House Bill Proposes Higher Corporate, Gas Taxes To Fund Transit Improvements

It's not yet clear whether the House bill will provide a sufficient amount of funding to meet the MBTA's needs for additional staff and new capital projects.

The Massachusetts State House in downtown Boston.
The Massachusetts State House in downtown Boston.

Leaders in the Massachusetts House of Representatives today released a long-awaited proposal to raise additional revenue for the Commonwealth’s roads, bridges, and transit networks.

The draft bill includes a 5-cent increase to the state’s gas tax, from 26.54 cents to 31.54 cents per gallon.

The bill would also establish a tiered minimum corporate income tax, a proposal championed by Raise Up Massachusetts and the Green Justice Coalition. And it would increase fees to $1.20 per ride on solo Uber and Lyft rides (although shared “pool” rides would retain the current 20-cent fee).

Legislators estimate that their proposal could add $522 to $612 million more in annual funding for the state’s transportation systems.

Some of that new revenue would be dedicated on an ongoing basis to the state’s Regional Transit Authorities (RTAs). While the MBTA receives a dedicated portion of the state’s sales tax each year, the RTAs to date have not had a similarly dedicated source of state revenue.

Carving out a dedicated source of funds for transit agencies outside of the MBTA’s service area had been a high priority for legislators outside greater Boston.

Initial reactions to the bill were generally positive, although some advocates, including former Secretary of Transportation Jim Aloisi, expressed disappointment that the legislation isn’t more ambitious.

Chris Dempsey, director of the Transportation for Massachusetts coalition, said in a statement that “this proposal is a step forward and enables new, needed investments” and added that “we will work to strengthen the final bill to further advance equitable and efficient transportation for all Massachusetts residents.”

Two Boston-area business groups also offered praise for the bill in press releases issued Wednesday afternoon.

“Much of the House bill is forward looking and several aspects of the package align with what employers recognize is necessary: using pricing to influence behavior with the ultimate goal of getting cars off the road, improving public transit, and reducing emissions,” wrote the Boston Regional Chamber of Commerce in a press release.

A Better City, a business group that had previously recommended raising $50 billion in new revenue for major transportation projects over the next 20 years, issued a statement that said there is “much in the House bill to support,”  but added that “we believe additional funding is needed to fix our roads, bridges, and transit as well as fund expansion and resiliency efforts.”

It’s not yet clear whether the House bill will provide a sufficient amount of funding to meet the MBTA’s needs for additional staff and new capital projects in the next fiscal year.

Earlier this week, the MBTA’s Fiscal and Control Management Board had a long discussion about how current state funding levels would be insufficient to meet the agency’s staffing needs in the next fiscal year.

The T would like to hire more staff to implement safety improvements, gear up for expanded commuter rail services, and implement improvements to its bus network. But based on its current revenue expectations, which included speculative new revenue from the Governor’s proposal to increase Uber and Lyft fees, the agency still expects a $93 million shortfall for the next fiscal year, which could put some of its expansion plans in jeopardy.

The Commonwealth’s gas tax hasn’t been increased since 2013, and is significantly lower than gas tax rates in neighboring states like Connecticut (42 cents per gallon), Rhode Island (35 cents), and New York (46 cents).

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