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Transportation Infrastructure Fueled by Gas Tax Increases

One of the biggest topics of conversation in Massachusetts these days is the proposed additional 19 cent gas tax which would go toward roads, bridges, regional transit authorities and public transit improvements throughout the state. More than half of state and local bridges of 20 feet or longer are structurally deficient, while 82 percent of the Massachusetts Bay Transit Authority's (MBTA) rapid transit rail cars are in poor or marginal condition, according to a report by TRIP.  Furthermore, a 2007 report by the Massachusetts Transportation Finance Commission found that “the condition of our roads, bridges and transit systems are all in broad decline”¦we have no money for transit or highway enhancements or expansions without further sacrificing our existing systems and exacerbating our problems.”

Governor Deval Patrick’s 19 cent gas tax breaks down in the following way: 4 cents to prevent proposed toll increases; 6 cents to preserve MBTA services and prevent fare increases; 1 cent for "innovative gas and toll solutions;" 1.5 cents for regional transit authorities; 1.5 cents for targeted regional road projects; 3 cents for rail projects outside Boston; and 2 cents to end the practice of paying employee salaries with bond funds. The gas tax increase has been better received than an alternate proposal of $7 tunnel and turnpike tolls. Political supporters who recognize the economic and environmental benefits of infrastructure investment include an interesting mix of environmental, social justice, and business groups such as MassPIRG, Alternatives for Community and Environment, the Massachusetts Taxpayers Foundation, Massachusetts Business Roundtable, and the Greater Boston Chamber of Commerce. Even more intriguing is the fact that the business leaders actually support an even higher gas tax of 25 cents. Environmental and transit advocates favor a bill by Reps. Carl Sciortino and Alice Wolf to earmark a 12 cent gas hike that goes directly to the MBTA to put it on a stable financial footing for the long term given its $8 billion debt burden, the largest in the nation, and an estimated $19 billion of infrastructure maintenance costs over the next 20 years that are needed system-wide. Massachusetts has not had a gas tax increase since 1991, and the Governor is also looking at phasing in the gas tax increase, much like HB 644 that was just passed in the New Hampshire House of Representatives with a 15 cent hike on gasoline spread over three years.

Other states are also grappling with their own transportation budget woes. Last session, Minnesota legislators recognized the dire need to fund road and bridge construction after the collapse of the I-35 bridge and passed the first gas tax increase (SF 946) in twenty years, overriding Gov. Pawlenty’s veto.

Nationally, public transit ridership  rose to a high of 10.7 billion trips in 2008 (a record high since 1952), an overall increase of 4 percent from 2007, while vehicle miles traveled (VMTs) on our nation’s roads declined by 3.6 percent in 2008. Congressman Jim Oberstar, Chair of the Transportation and Infrastructure Committee in Congress recently called for a mix of increases on gas taxes and mileage taxes as a fix for states facing large transportation budget deficits, while the White House recently rejected the idea of a mileage tax. The National Surface Transportation Infrastructure Financing Commission has also suggested a temporary 10-cent increase to be followed by a roughly 2-cent fee-per-mile charge as the main revenue for all transportation projects by 2020. States are also examining alternatives to gas tax increases:

  • Oregon is discussing both a gas tax and a gas tax alternative in the form of taxing miles driven after a pilot program conducted in 2007 that replaced the state's 24 cent per gallon tax with a 1.2 cent per mile charge. However, unlike the gas tax, this option treats fuel efficient vehicles and gas-guzzling Hummers equally, which removes an environmental and economical incentive to buy greener cars.
  • North Carolina’s Research Triangle is currently running a mileage tax pilot program of 200 participants to obtain concrete data. 
  • Rhode Island: More than half of the state’s roads are in fair, poor or “failed” condition, according to the Department of Transportation, and 164 bridges of 772 are classified as structurally deficient. The Governor’s Blue Ribbon Panel on Transportation suggests a combination of increased tolls, fuel taxes, car registration fees, and a new mileage tax.
  • Michigan is looking at moving from a flat rate tax to a percentage tax on the overall cost which would fluctuate with gasoline prices.

A steady funding stream for transportation infrastructure that works means that workers can get to their jobs easily without the hassle of shoddy roads and bridges, $7 dollar tolls, and broken down trains.