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Post Office Box 1147
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Marblehead, Massachusetts 01945
▪ (781) 639-9709
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
46 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
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CLT UPDATE
Thursday, February 27, 2020
Long-Threatened House Transportation Tax Package Released
Jump directly
to CLT's Commentary on the News
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As
the House zeroes in on a transportation financing proposal,
one of House Speaker Robert DeLeo's top deputies said
Tuesday that the bill could be a "generational gamechanger"
for transportation across the state.
Rep. Sarah Peake, a Provincetown Democrat and division chair
in DeLeo's leadership team, told a crowd of transportation
reform and environmental advocates that the forthcoming bill
will parallel, at least in its impact, the seven-year, $1.5
billion public education funding law signed last year in its
impact.
"Just as the Student Opportunity Act was a
once-in-a-lifetime, generational improvement for our public
education, I believe and I am incredibly optimistic that
this transportation bill is similarly going to be a
generational gamechanger in the way we fund, and almost more
importantly, the way we provide public transit to the
citizens of Massachusetts," Peake said at a rally.
State House News Service
Tuesday, February 25, 2020
Peake: Transpo Bill Could Be “Generational Gamechanger”
A
5-cent increase in the gas tax and higher corporate taxes
will be the centerpiece of a major revenue bill that House
Democratic leaders will ask legislators to vote on next week
as part of a package that could raise over $600 million in
new funding for transportation.
The
long-awaited revenue proposal would also hike fees on
ride-hailing trips taken through services like Uber and Lyft
and eliminate what Majority Leader Ron Mariano called a
"glaring kiss" to the rental car industry by getting rid of
their exemption — worth $110 million — from sales taxes on
the purchase of new vehicles.
House Speaker Robert DeLeo laid out the proposal — which
does not spell out as much new spending as it seeks in
revenue — Wednesday morning as he prepared to present it to
House Democrats in a private caucus later in the day.
The
package, which is projected to generate between $522 million
and $612 million in new annual revenue, will be used,
leaders said, to shore up existing operating budgets for the
MBTA and regional transit authorities, and backstop a
multi-billion capital borrowing plan.
DeLeo called it a "bridge" to the proposed 2022 ballot
question to add a surtax on household income over $1
million, which has been projected to be worth another $2
billion for transportation and education.
"When it comes to transportation, revenue can't wait," DeLeo
said.
The
revenue bill and a $14.5 billion transportation bond bill
both will be taken up next week, the speaker said.
Transportation Committee Chairman William Straus said that
Gov. Charlie Baker's borrowing bill had been trimmed by
House leaders by roughly $3.5 billion because they do not
believe that the state can afford the $18 billion proposed
by Baker without additional revenue coming into state
coffers.
The
bill proposes to raise the state's 24-cent gas tax to 29
cents per gallon, generating an estimated $150 million to
$175 million in new revenue. The tax on diesel fuel, which
is currently the same as regular gasoline, would climb 9
cents to 33 cents....
Revenue Committee Chairman Mark Cusack said that for the
first time since 1989, House leaders will propose increasing
the $456 minimum tax paid by corporations. Cusack said that
between 60 percent and 70 percent of all corporations in
Massachusetts pay the minimum, and that 403 companies in
2016 with over $1 billion in sales paid just $456 in
corporate excise taxes.
The
House plans to create a corporate minimum tax structure with
nine tiers. On the low end, companies with less than $1
million in sales would see no increase, but at the top tier
companies with over $1 billion would pay a minimum of
$150,000.
The
increased corporate minimum tax would generate $100 million
to $150 million in new revenue....
However, House Democratic leaders do not intend to spend the
new revenue dollar-for-dollar immediately to address aging
public transit, crumbling roads and bridges, and widespread
traffic that prompted crafting of the package.
Instead, they want to use most of the new money — estimated
between $522 million and $612 million per year — to fill the
state's accounts more robustly, allowing for larger annual
budgetary injections into public transit and road
maintenance assistance each year and helping to pay for
capital projects the Baker administration suggested funding
through borrowing....
Straus said Baker planned to rely only on "two dangerous
revenue sources" — the still-in-development Transportation
and Climate Initiative and expansion of grant anticipation
notes — to secure bonds for billions of dollars in proposed
capital spending.
"We're in a situation where we're hoping this revenue
package passes and goes into implementation on Jan. 1, 2021,
but we're not at that point yet, and we had to be mindful of
that," said Rep. Aaron Michlewitz, chair of the House Ways
and Means Committee.
Straus said that while it's too risky now to assume new
money from a regional cap-and-trade program on vehicle
emissions that Baker is still trying to negotiate with other
states, the bill does direct the administration to find a
way to offset the proposed 5-cent gas tax increase on
drivers if TCI does lead to higher gas prices for consumers.
State House News Service
Wednesday, February 26, 2020
Gas, Corporate, TNC Taxes Anchor House Transpo $$$ Bill
Architects Say It Could Raise $600 Million
Almost a year in the making, expectations for the roughly
$600 million tax bill rolled out Wednesday by House Speaker
Robert DeLeo to pay for improvements in the state's
transportation system were high, and varied.
Business groups were pushing for a major gas tax increase
and a one-year study of congestion pricing and tolls.
Progressive lawmakers wanted corporations to help pay for
public transit and road improvements. And Gov. Charlie Baker
just wanted authorization to borrow more money to beef up
the state's capital program.
In
the end, keeping everyone happy proved difficult.
"I
think we tried to keep everyone who uses our roads in some
fashion involved with the payment of it," DeLeo said
Wednesday, after presenting the plan to House Democrats in a
private caucus.
The
plan calls for increasing the gas tax by 5 cents for most
drivers and 9 cents for diesel. It also raises fees on Uber
and Lyft rides by up to $145 million, and asks corporations
to pay as much as $150 million in higher minimum taxes,
which have not been adjusted in 30 years.
House leaders are also proposing to eliminate an exemption
for rental car companies that has allowed them to avoid
paying the sales tax on new vehicles purchased in
Massachusetts for their rental fleets.
"That they were able to come up with a bill was certainly an
accomplishment," said Rep. Tricia Farley-Bouvier, a
Pittsfield Democrat and co-chair of the House Progressive
Caucus....
"We
are looking at the details of it, but I can say we are
pleased that the corporate minimum tax, and that it's
tiered, is in there. We were looking primarily that there
would be shared responsibility, and that comes through in
this bill," she said....
DeLeo, on several occasions Wednesday, described the scale
of the bill as a "bridge" to the future when voters might
have the chance in 2022 to weigh in on a ballot question to
generate $2 billion by adding a surtax on household income
over $1 million.
The
speaker also said it is "iffy," but still possible, that a
regional cap-and-trade program known as the Transportation
and Climate Initiative being negotiated by Gov. Baker with
other states for vehicle emissions will general significant
new money for transportation....
Rep. Tami Gouveia, of Acton, said that like other
progressives she was encouraged to see businesses being
asked to help pay for the infrastructure they benefit from.
"As
a progressive Democrat and as a person who represents a
district that cares a lot about climate change, I am also
glad to see a little bit of an increase in the gas tax,"
Gouveia said. "I think that's an important aspect to trying
to change behavior, but with having this balanced approach,
I think it's going to be a lot more fair so we're not
burdening our working families and our middle-income
families with bearing the brunt of where the revenue sources
come from." ...
The
Greater Boston Chamber of Commerce, which made its own
recommendations for revenue last year at the urging of the
speaker, said it supports the 5-cent gas tax increase, TNC
fees and the commission to study congestion pricing, but has
serious concern with the increase in minimum corporate
taxes.
The
House proposal would create a tiered structure, increasing
the corporate excise tax for all companies with over $1
million in sales from its current level of $456. The top
tier of companies with over $1 billion in sales would pay a
minimum excise tax of $150,000.
"This is a troubling signal to business in a time when
cities and states around the country are competing for jobs
and economic growth," the chamber said in a statement....
