Massachusetts OKs Fuel Tax Increase
Measure in House calls for 5-cent hike in state’s gasoline tax and 9-cent boost in diesel fuel levy.
Massachusetts’ House of Representatives has approved a plan to generate more than $500 million in additional revenue annually for transportation projects.
The measure, which now goes to the State Senate, calls for a 5-cent increase to the state’s gasoline tax and a 9-cent increase to diesel fuel taxes. Massachusetts currently taxes both fuel types at 24 cents per gallon, rates that have been in place since 2013.
Additional revenue will come from increases to minimum corporate tax rates and higher fees on ride-hailing services such as Uber and Lyft, and by ending the state’s current sales tax exemption on new vehicles purchased by rental car companies.
In addition to providing additional money for road and bridge maintenance, the bill preserves a mandatory annual transfer of $160 million in projects overseen by the Massachusetts Bay Transportation Authority. Regional and rural transit programs will also receive a funding boost. Another provision creates a commission to utilizes congestion pricing and tolling systems as a means for changing commuter behavior.
The current session of the state legislature has seen several bills introduced to address a growing backlog of infrastructure maintenance needs. In 2014, Massachusetts voters repealed a year-old law that automatically indexed state fuel taxes to the rate of inflation.
Gov. Charlie Baker (R) has promoted a multi-state initiative to reduce vehicle emissions in part by raising the state gas tax by 17 cents per gallon. Sponsors of the state House bill say that should the governor’s plan be adopted, the 5-cent gas tax boost would be applied to any future increase.
The Massachusetts legislature will remain in session through the end of the year.