally, Candelora cited large pandemic surpluses in the Special Transportation Fund which are estimated to last into 2026 as a reason to press pause on the highway tax to reassess the impact it has on local businesses and consumers. 

“I just really think that we need to look at it again,” argued Candelora. “If we’re going into a budget cycle with surpluses, and a transportation fund that currently has a surplus, I think we’re very well poised to put a pause on this program.”

Supporters of the tax, meanwhile, cite concerns that those surpluses will dry up quickly without it, and point out the necessity of those funds to help the state take advantage of remaining federal infrastructure dollars.

Following the press conference, the governor’s office reached out to the media to stress the importance of the tax to ongoing efforts to maintain roadways in the state.

“It is incredibly important that Connecticut has the financial resources to rebuild and maintain our bridges, roads, and transportation network,” said Adam Joseph, Director of Communications for the governor. “Bankrupting the Special Transportation Fund takes us in the wrong direction and will result in the State being unable to undertake critical projects to improve safety, reduce traffic and get you to where you are going on time.”

According to the governor’s office, the tax represents “$1.1 billion of bonding capacity over the next five years.”

A bill to repeal the tax has been introduced to the General Assembly. Republicans used a parliamentary procedure to force a public hearing in the Finance Committee this Friday. Its future, though, is uncertain since the original bill is still strongly supported by the governor.

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