Rep. Sarah Peake (D-Provincetown), a division chair on
DeLeo's leadership team, on Tuesday said the transportation
proposal had the promise to be a "generational gamechanger,"
and after the bill was released, said its specifics fulfill
that promise. "I think it's genius in the way it
appropriately calls on different constituencies to
contribute," Peake said....
House members will have until Friday at 5 p.m. to file
amendments to both the tax bill and a separate $14.5 billion
transportation bond bill. The House plans to debate the
revenue bill on Wednesday, and the bond bill on Thursday....
House Minority Leader Brad Jones said . . . he has not been
convinced of the need for new revenue given the potential $2
billion that could be generated for transportation and
education by the still-pending income surtax proposal.
Jones also slammed Democratic leaders for arguing they
needed to shave $3.5 billion off Baker's original $18
billion bond bill because they did not have the revenue to
support it.
"How come that concern didn't come up when we did the
speaker's GreenWorks bill earlier in the session?" Jones
said, referring to a 10-year, $1.3 billion climate
resiliency grant program funded by bonds the House approved
in July. "Is that because the speaker wanted it, so it
didn't make any difference? How come the state's finances
didn't matter when you're doing your bill?" ...
Rep. Paul Frost, an Auburn Republican and third assistant
minority leader, said he had yet to read the bill, but
almost didn't need to.
"Are they going to increase taxes?" he asked. Assured it
did, Frost replied, "Then I oppose it. Simple."
State House News Service
Wednesday, February 26, 2020
House Transpo $$$ Bill Called Both “Genius” And
“Ill-Advised”
Progressive Dems Pleased To See Businesses Asked To Chip In
A
hike in the state gas tax, a bump in ride-hailing fees and
costs for corporations are all part of a House proposal to
rake in up to $612 million from taxpayers to fix the state’s
transportation woes.
“When it comes to our transportation system, revenue can’t
wait. Revenue can’t wait any longer,” Speaker Robert DeLeo
told reporters Wednesday. “Our residents, our communities
and our economy are dependent on an immediate source of
revenue.”
The
legislative package, composed of gas tax hikes, increased
ride hailing fees, a rise in the corporate minimum tax of up
to $150,000 and an elimination of a rental car sales tax
exemption worth $110 million, was unveiled by DeLeo, Ways
and Means Chair Aaron Michlewitz, Majority Leader Ronald
Mariano, Transportation Chairman William Straus and Revenue
Chairman Mark Cusack.
The
legislation calls for a 5 cent gas tax increase, bringing it
up to 29 cents per gallon, and a 9 cent increase on diesel
fuel to 33 cents per gallon. State officials estimate that
the gas tax increase will raise between $150 million and
$175 million while the diesel tax bump will bring in $32
million.
The Boston Herald
Wednesday, February 26, 2020
Taxes on gas, ride-hailing and businesses all in House
transportation plan
Leaders in the Massachusetts House on Wednesday unveiled an
approximately $600 million transportation revenue bill.
The
bill will raise the gas tax, increase the minimum corporate
tax paid by large corporations, increase fees on
ride-hailing services, and force rental car companies to pay
sales tax on the cars they buy.
Lawmakers say new money is necessary to address the state’s
traffic and transit woes. “Our residents, our communities
and our economy are dependent upon an immediate source of
revenue,” said House Speaker Robert DeLeo.
The
bill will be the subject of intense lobbying from business
and transportation interests over the coming months. Here
are a few flash points in the debate....
Businesses were among the top cheerleaders urging lawmakers
to raise transportation revenue, saying their employees were
having trouble commuting to work. But they are less enamored
with paying for it.
Rick Dimino, president of the business group A Better City,
a strong advocate for transportation funding, urged
lawmakers to reconsider the corporate tax increase and focus
on revenue sources directly tied to transportation. Dimino
said transportation taxes and corporate taxes are “apples
and oranges.” He said focusing on transportation-related
revenue – like tolls or congestion pricing – is necessary to
ensure reliable funding and change behavior.
The
Greater Boston Chamber of Commerce similarly called the
corporate minimum tax increase “problematic.” “This is a
troubling signal to business in a time when cities and
states around the country are competing for jobs and
economic growth,” chamber officials said in a statement.
Chris Geehern, a spokesman for Associated Industries of
Massachusetts, said his organization is still gathering
feedback from members, but AIM believes any taxes raised to
fund transportation should be linked directly to
transportation.
On
the other side, Raise Up Massachusetts, a labor-backed
coalition, argues that companies should pay more. “Large
corporations make massive profits by using our
transportation infrastructure to move their goods and
customers, and they must pay their share to help fund
transportation improvements,” Raise Up said in a
statement....
Lawmakers are growing increasingly uncertain about the
future of the Transportation and Climate Initiative, a
regional cap-and-trade system that would put a price on
gasoline emissions.
Gov. Charlie Baker is a strong supporter of TCI. The House
bill does not count on any TCI money.
DeLeo called the future of TCI “very iffy,” noting that no
other state has committed to it. “It does not appear the TCI
concept is catching on as we’d hoped it would,” DeLeo said.
“That could change. If it does change, we’d adjust this
accordingly.”
House Transportation chair William Straus said lawmakers are
uninterested in “double taxation,” and the bill recommends
an offset, so if TCI goes into effect, the first five cents
of its cost would be covered by the gas tax increase.
That decision may please drivers at the pump, but it upsets
Chris Dempsey, director of the advocacy group Transportation
for Massachusetts. Dempsey would prefer two separate tax
increases, arguing that Massachusetts currently has a lower
gas tax rate than most states in the region. “We think TCI
has the potential to be a transformational policy, and the
House language seems to diminish the potential importance
and value of TCI both for transportation and climate moving
forward,” Dempsey said....
Several pro-transportation advocates described the bill as a
start and said they wished it went further.
Former transportation secretary James Aloisi, a regular
CommonWealth contributor, said he is “underwhelmed.” “We
need a transportation or revenue bill that produces much
more revenue than this bill,” Aloisi said. “We’re talking
about a need that’s in the billions of dollars. This doesn’t
get you to three-quarters of a billion.”
On
the other hand, Paul Craney of the conservative
Massachusetts Fiscal Alliance said the additional taxes go
too far. “These measures make it harder for people to make
their home here and do business in the state and will only
hurt the middle class—especially workers who have to drive,”
Craney said.
Senate President Karen Spilka indicated that senators, who
have formed their own transportation working group, will
look at other possibilities, such as lower transit fares for
low-income residents. “The Senate believes we need to take
action to change behavior to reduce congestion, provide fare
relief to low-income residents, and expand and improve
public transportation in every region,” Spilka said.
CommonWealth
Wednesday, February 26, 2020
Five takeaways on transportation bill
House proposal sure to unleash fierce jockeying by interest
groups
Critics are blasting the cost of living increase that would
accompany gas tax hikes, boosted fees for ride-hailing
services and costs to corporations laid out in a House
proposal to rake in over a half a billion taxpayer dollars
to fix the state’s transportation woes.
“It
was just six years ago that the people of Massachusetts
spoke out clearly that they didn’t feel that Beacon Hill was
looking out for their best interests in raising the gas
tax,” former state representative and U.S. Senate candidate
Geoff Diehl told the Herald. “It seems like motorists and
commuters who can least afford it right now are being asked
to foot the bill for a lack of scrutiny and management of
transportation dollars.”
Diehl and Holly Robichaud, a Republican strategist who
successfully fought to repeal a gas tax hike in 2014, argued
that the Legislature is ignoring the will of the people with
the two bills proposed by Speaker Robert DeLeo and some of
his top deputies Wednesday.
“Beacon Hill is obviously tone-deaf. The people spoke
clearly on gas tax hikes,” Robichaud said. “They did not
pass it last year so we could not repeal it. Now they are
passing it in an election year, so we will repeal them.” ...
“When it comes to our transportation system, revenue can’t
wait. Revenue can’t wait any longer,” DeLeo told reporters
when unveiling the legislation. “Our residents, our
communities and our economy are dependent on an immediate
source of revenue.”
