Mass. House looking at 3-cent hike in gas tax
Boost would put Bay State on par with average state levy
A three-cent increase in the state’s gasoline tax, which has not risen in more than 20 years, would put Massachusetts on par with the average state gas tax nationwide, a boost analysts say would help fund transportation projects likely to flush money back into local the economy.
Legislators are considering the higher fuel tax as part of the $500 million transportation finance bill that passed the House late Monday — though it did so without a margin large enough to protect the plan from a threatened veto by Governor Deval Patrick, who has said more aggressive measures are necessary to address the state’s pressing transportation needs.
If enacted, the gas tax in Massachusetts would rise to 24 cents per gallon starting in July, with annual adjustments for inflation beginning in 2015. The increase would bring in an estimated $110 million a year, while costing the average driver $12 to $30.
Chris Lafakis, a senior economist at Moody’s Analytics in West Chester, Pa., said that minor impact will be offset by investments in transportation projects, which typically push about $1.50 back into the economy for every dollar spent.
An improved transportation system “can attract people from other metropolitan areas and it could attract businesses,” Lafakis said, so “you’re going to have to weigh the economic drag of higher gasoline prices against the economic gain of better infrastructure.”
Besides, Lafakis said, many economists do not expect gas prices to fluctuate dramatically in coming months.
On Tuesday, the US Department of Energy said it expects gasoline prices at the pumps to average $3.63 per gallon through the summer driving season, which runs from now through September.
That is just a few cents above the current national average of $3.58 reported by AAA Tuesday. In Massachusetts, the price is about 2 cents higher.
Transportation and environmental advocates, meanwhile, have had mixed reactions to the gas tax proposal, which would put Massachusetts in line with the average US state gas tax of 23.44 cents, according to the Department of Energy.
State and federal taxes make up about 11 percent of the price of a gallon of gas.
Mary Maguire, a spokeswoman for AAA Southern New England, said that while her organization is concerned about any measure that increases costs for motorists, the state’s transportation system has been so “woefully underfunded” that “a gas tax would have to be on the table.”
Environmentalists Tuesday stopped short of calling for a more robust gas tax increase, but some did question whether the House transportation plan is substantial enough.
“The Legislature’s proposal is modest at best. It’s going to help, but it’s not going to get us there,” said Jeremy McDiarmid, Massachusetts director at the nonprofit Environment Northeast. “We need a sustainable revenue stream that doesn’t shrink when we’re successful at reducing petroleum use.”
Rafael Mares, a staff lawyer at the Conservation Law Foundation, agreed that the focus needs to be on funding transportation improvements — by whatever means are most practical.
“The more important issue is that they raise sufficient revenue to support our transportation system,” Mares said. “The gas tax is one way. It’s not the only way.”
Massachusetts, however, is not the only New England state considering a gas tax increase.
In New Hampshire, legislators are debating whether to raise their state’s road toll on gasoline 4 cents annually for the next few years.
If enacted, that would increase New Hampshire’s gas tax to 22 cents starting in July, and would raise it to 30 cents by July 2015.