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By Samuel R. Avro on Dec 2, 2008 with no responses

Falling Gas Prices Cause Major Shortfall in Connecticut’s Budget

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The recent steep drop in gasoline prices has created an estimated revenue shortfall of $100 million in Connecticut’s state budget.

The state’s petroleum wholesale tax was being counted on to raise more than last year’s $340.7 million. Unfortunately for the state coffers, more than a third of that has suddenly evaporated into thin air.

According to the American Automobile Association (AAA) the average for regular gas in Connecticut has plummeted from an all-time high of $4.39 a gallon on July 7th to $1.98 on Monday.

The wholesale tax, called the Petroleum Products Gross Receipts Tax, is imposed whenever petroleum products, including gas, jet fuel and kerosene, are sold. It is separate from the retail tax of 25 cents a gallon that consumers pay.