and the
Citizens Economic Research Foundation

October 9, 2006

From CLT: Your source for institutional memory

Gas tax increase?  Somebody has to be kidding!

According to the Boston Sunday Globe, the Transportation Finance Commission wants a 9-cent-a-gallon increase in the state gas tax to pay for infrastructure projects.

Here are some things everyone needs to know.

Item:  The present state gas tax is already above the national average. Over the years, it has been adjusted to bring in maximum revenues. When it gets more money by being charged as a percentage of the gas price, that’s how the state charges it. When it gets more money by being a flat cost per gallon, the state changes it to a flat tax.

The money is supposed to be used for highway maintenance, but in reality is often diverted. The Dukakis 10 cent a gallon increase in 1990 was used for reducing the state’s operating deficit. Politicians deliberately defer maintenance, figuring that if they get short of money for their own pet projects, they have "the infrastructure excuse" to raise taxes.

Item:  Massachusetts is one of the few states in the nation that has an auto excise, which is supposed to be used to maintain roads. How do other states have better roads than ours when we have all these taxes?!

Item:  When the Big Dig was beginning, and the Dukakis administration was asked (by the Massachusetts Municipal Association and others) if its cost would divert money from other state infrastructure projects, the Dukakis administration said it would not. We were told that since the federal government was paying 90% of the project, the state could easily handle the other 10% without hurting other state roads and bridges. The concerns of those of us who argued that the 90% wasn’t certain and against the rosy scenario were cavalierly dismissed. And then the Big Dig sucked up the local infrastructure money.

Item:  The 13-member Transportation Commission. We don’t know them all but we do know three of them.

Jim Aloisi:  from the Turnpike Authority that has been sucking up all that infrastructure money. However, we do support another possible Commission recommendation to transfer the Tobin Bridge to the Turnpike. The tolls can then be used for bridge maintenance and other infrastructure projects, instead of sick leave and MassPort agency vehicles; this will take some of the momentum out of the recommendation for a gas tax increase.

Michael Widmer:  from the so-called Massachusetts Taxpayers Foundation, which has supported an expansion of the sales tax and opposed Proposition 2˝ and the income tax rollback, and now sets the stage for this gas tax hike with its recent report on deteriorating roads. Should have to change its name to the Massachusetts TaxHike Foundation.

And Harold Hestnes, cited as "a long-time Republican civic leader" who is the "driving force behind the gas tax hike proposal". H.H. was a top advisor to Bill Weld when he ran for Governor in 1990. One week after Weld won, having taken the "no new taxes" pledge, Harold Hestnes announced that he was recommending a tax package that would increase the sales tax from 5% to 6% – "temporarily" of course. To the best of my knowledge, he was never heard from again as a Weld advisor on tax policy.

Instead, Weld used his pledge to prevent another tax increase, forcing the Legislature to pass reforms and control spending instead.

Governor Romney will do the same, as would Kerry Healey. Deval Patrick refuses to take the pledge.

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