OOIDA ELECTION REPORT Massachusetts voters repeal 'forever tax'

By Keith Goble, Land Line state legislative editor | Friday, November 07, 2014

Voters in Massachusetts this week overturned a state law authorizing automatic fuel tax indexing.

The state’s fuel tax rate increased one year ago by 3 cents from 21 cents per gallon to 24 cents. The boost was the result of a new transportation funding package approved by lawmakers that also tied the state’s fuel tax rate to inflation, which allows for regular increases.

On Tuesday, 52 percent of voters chose to nix the provision allowing for automatic increases.

A group of Republican lawmakers and activists pushed to get the question on the ballot. They labeled the 2013 law authorizing regular increases as a “forever tax” because the tax rate can increase without legislative action.

Dubbed “Tank the Gas Tax,” the group collected 100,000 signatures in an effort to get the issue on the fall ballot.

Critics say that passage of Question 1 will result in the loss of a projected $1 billion in revenue and the opportunity to borrow more for transportation work. They say that planned road, bridge and rail work could also be delayed if the state Legislature doesn’t approve additional fuel tax increases.

Gov.-elect Charlie Baker, a Republican, supported the ballot question to overturn the automatic fuel tax increase.

The fuel tax increase was part of a Democrat-led transportation funding package that includes a $1 excise tax on cigarettes and adding the state’s 6.5 percent sales tax on computer software services. The new money is applied to roads and bridges.

In addition, a 2.5-cent portion of the fuel tax applied to underground storage tank cleanups is being rerouted to transportation.

As approved during the 2013 legislative session, the funding plan was expected to raise $800 million in taxes annually by 2018. State officials have said an additional $1 billion is needed per year for maintenance and upkeep of the state’s transportation infrastructure.

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