Repeal of Mass’ Gas Tax: The $100 Million Question

Friday, December 06, 2013

A gas tax repeal initiative appears to be heading to Bay State ballots next year, raising the question: does Massachusetts really need the money in the first place?

According to Ryan Fattman, a freshman state representative from the 18th Worcester district, the state has money to spare. He claims Gov. Deval Patrick is sitting on $100 million in transportation funds in hopes of keeping the automatic gas tax increases – currently pegged to the rate of inflation – in effect.

“Governor Patrick wanted a larger tax increase and he didn’t get it. There’s $100 million in chapter 90 funds that he’s choosing not to release. Those funds exist. There’s no money lost. This has never happened before, the money for infrastructure, for bridges and roads, being held hostage. It’s really insulting.”

He’s not alone in this belief. “The state already has the money,” says Chris Pinto, vice chairman of the Worcester Republican City Committee, in an e-mail. He, along with Fattman, has been a key figure in obtaining over 87,000 signatures enabling the initiative to be considered for the ’14 ballot.

“Over the past 16 months they have taken in $900 million above revenue projections! While the legislature did pass the gas tax they did not pass the bill for funding the projects. In other words they just took the revenue.

“The legislature admitted they could do without the tech tax,” a similar tax which was abolished earlier this year. “Maybe they should look at finding ways to do without automatic tax hikes.”

“Two Cups of Coffee”

“If there is $100 million lying around, MASSDOT would love to know about it.”

So says Andrew Bagley, the Director of Research for the Massachusetts Taxpayer Foundation.

“To say that the state has this money just locked away in a vault somewhere, and if only we could open the door…it’s a misleading focal point of this conversation. This is a political argument, not an economic one.”

This is because while the $100 million cited by Fattman is part of the state’s operating budget, the income raised by the gas tax is used as debt service to potential bond holders. To Bagley, they are two separate issues, and a potential missed opportunity for needed investment.

“We had to wait 15 years for Beacon Hill to raise the gas tax, and even then it was only three cents.” If the index were to be left in place, it “would generate $100 million in additional money by 2020. You can sell over $1 billion in bonds against this.”

“This tax provides money to fix roads and infrastructure. It’s a significant source of revenue for the state. For consumers, it’s the equivalent of two cups of coffee. Per year. “

That’s two cups too many for the 87,000 voters who signed the petition. Fattman, who personally gathered over 2,200 of them, clearly feels the issue has touched a nerve among spending-conscious voters, suspicious of legislative double standards.

“Officials receive a per diem to purchase gas. Thus, this tax doesn’t affect them. They buy their gas with public money.”

Pinto has also been a key figure in the initiative. “People are angry,” he replied. “Some felt [the gas tax index] had been repealed with the tech tax. They were even angrier when they find out it wasn't. They don't like that legislators don't have to pay the gas tax to commute.”

To The Booth

The initiative reached the state legislature earlier this week, and will soon decide whether it gets put on the ballot in ’14. Despite the fact that the index was passed earlier this year without a single Republican vote, that same legislature seems to be willing to let the issue go to the polls.

“I’d be shocked if it doesn’t pass on a voice vote,” says Fattman. “It would be a huge liability to Democrats otherwise. You’ll see this become a larger issue.”

“Democrats will have to defend (A) why they want taxation to go up automatically, and (B) why they don’t do their job and debate.”

Bagley, too, sees this issue going to the polls, and rues what he perceives to be a potentially misinformed electorate.

“No’s are a lot easier on the ballot than yeses. It’s easy to say, yes, vote it down. Meanwhile, there’s not going to be an aggressive campaign to keep the index.

“People believe gas tax is much higher than it is. We’re talking 3 cents on 3.50 / gallon gas. You see three cents of volatility in gas prices per week.”

“It’s just not a powerful vote.”

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