SalemNews.com, Salem, MA

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April 3, 2013

Mass. lawmakers: Raise state gas, cigarette taxes

BOSTON — Legislative leaders unveiled a transportation financing plan yesterday that called for $500 million in new revenues, including increases in state gasoline and cigarette taxes, while rejecting a heftier tax hike proposed by Gov. Deval Patrick.

The lawmakers’ proposal seeks to eliminate a chronic operating deficit in the state’s transportation system and would forestall any immediate need for further fare hikes or service cuts on the MBTA or other public transit systems. But it would provide for only about half the new transportation funding sought by Patrick and does not earmark the money for specific projects, such as expansion of commuter rail.

“In order for our state to remain competitive, we need a transportation system that works,” said House Speaker Robert DeLeo at a Statehouse news conference with Senate President Therese Murray and other key Democratic leaders.

“Yet we also recognize that Massachusetts is still struggling to emerge from the financial downturn. Families and businesses are still sensitive to any additional burdens,” DeLeo added, in explaining why lawmakers opted for the scaled-down tax plan.

DeLeo also said he wanted to make sure the state preserved its positive bond rating.

Patrick, also a Democrat, had proposed a series of tax changes that he said would raise nearly $2 billion in new revenues for transportation and education initiatives. The governor’s plan called for raising the state income tax rate from 5.25 percent to 6.25 percent, while also lowering the sales tax from 6.25 percent to 4.5 percent.

While the legislative plan only deals with transportation, the chair of the House Ways and Means Committee, Rep. Brian Dempsey, ruled out further tax increases in the overall state budget proposal expected to be released by his panel next week.

Patrick issued a guarded statement yesterday, thanking lawmakers for reviewing his plan and promising a thorough study of their proposal.

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