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Massachusetts is concerned about its aging and deteriorating road
systems. Congestion is getting worse. Commute times are rapidly increasing. Businesses are
concerned that they will not be able to find the workers they need. Commuters are fed up with
road congestion and a failing public transportation system.[1]
Massachusetts has severe public transportation problems and these
problems are betting worse – not better.
To begin to address this problem will require massive amounts of money.
One possible source of this funding is that of an increased tax on gasoline. A significant
increase in the state gasoline tax, in and of itself, would be insufficient to meet the needs
of the state’s overburdened transportation system. But, raising the gasoline tax would pay for
part of the improvements needed.
“Today, less than half of the costs to build, maintain, and operate
our road system are paid for from such user fees, with the bulk coming from general tax revenue
— mostly property taxes.
“This will only get worse. Electric cars use no gasoline and so do not
contribute to this part of road costs. Not a problem today, with Battery Electric Vehicle’s
(BEV’s) accounting for just over 1% of US auto sales. However, by 2025 BEV’s are expected to
comprise between 25% and 100% of US auto sales.” (Ref. 2)
Herein, I will address the issues surrounding a gas tax increase and
other revenue raising schemes to pay for transportation infrastructure improvements - and how
to make the increases as equitable as possible – in other words, how to have everyone pay
their fair share of these increased cost burdens.
“The Massachusetts Business Coalition on Transportation
thinks increased taxes on gas and ride-shares can help provide the much-needed relief.
“Just think about it: congestion pricing, managed lanes, tolling
on routes other than just the Massachusetts Turnpike, money drawn from drivers being invested
back into public transit, and a transportation system that could adapt to meet future needs.
“That's what most of a coalition of business groups supports asking
the Legislature to tell the smartest minds in the state: start thinking seriously about the
options for reducing congestion on roads, improving accessibility and service on public
transportation, limiting greenhouse gas emissions and raising the money to pay for it in a
fair and geographically-equitable way.
“But in the meantime, get to raising the revenue necessary to take
care of immediate needs -- like structurally deficient bridges and poor roadway conditions
-- by taxing customers a little more for gasoline and increasing the fee built into ride
service fares, much of the Massachusetts Business Coalition on Transportation agrees.
- - -
“The business community has increasingly decried the Boston area's
public transportation woes as a hindrance to growth. Traffic and congestion on the roads all
over the state make for long and frustrating commutes by car, and the unpredictable nature of
public transportation in all regions frequently makes workers late to their jobs.
“A Better City released a report this year detailing an
$8.4 billion shortfall in revenues needed to ensure state roads, bridges and MBTA
{Massachusetts Bay Transportation Authority} infrastructure are in a state of good
repair over the next 10 years. And a March poll
conducted by MassINC Polling Group found that 66 percent of residents think action
is ‘urgently needed’ to improve the state's transportation system.
- - -
“. . . it would be hard – ‘not impossible, just hard,’ . . .
to put together a transportation financing proposal that didn't include an adjustment to the
gas tax. [Emphasis mine]
“{Some support} a gas tax increase of between five and 25 cents . . .
The Greater Boston Chamber of Commerce backs a 15-cent gas tax increase phased in
over a three-year period.
“{Massachusetts} motorists currently pay 24 cents per gallon in state
gas tax, fractions of a penny below the national average, according to the U.S. Energy
Information Administration. For each gallon of gas, drivers also pay a fee of roughly
2.5 cents to support the Underground Storage Tank Petroleum Product Cleanup Fund.
When all state and federal assessments are calculated in, about 45 cents of every gallon of
gas pumped in Massachusetts goes to taxes or fees.
“Every penny added to the state's gas tax could produce roughly
$32 million in new annual revenue, the Massachusetts Budget and Policy Center
wrote. . . The report also warned that increasing the gas tax will disproportionately
impact low- and moderate-income households, and may be undermined by the state's long-term
goal of reducing its carbon footprint.” (Ref. 3)
An increase in the Massachusetts gasoline tax places much of the
financial burden where it belongs – upon the gasoline powered vehicles that use the state
highways. But, there are other users of the state’s highways. Among these are electric
powered vehicles, often referred to as EVs. Since they don’t use gasoline, they pay no
gasoline sales tax, but they do use the state’s roads.
