BOSTON — A new battle is brewing on Beacon Hill over the state’s gas tax, with advocates pushing to raise the levy to pay for upgrades to public transit and fix crumbling roads and bridges.
This week, a coalition of business groups called for hiking the 24-cents-per-gallon tax as part of a raft of revenue-generating proposals it argues are needed to plug an estimated $50 billion gap in transportation funding over the next two decades.
The group, called “A Better City,” says raising the tax by 11.5 cents, to 35.5 cents per gallon, would drum up $7 billion by 2040.
“Enacting a suite of fair, equitable transportation source fees will raise new revenue to transform our transportation infrastructure,” the coalition’s report stated. “This approach will ultimately deliver three primary benefits — better transit, less traffic, and cleaner air.”
The report adds fuel to a debate on Beacon Hill where legislative leaders are mulling plans for tax hikes and new fees to generate much-needed transportation funding.
To be sure, the latest efforts to hike the gas tax face pushback from fiscal watchdogs, pro-business groups and lawmakers who say it would hurt low-income families and small businesses.
Rep. Linda Campbell, D-Methuen, said she opposes increasing the tax because of the burden it would put on her working-class district along the New Hampshire border.
“It affects the people most, who can least afford it — the folks that are earning minimum wage who have to commute long distances to get to their job,” she said.
Rep. Lenny Mirra, R-West Newbury, also opposes an increase. He said the Legislature needs to cut state spending, not raise taxes, to meet its transportation needs.
“We do very little to rein in spending, especially on transportation,” he said. “We already collect a lot of taxes that are earmarked for transportation, but we’re not spending it wisely.”
Gov. Charlie Baker argues that the state has sufficient tax and borrowing capacity to make the needed investments in transportation, and doesn’t see a need to raise the gas tax.
The Baker administration has filed a bond bill calling for more than $18 billion in investment in transportation over the next five years, with $8 billion devoted to the MBTA.
Despite Baker’s opposition to hiking the gas tax, he is one of a dozen Northeast and Mid-Atlantic governors working on an initiative to reduce greenhouse gas emissions from the transportation sector, an effort that could lead to more revenue but also higher gas prices.
The Transportation Climate Initiative would set “cap and trade” like policies to lower vehicle emissions. Fiscal watchdogs such as the conservative Massachusetts Fiscal Alliance have called it a “hidden gas tax” that bypasses the normal process of approving new state taxes and fees.
“Whether you support this gas tax hike or not, it’s wrong of the governor to pursue a tax increase without a legislative vote,” said Paul Craney, the group’s spokesman.
In 2013, the Legislature raised the gas tax by 3 cents for the first time since 1991 and indexed it to inflation, so that when the value of the dollar rises the tax increases along with it. Groups opposed to the automatic increases put a “tank the tax” question on the 2014 ballot to decouple it from inflation adjustments. The measure passed with support from 53% of voters.
Proposals to increase the tax since then have languished amid a lack of support. But recent derailments on the MBTA subway system and a report from the Baker administration suggesting that the state has reached a “tipping point” on traffic congestion have rekindled efforts by advocates to hike the gas tax to boost funding.
The state’s gas tax generated nearly $800 million in 2019, according to the Department of Revenue. The money goes toward fixing roads and bridges, and other projects.
Massachusetts also charges a 2.54 cent per gallon fee for removing underground gasoline tanks, which brings the state’s overall rate to 26.54 cents per gallon.
Overall, Bay State drivers pay a total of 44.9 cents per gallon in gasoline taxes, including state and federal taxes and other fees, according to the American Petroleum Institute. That puts it below the U.S. average of just under 49.3 cents per gallon in total taxes, the group says.
In New Hampshire, which has a 22.2 cent state tax, drivers pay 42.23 cents per gallon in total taxes and fees, according to API. In Maine, the total is 48.41 cents.
Christopher Carlozzi, Massachusetts state director of the National Federation of Independent Businesses, said low-income families aren’t the only ones who would take it on the chin from a gas tax increase. Small-business owners would suffer too.
“Higher fuel taxes, new tolls and congestion fees are all direct taxes on small businesses simply trying to provide affordable products and services to residents,” he said.
The group wants state officials to consider transportation-related reforms, such as reducing Massachusetts’ third-highest-in-the-nation road repair costs.
“Policymakers are talking out of both sides of their mouths,” Carlozzi said. “First, they say how unaffordable Massachusetts is becoming, then in the next breath they want to impose new taxes that will increase costs for every business, consumer, commuter and working family in the state.”
Christian M. Wade covers the Massachusetts Statehouse for The Salem News and its sister newspapers and websites. Email him at firstname.lastname@example.org.