Exactly how that money will be spent is ambiguous, with the
only new revenue designations accounting for $27 million to
the MBTA and $27 million to the Regional Transit
Authorities.
“Massachusetts is a wonderful state, if you can afford it.
Under the Speaker’s plan, fewer taxpayers will be able to
keep up with the increased cost of living,” Massachusetts
Fiscal Alliance Spokesman Paul Craney said. “These measures
make it harder for people to make their home here and do
business in the state and will only hurt the middle class —
especially workers who have to drive.”
The Boston Herald
Thursday, February 27, 2020
Critics rip DeLeo’s gas tax hike proposal
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Chip Ford's CLT
Commentary
"A 5-cent increase in the gas tax and
higher corporate taxes will be the centerpiece of a
major revenue bill that House Democratic leaders will
ask legislators to vote on next week as part of a
package that could raise over $600 million in new
funding for transportation," the State House New Service
reported yesterday. The gas tax is estimated to
rake in an additional $150 million to $175 million in
new revenue.
Also included in the transportation revenue bill is an
increase in the corporate minimum tax, which is
estimated to bring in $100 million to $150 million in
new revenue.
I must admit
this is a delicious irony. The "cadre of business
groups" pushing for higher taxes and more revenue for
transportation spending got its wish
— proving that you must be
careful what you wish for. They didn't count on
having to pay a whopping increase out of so many of
their own pockets.
On July 12,
2019 the State House News Service reported ("Chamber
chief sizes up Hill's approach to transpo 'crisis'"):
With lawmakers in the House
and Senate gearing up to take a run at a broad
transportation financing package in the next
several months, a cadre of business groups is
working on a parallel path to influence whatever
legislation eventually emerges.
Members of the
Massachusetts Business Coalition on
Transportation, a statewide group of two dozen
business organizations that banded together
earlier this year, met Wednesday with House and
Senate leaders to check in with each branch and
get a sense of what to expect once legislators
put pen to paper....
Business groups have
increasingly decried the Boston area's public
transportation woes as a hindrance to economic
growth. Traffic and congestion on the roads make
for long and frustrating commutes by car, and
the unpredictable nature of public
transportation frequently makes workers late to
their jobs....
"The general proposition is
that we want a transportation system that is
statewide, that is reliable and effective
whatever that means in different regions of the
state, and that supports the existing economy
and the growth of the economy throughout the
commonwealth, and a transportation system that
not only in and of itself supports the movement
of people and goods but also enables us to make
progress on key public policy issues including
climate, housing, economic inequities," Rooney
said. "There's a whole host of public policy
issues that depend on a reliable transportation
system." ...
Asked what kind of
measurable outcomes he would like to see in any
eventual bill, Rooney said it is important that
the people who will be required to pay more to
fund transportation be able to see actual
improvements in service. He described a "three-R
approach: revenue with results and reforms."
The House
transportation revenue bill will create "a tiered
structure, increasing the corporate excise tax for all
companies with over $1 million in sales from its current
level of $456. The top tier of companies with over $1
billion in sales would pay a minimum excise tax of
$150,000."
Businesses were among the
top cheerleaders urging lawmakers to raise
transportation revenue, saying their employees
were having trouble commuting to work. But they
are less enamored with paying for it.
Rick Dimino, president of
the business group A Better City, a strong
advocate for transportation funding, urged
lawmakers to reconsider the corporate tax
increase and focus on revenue sources directly
tied to transportation. Dimino said
transportation taxes and corporate taxes are
“apples and oranges.” He said focusing on
transportation-related revenue – like tolls or
congestion pricing – is necessary to ensure
reliable funding and change behavior.
The Greater Boston Chamber
of Commerce similarly called the corporate
minimum tax increase “problematic.” “This is a
troubling signal to business in a time when
cities and states around the country are
competing for jobs and economic growth,” chamber
officials said in a statement.
Chris Geehern, a spokesman
for Associated Industries of Massachusetts, said
his organization is still gathering feedback
from members, but AIM believes any taxes raised
to fund transportation should be linked directly
to transportation.
The House bill
is expected to "generate between $522 million and $612
million in new annual revenue." Of that, "the
increased corporate minimum tax would generate $100
million to $150 million in new revenue."
I'd call that
the revenue advocates of the business group cadre's
"fair share."
The State
House News Service reported:
House Minority Leader Brad
Jones said . . . he has not been convinced of
the need for new revenue given the potential $2
billion that could be generated for
transportation and education by the
still-pending income surtax proposal.
Jones also slammed
Democratic leaders for arguing they needed to
shave $3.5 billion off Baker's original $18
billion bond bill because they did not have the
revenue to support it.
"How come that concern
didn't come up when we did the speaker's
GreenWorks bill earlier in the session?" Jones
said, referring to a 10-year, $1.3 billion
climate resiliency grant program funded by bonds
the House approved in July. "Is that because the
speaker wanted it, so it didn't make any
difference? How come the state's finances didn't
matter when you're doing your bill?"
Of course it
is! Rep. Jones has been on Beacon Hill long enough
to not need to ask that silly question.
In my CLT
Update commentary of July 25, 2019 ("Speaker's
$1.3 billion borrow-and-spend GreenWorks bill streaks
through House") I wrote:
On Monday I wrote ("Budget
whizzes to Gov's desk"):
Tomorrow the House will
bring up and debate Speaker Bob DeLeo's
personal "GreenWorks" bill (H-3987)
advocating for "climate mitigation" or
"climate resiliency" or whatever we're
calling it today. He intends for the state
to borrow $1.295 billion over twenty years
(apparently including the cost of interest)
to spend $1 billion. To accomplish this he
intends to suspend the state's debt ceiling.
What The Speaker For
Life wants so badly The Speaker For Life
will get. Expect a party-line vote at best
with all Democrats voting in lockstep with
the Speaker as usual, but don't be surprised
or too disappointed if many Republicans join
in.
Speaker DeLeo's bill
streaked through the House yesterday without
opposition, 157-0. More than "many Republicans"
joined his parade. They all did.
What The Speaker For Life
wants so badly The Speaker for Life gets
— without opposition or dissent. Committee
chairmanships and other appointments, with
accompanying lucrative "stipends," rise or fall,
come or go at his whim.
Commonwealth
(magazine) reported:
DeLeo called the future of
TCI “very iffy,” noting that no other state has
committed to it. “It does not appear the TCI
concept is catching on as we’d hoped it would,”
DeLeo said. “That could change. If it does
change, we’d adjust this accordingly.”
House Transportation chair
William Straus said lawmakers are uninterested
in “double taxation,” and the bill recommends an
offset, so if TCI goes into effect, the first
five cents of its cost would be covered by the
gas tax increase.
"Baker's
Boondoggle," the Transportation Climate Initiative
(TCI), is "very iffy." That's a good bit of news
coming from the House Speaker, but don't think for a
moment — should it be
imposed by Royal Governor Baker's executive fiat
—
that one state of the multistate compact can
—
or will
—
change the formula to exclude its own state's gas
tax hike. Lawmakers such as Rep. Strauss now may
proclaim disinterest in "double taxation" to get what
they want with as little resistance as they can
generate, but let me remind you of how long they mangled
a promise that the income tax would be hiked "only
temporarily" back in 1989. We finally managed to
get it fully rolled back to 5 percent only this year
—
three decades later! No Lucy, we're not falling
for that again and kicking that football one more time.
Rake in ever
more revenue from taxpaying suckers by any means
necessary
—
but don't take even a peek at how it's being squandered
and will continue to be wasted by far worse than almost
every other state in the nation. Nowhere in this
bill is there even a passing mention of reining in the
plunder and mismanagement.
In the CLT
Update of August 24, 2019 ("Mass.,
#46, spent 304% higher than national average on its
highways") I closed my commentary with:
"Remember this when the Legislature returns next week
from its month-long vacation and pivots to demands for
more and higher taxes to fund 'the state's deteriorating
infrastructure,' as has been promised. We surely
will."