“How do we pay for the highway system? The roads don’t build
themselves, in fact they cost a ton of money to construct and maintain. In the US, most
of the money comes from gasoline taxes, which have proven to be an efficient method for
funding highways. The tax is collected at the pump and directly related to usage – more
miles driven, means more fuel consumed and more taxes paid.
“Over the long term, however, gas taxes will become a less
efficient means of filling the highways’ coffers. Electric cars obviously do not consume
gasoline, so there’s the first problem. Also, some vehicles, like plug-in hybrids,
consume much less gasoline per mile, so owners of these efficient rides pay considerably
less into highway funds.
“While it’s clear that, in the long run, some changes will be
required to the highway funding systems, the big question is: What’s the best solution
that will serve all our needs and encourage increasing fuel efficiency?”
(Ref. 4)
For EVs, or more broadly cars that run on fuels other than gasoline
and diesel, some options being considered are:
1) impose a flat yearly registration fee for electric cars,
2) charge a per-mile tax for electric cars or those with high fuel efficiency,
3) tax the electricity delivered through a charging station.
4) Raise funds for highways and public transportation through general revenue means.
Of these options, only the first two are currently receiving
serious consideration and/or have been implemented. The fourth option is assuming greater
importance as gasoline mileage continues to improve and the number of non-gasoline powered
vehicles grows.
It is clear that electric vehicles put just as much wear and tear
on roads and highways as gas vehicles. Taxing EVs in some way simply ensures that EV owners
contribute their fair share to the upkeep and modernization of the state’s highways.
It must be kept in mind that taxing EVs at too high a rate
could slow the adoption of clean energy vehicles that reduce emissions and dependence on oil.
Thus, there may be justification for ensuring that EVs and similar types of transportation
receive some compensation for being energy efficient and non-polluting. It can be argued that
the overarching transportation funding problem should treat all vehicles and energy sources
equitably and should encourage reductions in petroleum consumption and pollution and increases
in energy efficiency.
A December 2011 Minnesota study revealed that that the owner of a
light-duty truck getting 20 mpg who drove 20,000 miles per year paid $280 in state and $184 in
federal gas taxes. A 40-mpg hybrid owner paid $140 in state and $92 in federal gas taxes for
driving the same distance. An electric car owner paid $0.
[4] Clearly EV owners were not paying their fair share of
road construction and maintenance costs.
“The Rand Corporation has published a ‘primer’ titled
‘Mileage-Based User Fees For Transportation Funding,’ which lays out a strong case for a
miles-driven-based tax on all drivers. An example implementation would be to require
installing a device on a vehicle’s on-board diagnostics port (OBD-II) and transmit data
over a cellular data connection.
“The organization proposes a laundry list of potential benefits,
including:
“Reducing traffic congestion by varying the per-mile tax on the
time of day
“Reducing pollution,
by making more-polluting vehicles pay a higher per-mile tax
“Pay-as-you-drive automobile insurance
“Automated toll collection on bridges or toll roads
“Internet connectivity as a side benefit for vehicle passengers
“Improved vehicle safety, if implemented along with connected vehicle
systems currently being developed.” (Ref. 4)
Dedicated bicycle lanes are becoming more common on Massachusetts
highways and on the streets of its cities. Bicycles offer major commuting advantages,
including better health for the bicyclist, zero pollution, reduction in the use of
non-renewable energy sources, etc. Three factors determine the damage to the road that a
vehicle causes; weight, speed, and size. Bicycles are great on all three counts. But,
while the wear and tear on the roads caused by bicycles may be negligible, establishing
and maintaining dedicated bicycle lanes does cost money. The logical question to ask is
therefore: Should bike riders pay for the use of these dedicated bicycle lanes?
I contend that the answer to this question is yes. A small
registration fee and/or annual registration renewal fee would take care of the issue
and not be overly burdensome.
It’s become obvious that user-based revenue alone, i.e., gasoline
taxes, mileage driven fees, registration fees, etc. will not provide the amount of money
needed to address all transportation woes. To supplement the revenues raised by these means,
resort will have to be made to raising the rest of the funding through general forms of
taxation and fees. But, increasing user-based revenue still serves useful purposes: it
encourages the drive toward improved gasoline mileage; it boosts the introduction of more
and more non-gasoline powered vehicles; and it leads to more and more use of public
transportation in lieu of inefficient private vehicles that clog our highways and
streets.
