Lamont’s truck tax will pour gasoline on the inflationary fire

Take a look around your home or place of work and consider this: Virtually every item you see has traveled on the back of a truck at one point. Trucks are the lifeblood of our economy and essential to the quality of life we all enjoy each and every day. This fact was more apparent than ever throughout the COVID-19 pandemic.

As coronavirus traveled across the U.S., it became harder and harder for supplies to do the same thing. But while most others locked down, truckers masked up and got to work. It’s a good thing, because more than 98.5 percent of the goods in Connecticut are moved by truck. As the old adage goes — if you bought it, a truck brought it.

That’s precisely why the new truck tax championed by Gov. Ned Lamont will have devastating consequences for businesses and families across Connecticut. Gov. Lamont and his allies in the statehouse are boasting about passing a budget with no tax increases. Anyone who believes that is in store for a rude awakening.

It doesn’t require a Ph.D. in economics to understand that when the cost of truck transportation goes up, the price of what’s being hauled does, too. Everyday consumers and the working people of Connecticut will feel the sting of Lamont’s truck tax with each purchase of groceries, gasoline, prescription drugs, construction materials, home furnishings, household goods and so on.

It’s been said that inflation is the “hidden tax.” But Lamont’s truck tax won’t stay hidden, because truckers across Connecticut and the many customers whom we serve — grocery stores, restaurants, retailers, manufacturers and family farms — will make loud and clear why the price of goods online and in-store are rising for everyone.

The truck tax will also take a toll on jobs. Connecticut is home to 10,060 trucking companies, providing more than 62,990 trucking industry jobs across the state. Most of these companies are small and locally owned-businesses, operating six or fewer trucks. Many won’t be able to absorb a 17-cents-per-mile tax increase and will be forced out of business.

Being located along a major freight corridor delivers enormous economic value for Connecticut, but a decline in truck traffic will jeopardize countless jobs at the many truck stops, travel plazas and rest areas across the state. Distribution centers, which provide tens of thousands of good-paying jobs, are sustained by constant truck traffic. Lamont’s truck tax is going to significantly increase their operating costs, and large retailers will certainly think twice about locating warehouses and fulfillment centers in the Nutmeg State.

This is exactly the kind of short-sighted policy that has helped to destroy Connecticut’s business climate over the past two decades, triggering a corporate migration crisis and a flight of people and jobs out of state. Connecticut ranks among the worst states to start a business, and eight out of 10 companies say the business climate is declining.

This cynical ploy to hammer the central and most critical link in the supply chain will be felt far and wide. Each truckload departing from one of Connecticut’s many marvelous manufacturers will be carrying a new price tag. This insidious truck tax will increase the cost of doing business for companies large and small and increase the cost of living for everyone across the income scale.

The people of Connecticut should wonder why the truck tax was passed in such a hurry, without public debate or any analysis on its economic impact. Perhaps it’s because lawmakers have no idea what they’re doing. Or maybe it’s because they know this specific tax scheme, technically known as a “weight-distance” or “ton-mile” tax, is doomed for failure. It’s an antiquated policy that states are moving away from, not toward.

Since 1938, 21 states have repealed their weight-distance taxes. Only four states today charge one. Gov. Lamont cites New York as a model example, but the ton-mile tax there has been an abominable disaster. The truck tax is difficult to enforce and easy to evade, rewarding bad actors and punishing the good. These wasteful inefficiencies always fail to deliver the revenues promised and create overhead costs ultimately borne by the taxpayer. And as neighboring Rhode Island found out, truck-only tax schemes might sound feasible on paper but they are far harder to implement, encountering numerous legal and logistical obstacles.

Despite false claims to the contrary, the trucking industry is proud to pay our fair share for the roads we use. Trucks pay 34 percent of all taxes owed by Connecticut motorists, despite representing only 7 percent of the vehicle miles traveled in the state. On top of that, trucks pay 48 times more in federal highway user fees than do cars. No one appreciates the need for greater infrastructure investment than truckers do.

But there are smarter and more equitable approaches to funding it other than hammering the most central and critical link in the supply chain. Lamont’s truck tax will pour gasoline on the inflationary fire and have disastrous consequences for the people of Connecticut and its economy.

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

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