Consider the
following that pledged reminder:
Note the stark difference between Massachusetts
— with every tax and fee known to mankind — and
New Hampshire. As we were
recently reminded by Granite State Governor
Sununu, his state doesn't have an income
tax, a sales tax, or a capital gains tax.
Anyone who’s driven north over the border
appreciates the remarkably better highways
across the line. For further comparison, this
year I've also included my favorite "sanctuary
state" of Kentucky to provide further insight
into the Bay State's steadfast problem of
grossly bloated, willfully wasted spending of
taxpayers' money.
|
Capital and
Bridges Disbursements per State-Controlled
Lane-Mile |
|
Massachusetts |
$92,972 |
|
New Hampshire |
$27,822 |
|
Kentucky |
$26,163 |
|
National
Average |
$36,681 |
|
Maintenance
Disbursements per State-Controlled Lane-Mile |
|
Massachusetts |
$25,033 |
|
New Hampshire |
$17,951 |
|
Kentucky |
$7,372 |
|
National
Average |
$11,929 |
|
Administrative
Disbursements per State-Controlled Lane-Mile |
|
Massachusetts |
$23,950 |
|
New Hampshire |
$5,260 |
|
Kentucky |
$490 |
|
National
Average |
$4,501 |
|
Total
Disbursements (including bond principal and
interest, etc.) per State-Controlled Lane
Mile |
|
Massachusetts |
$216,066 |
|
New Hampshire |
$64,176 |
|
Kentucky |
$45,829 |
|
National
Average |
$71,117 |
|
Source:
Reason Foundation, August 22, 2019, "24th
Annual Highway Report" https://reason.org/wp-content/uploads/24th-annual-highway-report-2019.pdf |
ATTENTION:
"House members will have until Friday at 5 p.m.
to file amendments to both the tax bill and a separate
$14.5 billion transportation bond bill. The House
plans to debate the revenue bill on Wednesday, and
the bond bill on Thursday...."
"Debate" means pass.
Right Now
is the time to call, to contact your state
representative and weigh in if you have any suggestions,
or objections!
Find Your State Representative Here
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Chip Ford
Executive Director |
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State House
News Service
Tuesday, February 25, 2020
Peake: Transpo Bill Could Be “Generational
Gamechanger”
Spilka: "Hopefully the House Will Do Something
Soon"
By Chris Lisinski
As the House
zeroes in on a transportation financing
proposal, one of House Speaker Robert DeLeo's
top deputies said Tuesday that the bill could be
a "generational gamechanger" for transportation
across the state.
Rep. Sarah Peake, a Provincetown Democrat and
division chair in DeLeo's leadership team, told
a crowd of transportation reform and
environmental advocates that the forthcoming
bill will parallel, at least in its impact, the
seven-year, $1.5 billion public education
funding law signed last year in its impact.
"Just as the Student Opportunity Act was a
once-in-a-lifetime, generational improvement for
our public education, I believe and I am
incredibly optimistic that this transportation
bill is similarly going to be a generational
gamechanger in the way we fund, and almost more
importantly, the way we provide public transit
to the citizens of Massachusetts," Peake said at
a rally.
People from across the state, organized by the
coalition Transportation for Massachusetts,
packed a hearing room before delivering a "call
for action" to lawmakers, urging them to respond
to public transit networks that experience
frequent disruptions and roadway congestion
that's among the worst in the nation.
While the House appears close to unveiling a
bill, its contents remain unknown aside from a
likely increase in the state's
24-cents-per-gallon gasoline tax and a potential
hike on ride-hailing service fees.
Speakers at Tuesday's event said those two
components, along with altering tolls to
incentivize off-peak travel and other local
revenue options, should be considered. Activists
are also pressing for more toll roads, saying
the current landscape is not equitable since
tolls are limited to the turnpike and certain
tunnels.
While any revenue ideas the House passes will
need agreement from the Senate, Senate President
Karen Spilka on Tuesday described new revenue as
a "byproduct" that would accompany policy
proposals aimed at getting people to drive less,
reducing congestion and improving and expanding
public transportation.
Noting a revenue bill must begin in the House,
Spilka said during an appearance on WGBH, "The
bottom line is that the Senate will be focusing
on policy measures that will make public
transportation more affordable, more reliable,
more convenient, frequent and safe. Whatever
revenue we do will be driven by policy
decisions."
House leaders have been wrestling with the
complexity of assembling a revenue package for
months, mindful of Republican Gov. Charlie
Baker's opposition to raising the gas tax.
"Hopefully the House will do something soon,"
Spilka said. "And we've been working on it.
We'll see what they do. But yeah, it's gettting
late so we need to take action."
Chris Dempsey, executive director of
Transportation for Massachusetts, said the
state's gas tax has increased 14 percent since
1991 while MBTA fares have jumped about 300
percent during that same span.
"We cannot deal with the traffic congestion,
with the broken transit system, with the air
pollution and greenhouse gases, and we need to
fix these problems," Dempsey told the News
Service. "This is about encouraging the House
and the Senate to show some bold leadership on
this, and we are hopeful and optimistic that
there is some action from especially the House
coming soon."
Supporters called for a swath of policy changes
and investments to come with whatever new
funding would be generated under the reform,
particularly aimed at increasing service to get
cars off the road and achieving better transit
equity.
DeLeo said Monday that a bill release will come
"sooner rather than later" and that he intends
to give lawmakers about a week to review its
contents before voting.
Peake told attendees Tuesday that the House Ways
and Means Committee is preparing to unveil a
proposal.
"This legislation that I think is about to pop
out of the House Ways and Means Committee is our
opportunity to make a generational change in the
way we fund and the way we provide public
transit to each and every one of the close to
seven million people in Massachusetts," she
said.
The advocacy push came one day after MBTA
officials offered early projections that the
agency faces a roughly $90 million budget
shortfall in fiscal year 2021, which begins July
1.
That gap comes even with a potential jump in
funding. Based on sales tax acceleration and
higher transportation network company fees, Gov.
Baker's fiscal year 2021 budget bill would
increase state allocation to the MBTA by about
$135 million.
However, T officials have targeted significant
investments — about $160 million for additional
staff recommended in a safety panel report,
offices to plan long-term rail and bus
transformations, and fare-system reforms — for
which their budget-writers warn they currently
do not have enough money.
"In terms of our budget, we cannot afford all
$160 million," MBTA Chief Administrative Officer
David Panagore said at a Monday board meeting.
"We have to find $90 million worth of cuts."
Some at Tuesday's event criticized lawmakers and
the Baker administration for not acting sooner
or for casting doubt on the state's ability to
pay for new programs and investments.
LivableStreets Alliance Executive Director Stacy
Thompson said Massachusetts needs a
"comprehensive funding package" to address the
nearly 500 structurally deficient bridges,
worst-in-the-nation traffic, and gaps in service
that force black riders to spend an average of
64 more hours on the bus every year than white
riders.
We can fix this," she said. "But it won't come
with a tweak there or a nudge there."
Peake, whose district includes part of the Cape
Cod Regional Transit Authority, said she wants
to see the legislation boost funding and
establish a dedicated funding stream to the 15
RTAs across Massachusetts.
She said House Ways and Means Committee Chair
Rep. Aaron Michlewitz called her on Jan. 1 and
asked her to set up a meeting with the
Legislature's RTA Caucus to discuss funding the
agencies.
The state allocates one percent of sales tax
revenue to the MBTA each year, but RTAs do not
have the same reliable source, which Peake said
makes it more challenging for them to plan
significant service improvements.
"We have seen many of the regional transit
authorities kind of wither on the vine," Peake
told the News Service. "We're really at a
critical juncture with them now. In order for
people to want to ride the bus, they have to
know: is it coming with frequency, is it
affordable, and is it reliable? All of those
things — frequency, reliability, affordability —
all get down to: how much are we funding them,
and is it adequate for them to do the work and
job they need to do?"