The question of increasing gasoline taxes in Massachusetts turns
out to be much more than a local state issue. It involves neighboring states as well as the
country as a whole if one considers pollution and other environmental factors. “The pact
being developed by Massachusetts and other East Coast states to cap carbon emissions from
vehicles could add up to 17 cents to the price of a gallon of gas, according to the newest
estimates, but could also generate more than $500 million in revenue for state government
in Massachusetts.
“Leaders from a coalition of eastern states, including Massachusetts,
have been working for over a year to develop a regional ‘cap-and-invest’ program to reduce
carbon pollution from cars and trucks and generate the resources needed to expand clean
transit options and improve public health.
“The effort, known as the Transportation Climate Initiative,
has also become a central part of Gov. Charlie Baker’s transportation and climate agenda, with
the administration proposing to earmark half of all proceeds generated toward improving public
transit.
“But the coalition already began to splinter . . . in light of the
newly forecast economic impacts, with New Hampshire Gov. Chris Sununu announcing that his
state would not participate.
- - -
“While a straight gas tax hike may be less popular with business
leaders, TCI has significant backing from many of the major environmental and employer groups
in Massachusetts . . .
“Transit activists also see an opportunity in the program to generate
significant new resources to invest in improved public transit and build new sidewalks and
bicycle paths.
- - -
A MassINC poll . . . found that a majority of registered
voters in Massachusetts, Connecticut, Maryland, New York, New Jersey, Pennsylvania and Virginia
-- the largest states in the coalition - strongly or somewhat support their home state’s
participation in the Transportation and Climate Initiative.”
(Ref. 5)
Here in Massachusetts, the gas tax hike is up for debate. The need
for more transportation funding is not. Back in November of 2019, “Governor Charlie Baker . . .
said a ‘big increase’ in the gas tax would be a non-starter for his administration.
“Baker said he has already proposed policies that would bring more
money into the state’s transportation system without raising taxes, including a regional
effort to drive down carbon emissions from vehicles with a multi-state cap-and-invest program
that could lead to higher gas prices.
“The governor said taking action as a region would be ‘more
competitive’ than seeing Massachusetts raise its gas tax alone.
- - -
“ ‘I think from our point of view doing something on a regional
basis, rather than having Massachusetts do something on its own, is a more competitive
way to deal with this,’ Baker said . . .” (Ref. 7)
Several years ago (2007), I proposed a major increase in gasoline
taxes.[6] That was done for very different reasons
than apply today. In 2007, I was concerned with America’s dependence on foreign oil – a problem
that no longer exists. But even then, higher gasoline taxes could have helped to reduce pollution
and greenhouse gas emissions. Also, using the funds that would have been generated over the past
twelve years could have very significantly reduced the transportation woes that today are
bedeviling the Commonwealth of Massachusetts. But today is a new day. Will we here in the Bay
State start on the elimination of our road problems and will we coordinate this effort with
making the upgrades to our public transportation system that are so obviously needed? Whatever
is decided, will Massachusetts come up with a plan to distribute the costs equitably? Kicking
the problem down the road can only make our transportation problems worse and more intractable
in the future. The best time to begin solving the problem was yesterday. The next best time is
today. The worst time is tomorrow. No matter when we start, the price must be paid and we all
must pay our fair share.
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References:
- 2019 – Greater Boston’s MBTA STILL in Shambles, David Burton, Son of Eliyahu;
Article 366, 28 June 2019.
- Yes, Bicycle Riders Should Pay Their Fair Share, Walker Angell,
streets.mn, 24 October 2016.
- Gas Tax Increase Among Proposals Floated For Congestion Fixes, patch.com
, 31 October 2017.
- Taxing EVs: no gas means no gas tax, David Herron, chargedevs.com,
11 July 2013.
- Pact to fight carbon emissions with gas tax (up to 17 cents a gallon) already
splintering, Matt Murphy, SouthCoastTODAY, 18 December 2019.
- America Needs 4 to 7 Dollar-a-Gallon Gasoline, David Burton, Son of Eliyahu;
Article 17, 2 May 2007.
- Governor Baker Against ‘Big Increase’ in Gas Tax As Part of Massachusetts Transportation
Bill, Matt Murphy, newbostonpost.com, 5 November 2019.
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