Massachusetts officials mull fuel tax increase

November 14, 2019

Keith Goble

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The countdown continues for the 2020 regular session in Massachusetts while the back and forth on a possible fuel tax increase is ramping up.

Gov. Charlie Baker has attempted to tamp down consideration of a possible fuel tax increase. The state’s fuel tax is set 24 cents. The tax was last raised by 3 cents in 2013.

Instead, the Republican governor has unveiled a five-year, $18 billion bond bill touted to invest in the state’s transportation system. Multiple groups, however, are calling for a fuel tax increase between 15 and 25 cents.

Below is a roundup of options touted by groups around the state.

Boston-area municipal leaders

Officials from throughout Eastern Massachusetts are calling for new or expanded transportation revenue options.

The Metropolitan Mayors Coalition, the North Shore Coalition, and the Commuter Rail Communities Coalition want state lawmakers to “raise significant new revenue” to fix the state’s “ailing and congested” transportation system.

The groups, representing more than three dozen communities including Boston, want a 15-cent fuel tax increase and increases in other vehicle fees. Their plan would raise an estimated $450 million annually – or about $30 million per penny increase.

Additionally, the municipal leaders support adding tolls to more highways; allowing a portion of toll revenue to support transit, which they say would help to reduce roadway congestion; and collaborating with other Northeastern states to reduce greenhouse gas emissions as part of the Transportation and Climate Initiative.

The funds raised through revenue-enhancing mechanisms would be used to aid public transit infrastructure, reduce greenhouse gas emissions, and enhance economic development.

“The actions we take now will define Boston and our region for the next 10 years and the next generation,” Boston Mayor Martin Walsh said in prepared remarks.

Other groups weigh in

The Greater Boston Chamber of Commerce and other business groups have released a report that includes multiple recommendations to address transportation needs.

The group, called the Massachusetts Business Coalition on Transportation, advocates for a 15-cent fuel tax increase.

Separately, a coalition of business groups dubbed A Better City is advocating for an 11.5-cent fuel tax increase.

Additionally, an advocacy group called Transportation for Massachusetts wants to more than double the fuel tax rate to 49 cents – a 25-cent increase.

The state’s existing 24-cent excise tax raises about $770 million annually.

Governor’s plan

The Baker administration has been working with governors in states around the region to develop the Transportation and Climate Initiative. The plan to bolster transportation funding from Maine to Delaware is anticipated to result in a regional fuel tax to aid mass transit projects.

The governor has said he is opposed to a significant fuel tax increase for the state. He says the state has sufficient tax and borrowing capacity to cover needed transportation investments.

Baker has introduced a five-year, $18 billion bond bill to fund existing programs and initiatives intended to reduce roadway congestion and “ensure reliable travel throughout the Commonwealth.”

Specifically, the capital plan outlines $10.1 billion for Massachusetts Department of Transportation highway division construction projects. Of that amount, $5.6 billion would be routed to federal aid highway construction and $3.1 billion would be designated for highway work not supported by the federal government. Another $1.25 billion would be applied for bridges and $150 million would be spent to pave area roads.

“This $18 billion transportation plan legislation lays the groundwork for a transportation system that will meet the future travel needs of our residents and support a strong, competitive economy,” Baker said in previous remarks.

Keith Goble

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.