— Michael P.
Norton contributed reporting
State House
News Service
Wednesday, February 26, 2020
Gas, Corporate, TNC Taxes Anchor House Transpo
$$$ Bill
Architects Say It Could Raise $600 Million
By Matt Murphy and Chris Lisinski
A 5-cent increase in the gas tax
and higher corporate taxes will be the
centerpiece of a major revenue bill that House
Democratic leaders will ask legislators to vote
on next week as part of a package that could
raise over $600 million in new funding for
transportation.
The long-awaited revenue proposal would also
hike fees on ride-hailing trips taken through
services like Uber and Lyft and eliminate what
Majority Leader Ron Mariano called a "glaring
kiss" to the rental car industry by getting rid
of their exemption — worth $110 million — from
sales taxes on the purchase of new vehicles.
House Speaker Robert DeLeo laid out the proposal
— which does not spell out as much new spending
as it seeks in revenue — Wednesday morning as he
prepared to present it to House Democrats in a
private caucus later in the day.
The package, which is projected to generate
between $522 million and $612 million in new
annual revenue, will be used, leaders said, to
shore up existing operating budgets for the MBTA
and regional transit authorities, and backstop a
multi-billion capital borrowing plan.
DeLeo called it a "bridge" to the proposed 2022
ballot question to add a surtax on household
income over $1 million, which has been projected
to be worth another $2 billion for
transportation and education.
"When it comes to transportation, revenue can't
wait," DeLeo said.
The revenue bill and a $14.5 billion
transportation bond bill both will be taken up
next week, the speaker said. Transportation
Committee Chairman William Straus said that Gov.
Charlie Baker's borrowing bill had been trimmed
by House leaders by roughly $3.5 billion because
they do not believe that the state can afford
the $18 billion proposed by Baker without
additional revenue coming into state coffers.
The bill proposes to raise the state's 24-cent
gas tax to 29 cents per gallon, generating an
estimated $150 million to $175 million in new
revenue. The tax on diesel fuel, which is
currently the same as regular gasoline, would
climb 9 cents to 33 cents.
Straus said that even with the per-gallon taxes
Massachusetts would have a lower gas tax than
all bordering states, with the exception of New
Hampshire.
Revenue Committee Chairman Mark Cusack said that
for the first time since 1989, House leaders
will propose increasing the $456 minimum tax
paid by corporations. Cusack said that between
60 percent and 70 percent of all corporations in
Massachusetts pay the minimum, and that 403
companies in 2016 with over $1 billion in sales
paid just $456 in corporate excise taxes.
The House plans to create a corporate minimum
tax structure with nine tiers. On the low end,
companies with less than $1 million in sales
would see no increase, but at the top tier
companies with over $1 billion would pay a
minimum of $150,000.
The increased corporate minimum tax would
generate $100 million to $150 million in new
revenue.
The final piece of the revenue package would be
an increase in the 20-cent fee on all rides
taken with transportation network companies [TNC]
like Uber and Lyft. The fees on shared rides
would stay the same, but single-person rides
would be taxed at $1.20 and luxury and livery
vehicles would pay $2.20 per ride.
The House also wants to charge out-of-state TNC
drivers a new 50-cent fee for pickups in
Massachusetts. The new TNC fees, which go beyond
the $1 fee Gov. Baker proposed in his budget,
would net the state an additional $130 million
to $145 million.
"This plan, I believe, represents an infusion of
critical funds to address the crisis at the T
and regional equity issues compounded by
congestion," DeLeo said.
However, House Democratic leaders do not intend
to spend the new revenue dollar-for-dollar
immediately to address aging public transit,
crumbling roads and bridges, and widespread
traffic that prompted crafting of the package.
Instead, they want to use most of the new money
— estimated between $522 million and $612
million per year — to fill the state's accounts
more robustly, allowing for larger annual
budgetary injections into public transit and
road maintenance assistance each year and
helping to pay for capital projects the Baker
administration suggested funding through
borrowing.
The MBTA would see $27 million in dedicated new
revenue each year, and House leaders hope that
the state will finally be able to commit to
fully implementing a $160 million annual
transfer to the T — a payment that is already
required by law, but for years has gone
underfunded.
In each of the past three budgets, the state
approved transfers of $127 million to the MBTA,
while it transferred $187 million in fiscal year
2017. Baker proposed a $200 million transfer to
the MBTA, in addition to its dedicated sales tax
funding, in his fiscal 2021 budget filed in
January.
The state's 15 regional transit authorities [RTA]
would also gain a new dedicated revenue stream,
mirroring the T's $27 million per year coming
from new transportation network company [TNC]
fees. Also like the MBTA, the House plan would
commit to fully funding the $15 million annual
transfer to RTAs without guaranteeing spending
above it.
Funding for public transit could still jump
significantly, but under the House's proposal,
sharp increases are more likely to come during
the annual budget process when lamwmakers could,
for instance, go beyond the $160 million level
in operating budget support for the MBTA.
The revenue bill also creates a new $10 million
annual fund — also stemming from the higher
ride-hailing fees — for rural transit
assistance. Lawmakers said they wanted to ensure
the changes stretch across the state, not just
in densely populated areas or the greater Boston
region.
"These folks may not have RTAs, may not have T
access or bus service, yet still have
infrastructure needs that are ignored," Mariano
said.
In the separate transportation bond bill, House
leaders are recommending that the state finally
increase the annual appropriation for local road
and bridge maintenance under the Chapter 90 to
$300 million.
The annual allocation has been set at $200
million for eight of the past nine years, albeit
with later supplements in three years. Municipal
leaders have long requested an increase to that
program, often referred to as Chapter 90
funding, because they view the static level as
insufficient to address infrastructure needs.
"Obviously, the municipalities are our
partners," Straus said. "The public travels
freely from local roads to state roads, and we
have to be mindful of the municipal needs as
well."
The Ways and Means Committee on Wednesday
morning began polling the transportation revenue
bill and its version of the transportation bond
bill, which cut about $3.5 billion in borrowing
authorization from Baker's proposal.
Democratic leaders said Wednesday they felt the
Republican administration did not have a
sufficient plan for how to pay for the bonds. A
key focus of the revenue bill, they said, is to
build up the transportation fund and borrow
against it.
"Until the tax package is passed, which means
the concurrence and acceptance and the role the
membership at large plays and amendments that
might be filed, the revenue isn't fully there
for the $18 billion capital plan that the
administration identified," Straus said.
Straus said Baker planned to rely only on "two
dangerous revenue sources" — the
still-in-development Transportation and Climate
Initiative and expansion of grant anticipation
notes — to secure bonds for billions of dollars
in proposed capital spending.
"We're in a situation where we're hoping this
revenue package passes and goes into
implementation on Jan. 1, 2021, but we're not at
that point yet, and we had to be mindful of
that," said Rep. Aaron Michlewitz, chair of the
House Ways and Means Committee.
Straus said that while it's too risky now to
assume new money from a regional cap-and-trade
program on vehicle emissions that Baker is still
trying to negotiate with other states, the bill
does direct the administration to find a way to
offset the proposed 5-cent gas tax increase on
drivers if TCI does lead to higher gas prices
for consumers.
Baker opposes raising the gas tax.
"We've put together a very comprehensive
approach. We support increasing the fees on
transportation network companies, we support
increasing the deeds excise tax in order to
invest more in resiliency of the system. But we
think with those two additional revenue sources
and the bonding ability we've asked for in this
bill, we'll be able to provide the billions of
dollars of investment the system needs,"
Transportation Secretary Stephanie Pollack told
the House Bonding Committee on Tuesday.
James Aloisi, who served as transportation
secretary under Gov. Deval Patrick and remains a
vocal transportation advocate, called the House
plan "underwhelming."
The revenue bill also calls for further study of
East-West rail, a new commission of "outside
experts" to study congestion pricing and tolling
systems that could be used to change commuting
behaviors.
Unlike Baker who in his budget proposed a new
MBTA board structure, the House is also
recommending that the Fiscal and Management
Control Board be extended beyond July 1 to at
least 2023, with an option for a further
extension until 2025.
State House
News Service
Wednesday, February 26, 2020
House Transpo $$$ Bill Called Both “Genius” And
“Ill-Advised”
Progressive Dems Pleased To See Businesses Asked
To Chip In
By Matt Murphy and Chris Lisinski
Almost a year in the making,
expectations for the roughly $600 million tax
bill rolled out Wednesday by House Speaker
Robert DeLeo to pay for improvements in the
state's transportation system were high, and
varied.
Business groups were pushing for a major gas tax
increase and a one-year study of congestion
pricing and tolls. Progressive lawmakers wanted
corporations to help pay for public transit and
road improvements. And Gov. Charlie Baker just
wanted authorization to borrow more money to
beef up the state's capital program.
In the end, keeping everyone happy proved
difficult.
"I think we tried to keep everyone who uses our
roads in some fashion involved with the payment
of it," DeLeo said Wednesday, after presenting
the plan to House Democrats in a private caucus.
The plan calls for increasing the gas tax by 5
cents for most drivers and 9 cents for diesel.
It also raises fees on Uber and Lyft rides by up
to $145 million, and asks corporations to pay as
much as $150 million in higher minimum taxes,
which have not been adjusted in 30 years.
House leaders are also proposing to eliminate an
exemption for rental car companies that has
allowed them to avoid paying the sales tax on
new vehicles purchased in Massachusetts for
their rental fleets.
"That they were able to come up with a bill was
certainly an accomplishment," said Rep. Tricia
Farley-Bouvier, a Pittsfield Democrat and
co-chair of the House Progressive Caucus.
Farley-Bouvier said the caucus appreciated the
"process" House leaders used to develop the
bill, holding a series of meetings to listen to
different groups of lawmakers with, at times,
divergent interests.
"We are looking at the details of it, but I can
say we are pleased that the corporate minimum
tax, and that it's tiered, is in there. We were
looking primarily that there would be shared
responsibility, and that comes through in this
bill," she said.
While most advocates for new transportation
revenues to improve the condition of roads and
bridges and deliver more reliable, affordable
public transit were pleased to see progress,
several said they had hoped the bill would have
gone further.
A Better City CEO Richard Dimino said his
organization would like to see the House commit
to a congestion pricing and equitable highway
tolling plan within the next two years. The bill
only calls for a study of the topic to be
completed by July 31, 2021.
"While $600 million is a good starting point, we
believe additional funding is needed to fix our
roads, bridges, and transit as well as fund
expansion and resiliency efforts," Dimino said.
Stacy Thompson from Livable Streets also called
the bill "a positive first step," but added
that, "It's not bold enough to meet the scale of
our transportation crisis."
"While it's a good start to include some
dedicated revenue for the MBTA and the RTAs,
important policies like making fares more
equitable are missing from this package," she
said.
DeLeo, on several occasions Wednesday, described
the scale of the bill as a "bridge" to the
future when voters might have the chance in 2022
to weigh in on a ballot question to generate $2
billion by adding a surtax on household income
over $1 million.
The speaker also said it is "iffy," but still
possible, that a regional cap-and-trade program
known as the Transportation and Climate
Initiative being negotiated by Gov. Baker with
other states for vehicle emissions will general
significant new money for transportation.
Senate President Karen Spilka, who has said she
would like to use new revenue to lower public
transit fares, said the Senate "looks forward to
beginning in earnest the exchange of idea
between the House and Senate that will result –
we hope – in a safer and more effective
transportation system for the entire
Commonwealth."
"The Senate believes we need to take action to
change behavior to reduce congestion, provide
fare relief to low income residents, and expand
and improve public transportation in every
region," Spilka said.
DeLeo said the idea of fare reductions would be
considered by a new commission proposed in the
bill to study congestion pricing and tolling
policy.
The Greater Boston Chamber of Commerce, which
made its own recommendations for revenue last
year at the urging of the speaker, said it
supports the 5-cent gas tax increase, TNC fees
and the commission to study congestion pricing,
but has serious concern with the increase in
minimum corporate taxes.
The House proposal would create a tiered
structure, increasing the corporate excise tax
for all companies with over $1 million in sales
from its current level of $456. The top tier of
companies with over $1 billion in sales would
pay a minimum excise tax of $150,000.
"This is a troubling signal to business in a
time when cities and states around the country
are competing for jobs and economic growth," the
chamber said in a statement.
Massachusetts High Technology Council Vice
President Mark Gallagher also wrote a letter to
House Ways and Means Chairman Aaron Michlewitz
calling the bill an "unnecessary and ill-advised
departure from the policy path that has helped
make the Massachusetts economy the envy of the
nation," He said the council was especially
opposed to the corporate minimum tax proposal
and higher ride-for-hire fees.
The High Tech Council played a central role in
convincing the Legislature to repeal a sales tax
on software services that was part of the
Legislature's last attempt to raise new revenue
for transportation.
Gallagher urged the House to instead focus on
the procurement reforms sought by Baker to make
it easier to spend the money already authorized
in the MBTA and MassDOT capital plans.
Transportation for Massachusetts Director Chris
Dempsey — whose group called for a 25-cent
increase to the gas tax and ride-hailing fees
scaled at 6.25 percent of the cost of solo trips
— called the proposal a "step forward" to make
new investments in public transit possible, but
said the coalition would "work to strengthen the
final bill."
Metropolitan Area Planning Council Government
Affairs Director Lizzi Weyant said the 5-cent
gas tax was "lower than we had hoped" and that
her group will work in the coming days "to
understand how much money this legislation will
truly dedicate to the MBTA."
And the Raise Up Coalition said it was pleased
that business was asked to contribute, while the
gas tax increase, which is considered
regressive, was kept relatively small.
"Today we know we are being heard, but there is
still a long road to travel," said the Raise Up
Coalition in a statement.
Both Uber and Lyft criticized the ride-hailing
fee increases — which the bill bans
transportation network companies from passing on
to riders — as ones that would hurt working
families.
"Raising rideshare taxes by over 500% could hurt
low-income riders and reduce the transportation
options available, especially for those outside
Boston. We support public transit but this plan
is damaging public policy and must be
revisited," said Lyft spokeswoman Campbell
Matthews.
Rep. William "Smitty" Pignatelli, a Lenox
Democrat, said his district stood to benefit
from the House proposing to use the new revenue
to borrow against in order to increase annual
Chapter 90 aid for road and bridge repairs by
$100 million to $300 million.
He also said he thought the bill's plan to
dedicate $27 million in new TNC fees for
regional transit authorities was "much more
fair, much more equitable" than Baker's budget,
which also proposed to increase TNC fees.
Rep. Tami Gouveia, of Acton, said that like
other progressives she was encouraged to see
businesses being asked to help pay for the
infrastructure they benefit from.
"As a progressive Democrat and as a person who
represents a district that cares a lot about
climate change, I am also glad to see a little
bit of an increase in the gas tax," Gouveia
said. "I think that's an important aspect to
trying to change behavior, but with having this
balanced approach, I think it's going to be a
lot more fair so we're not burdening our working
families and our middle-income families with
bearing the brunt of where the revenue sources
come from."
And Rep. Ruth Balser, who as a Newton lawmaker
represents constituents who rely on the T, said
she was "delighted" with the bill.
"Certainly, my constituents are concerned with
the problems on the T. What's impressive about
this package is how balanced it is. There's
really shared responsibility. I think my
constituents will be really pleased with that,"
Balser said.
Rep. Sarah Peake (D-Provincetown), a division
chair on DeLeo's leadership team, on Tuesday
said the transportation proposal had the promise
to be a "generational gamechanger," and after
the bill was released, said its specifics
fulfill that promise. "I think it's genius in
the way it appropriately calls on different
constituencies to contribute," Peake said.
She said Straus and Michlewitz "went to a lot of
trouble to carefully listen to all the
stakeholders, and our comments were included" in
the bill's approach.
House members will have until Friday at 5 p.m.
to file amendments to both the tax bill and a
separate $14.5 billion transportation bond bill.
The House plans to debate the revenue bill on
Wednesday, and the bond bill on Thursday.
"This is a tax increase in an election year, and
everyone is looking to have an impact on their
district," Majority Leader Ron Mariano, of
Quincy, acknowledged ahead of next week's
debate. "So the approach to this was we will
listen, we will evaluate your concerns and try
to address them in this first step. And again, I
want to stress this. This is just the beginning.
This is nowhere near the identified needs."
Construction Industries of Massachusetts
Executive Director John Pourbaix praised the
bill as "a significant and necessary investment
in our roads and bridges, which carry 90 percent
of daily trips by Massachusetts residents."
The response from Republicans to the bill,
however, was dim.
House Minority Leader Brad Jones said he was
still reviewing the proposal, but that the
response he sensed was "lukewarm" after months
of buildup.
"There's a part of me that says: it's 19 pages
long. We waited this long for this?" Jones said.
He criticized the corporate tax proposal as
likely to create a "perverse incentive" for
businesses not to reach a higher sales revenue
threshold, and he said he has not been convinced
of the need for new revenue given the potential
$2 billion that could be generated for
transportation and education by the
still-pending income surtax proposal.
Jones also slammed Democratic leaders for
arguing they needed to shave $3.5 billion off
Baker's original $18 billion bond bill because
they did not have the revenue to support it.
"How come that concern didn't come up when we
did the speaker's GreenWorks bill earlier in the
session?" Jones said, referring to a 10-year,
$1.3 billion climate resiliency grant program
funded by bonds the House approved in July. "Is
that because the speaker wanted it, so it didn't
make any difference? How come the state's
finances didn't matter when you're doing your
bill?"
Massachusetts Fiscal Alliance spokesman Paul
Craney said the gasoline and diesel tax
increases were "regressive tax schemes" that
should be avoided.
"Massachusetts is a wonderful state, if you can
afford it. Under the Speaker’s plan, fewer
taxpayers will be able to keep up with the
increased cost of living. These measures make it
harder for people to make their home here and do
business in the state and will only hurt the
middle class—especially workers who have to
drive," Craney said in a statement.
Rep. Paul Frost, an Auburn Republican and third
assistant minority leader, said he had yet to
read the bill, but almost didn't need to.
"Are they going to increase taxes?" he asked.
Assured it did, Frost replied, "Then I oppose
it. Simple."
The Boston
Herald
Wednesday, February 26, 2020
Taxes on gas, ride-hailing and businesses all in
House transportation plan
By Mary Markos
A hike in the state gas tax, a
bump in ride-hailing fees and costs for
corporations are all part of a House proposal to
rake in up to $612 million from taxpayers to fix
the state’s transportation woes.
“When it comes to our transportation system,
revenue can’t wait. Revenue can’t wait any
longer,” Speaker Robert DeLeo told reporters
Wednesday. “Our residents, our communities and
our economy are dependent on an immediate source
of revenue.”
The legislative package, composed of gas tax
hikes, increased ride hailing fees, a rise in
the corporate minimum tax of up to $150,000 and
an elimination of a rental car sales tax
exemption worth $110 million, was unveiled by
DeLeo, Ways and Means Chair Aaron Michlewitz,
Majority Leader Ronald Mariano, Transportation
Chairman William Straus and Revenue Chairman
Mark Cusack.
The legislation calls for a 5 cent gas tax
increase, bringing it up to 29 cents per gallon,
and a 9 cent increase on diesel fuel to 33 cents
per gallon. State officials estimate that the
gas tax increase will raise between $150 million
and $175 million while the diesel tax bump will
bring in $32 million.
Fees for non-shared and luxury rides in
transportation network companies like Uber and
Lyft are raised in the legislation as well. The
fees would remain the same for shared rides, at
20 cents, but single-user ride fees would boost
from 20 cents to $1.20 and luxury rides would
cost an additional $2. A 50 cent fee would also
be charged to out-of-state drivers that pick up
riders in Massachusetts.
“This new dynamic fee structure is designed to
make sure that those who need these services the
most are not being disproportionally affected,
while at the same time making sure that those
that can afford it are paying more to support
our transit needs,” Michlewitz said.
Ride-hailing fees are estimated to bring in
between $130 million and $145 million in revenue
a year. The bill would also allow Department of
Public Utilities to collect data on the types of
rides, pick up and drop off locations and types
of vehicles being used.
The bill lays out a nine-tiered system of taxes
based on annual sales, so that “the more a
corporation earns in Massachusetts, the more
they will pay,” Michlewitz said.
Businesses that make less than $1 million
annually would continue with the existing
minimum fee of $456. The maximum annual fee
would cost $150,000 for companies with annual
sales over $1 billion. The increase is expected
to bring in $100 million to $150 million in
annual revenue. The corporate minimum tax has
not been raised since 1989, according to Cusack,
and about 60 to 70 percent of corporations in
the state are paying that minimum cost of $456.
The new revenue accounts for a new $27 million
in spending dedicated to the MBTA and $27
million to the regional transit authorities.
Much of the revenue will go toward fulfilling
budget line items for transportation that have
traditionally not been met, according to Straus,
like the $160 million dollar budget for the MBTA.
The Baker administration hasn’t been using that
money for the operating budget, Straus said, and
instead used it for the capital budget. Baker’s
office did not immediately return requests for
comment.
CommonWealth
Wednesday, February 26, 2020
Five takeaways on transportation bill
House proposal sure to unleash fierce jockeying
by interest groups
By Shira Schoenberg
Leaders in the Massachusetts
House on Wednesday unveiled an approximately
$600 million transportation revenue bill.
The bill will raise the gas tax, increase the
minimum corporate tax paid by large
corporations, increase fees on ride-hailing
services, and force rental car companies to pay
sales tax on the cars they buy.
Lawmakers say new money is necessary to address
the state’s traffic and transit woes. “Our
residents, our communities and our economy are
dependent upon an immediate source of revenue,”
said House Speaker Robert DeLeo.
The bill will be the subject of intense lobbying
from business and transportation interests over
the coming months. Here are a few flash points
in the debate.
Higher business taxes?
The bill would create a new nine-tiered system
to increase the minimum tax corporations must
pay, based on company size – from $456 today to
as high as $150,000 for businesses with more
than $1 billion in annual sales.
Businesses were among the top cheerleaders
urging lawmakers to raise transportation
revenue, saying their employees were having
trouble commuting to work. But they are less
enamored with paying for it.
Rick Dimino, president of the business group A
Better City, a strong advocate for
transportation funding, urged lawmakers to
reconsider the corporate tax increase and focus
on revenue sources directly tied to
transportation. Dimino said transportation taxes
and corporate taxes are “apples and oranges.” He
said focusing on transportation-related revenue
– like tolls or congestion pricing – is
necessary to ensure reliable funding and change
behavior.
The Greater Boston Chamber of Commerce similarly
called the corporate minimum tax increase
“problematic.” “This is a troubling signal to
business in a time when cities and states around
the country are competing for jobs and economic
growth,” chamber officials said in a statement.
Chris Geehern, a spokesman for Associated
Industries of Massachusetts, said his
organization is still gathering feedback from
members, but AIM believes any taxes raised to
fund transportation should be linked directly to
transportation.
On the other side, Raise Up Massachusetts, a
labor-backed coalition, argues that companies
should pay more. “Large corporations make
massive profits by using our transportation
infrastructure to move their goods and
customers, and they must pay their share to help
fund transportation improvements,” Raise Up said
in a statement.
Who will pay the new ride-hailing fees?
The bill would raise fees on ride-hailing
companies like Uber and Lyft, with no increase
for shared rides, a $1 increase for individual
rides and a $2 increase for luxury rides. The
tiers are a way to incentivize shared rides. The
state currently assesses a fee of 20 cents per
ride for all types of service.
House Ways and Means chair Aaron Michlewitz
called this a “progressive, balanced” fee
increase that ensures those who need the
services most are not disproportionately
affected “while making sure those who can afford
it are paying more to support our transit
needs.”
However, a provision in the bill also requires
ride-hailing companies to “hold consumers
harmless” from fee increases – in other words,
to not pass the fee onto riders.
Company lobbyists note that the main way to
incentivize shared rides would be to pass on the
fees.
“The House is proposing a significant tax
increase that will disproportionately harm
working families — and even worse, they want to
do it secretly because they know their
constituents rely on the affordability of
ridesharing,” said Uber spokesperson Alix Anfang.
Asked how a fee that cannot be passed on would
incentivize consumer behavior, Michlewitz
explained that companies will not be allowed to
directly pass the fee onto consumers, but
companies will be encouraged to develop new ways
to incentivize customers to take shared rides,
including through pricing mechanisms. “We’re
talking about an innovation company that created
dynamic price structures no one’s ever seen
before. They can figure out new ways to
incentivize those types of rides,” Michlewitz
said.
According to Uber, 20 percent of riders live in
households earning under $25,000 a year. Lyft
says nearly half its rides start or end in
low-income communities.
Lyft spokeswoman Campbell Matthews said,
“Raising rideshare taxes by over 500 percent
could hurt low-income riders and reduce the
transportation options available, especially for
those outside Boston.”
The car rental war
Traditional car rental company Enterprise and
peer-to-peer car sharing service Turo have
engaged in a nationwide battle over what
regulations and fees should apply to online
platforms that let private individuals rent out
cars.
In Massachusetts, Enterprise was pushing for
legislation to regulate Turo like a car rental
company and require its customers to pay various
fees. In response, Turo lobbied for a bill to
eliminate car rental companies’ exemption from
the state sales tax.
In a move likely to infuriate car rental
companies, the House bill would raise $110
million by eliminating the sales tax exemption
they enjoy when buying their auto fleets. House
Majority Leader Ron Mariano called the existing
exemption a “glaring kiss to the industry.”
Car rental companies say they are like any
business that buys goods wholesale without
paying sales tax. Although rental companies buy
cars without paying sales tax, they collect on
rental transactions, and eventually sell the
cars to consumers who pay the sales tax.
The bill also regulates peer-to-peer car
sharing. It would impose safety and insurance
requirements, require cars to have a decal and
require transparency in pricing, similar to
rules governing the ride-hailing industry. It
would also require car-sharing platforms to
collect a new fee of $1 per day per rental.
Michelle Peacock, head of government relations
for Turo, praised the bill for eliminating
traditional car rental companies’ sales tax
exemption and said it “not only levels the
playing field but will help fund Massachusetts’s
transportation shortfalls and provide more
economic opportunity to the state.”
What Transportation and Climate Initiative?
Lawmakers are growing increasingly uncertain
about the future of the Transportation and
Climate Initiative, a regional cap-and-trade
system that would put a price on gasoline
emissions.
Gov. Charlie Baker is a strong supporter of TCI.
The House bill does not count on any TCI money.
DeLeo called the future of TCI “very iffy,”
noting that no other state has committed to it.
“It does not appear the TCI concept is catching
on as we’d hoped it would,” DeLeo said. “That
could change. If it does change, we’d adjust
this accordingly.”
House Transportation chair William Straus said
lawmakers are uninterested in “double taxation,”
and the bill recommends an offset, so if TCI
goes into effect, the first five cents of its
cost would be covered by the gas tax increase.
That decision may please drivers at the pump,
but it upsets Chris Dempsey, director of the
advocacy group Transportation for Massachusetts.
Dempsey would prefer two separate tax increases,
arguing that Massachusetts currently has a lower
gas tax rate than most states in the region. “We
think TCI has the potential to be a
transformational policy, and the House language
seems to diminish the potential importance and
value of TCI both for transportation and climate
moving forward,” Dempsey said.
Is it enough?
Several pro-transportation advocates described
the bill as a start and said they wished it went
further.
Former transportation secretary James Aloisi, a
regular CommonWealth contributor, said he is
“underwhelmed.” “We need a transportation or
revenue bill that produces much more revenue
than this bill,” Aloisi said. “We’re talking
about a need that’s in the billions of dollars.
This doesn’t get you to three-quarters of a
billion.”
On the other hand, Paul Craney of the
conservative Massachusetts Fiscal Alliance said
the additional taxes go too far. “These measures
make it harder for people to make their home
here and do business in the state and will only
hurt the middle class—especially workers who
have to drive,” Craney said.
Senate President Karen Spilka indicated that
senators, who have formed their own
transportation working group, will look at other
possibilities, such as lower transit fares for
low-income residents. “The Senate believes we
need to take action to change behavior to reduce
congestion, provide fare relief to low-income
residents, and expand and improve public
transportation in every region,” Spilka said.
A Baker spokeswoman said the governor, who has
generally opposed gas tax increases, is still
reviewing the bill.
The Boston
Herald
Thursday, February 27, 2020
Critics rip DeLeo’s gas tax hike proposal
By Mary Markos
Critics are blasting the cost of
living increase that would accompany gas tax
hikes, boosted fees for ride-hailing services
and costs to corporations laid out in a House
proposal to rake in over a half a billion
taxpayer dollars to fix the state’s
transportation woes.
“It was just six years ago that the people of
Massachusetts spoke out clearly that they didn’t
feel that Beacon Hill was looking out for their
best interests in raising the gas tax,” former
state representative and U.S. Senate candidate
Geoff Diehl told the Herald. “It seems like
motorists and commuters who can least afford it
right now are being asked to foot the bill for a
lack of scrutiny and management of
transportation dollars.”
Diehl and Holly Robichaud, a Republican
strategist who successfully fought to repeal a
gas tax hike in 2014, argued that the
Legislature is ignoring the will of the people
with the two bills proposed by Speaker Robert
DeLeo and some of his top deputies Wednesday.
“Beacon Hill is obviously tone-deaf. The people
spoke clearly on gas tax hikes,” Robichaud said.
“They did not pass it last year so we could not
repeal it. Now they are passing it in an
election year, so we will repeal them.”
The legislative package calls for a 5-cent gas
tax increase, bringing it up to 29 cents per
gallon, and a 9-cent increase on diesel fuel to
33 cents per gallon. Ride-hailing fees would
jump from the current 20-cent rate by $1 for
single-use rides and $2 for luxury rides, the
corporate minimum tax would rise from $456 to up
to $150,000 and a rental car sales tax exemption
worth $110 million would be eliminated.
“Raising rideshare taxes by over 500 percent
could hurt low-income riders and reduce the
transportation options available, especially for
those outside Boston,” Lyft spokeswoman Campbell
Matthews said. “We support public transit but
this plan is damaging public policy and must be
revisited.”
State officials estimate that the gas tax
increase will raise between $150 million and
$175 million, the diesel tax will bring in $32
million, ride-hailing fees between $130 million
and $145 million and the corporate tax increase
between $100 million and $150 million in annual
revenue. In total, the measure is expected to
bring in between $522 million and $612 million
every year.
“When it comes to our transportation system,
revenue can’t wait. Revenue can’t wait any
longer,” DeLeo told reporters when unveiling the
legislation. “Our residents, our communities and
our economy are dependent on an immediate source
of revenue.”
Exactly how that money will be spent is
ambiguous, with the only new revenue
designations accounting for $27 million to the
MBTA and $27 million to the Regional Transit
Authorities.
“Massachusetts is a wonderful state, if you can
afford it. Under the Speaker’s plan, fewer
taxpayers will be able to keep up with the
increased cost of living,” Massachusetts Fiscal
Alliance Spokesman Paul Craney said. “These
measures make it harder for people to make their
home here and do business in the state and will
only hurt the middle class — especially workers
who have to drive.”
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