Increasing the Gas Tax

Background on the Issue

The motor fuel tax in Massachusetts was adopted in 1929 and currently stands at 21 cents a gallon. The gas tax was last increased in 1990; a one-cent increase would create about $3.5 million in new revenue per year. Currently, the gas tax in Massachusetts must be dedicated to state transportation infrastructure costs.

In fiscal year 2005, Massachusetts collected 2.4 percent of state and local taxes from motor fuels taxes, including the gasoline tax. This represents about 0.25 percent of personal income. Only three other states collect less in gas taxes. People in Montana pay the most—7.3 percent of personal income—and those in New York pay the least at 0.07 percent of personal income.

In September 2007, the Transportation Finance Commission, appointed by the Legislature in 2004, predicted that the state's transportation agencies would face a deficit of as much as $19 billion over 20 years. This estimate assumes the following: 1.) no costs would be cut, 2.) no additional revenues would be created and 3.) no infrastructure improvements would occur during the 20-year timeframe.

The commission recommended a gas tax increase of 11.5 cents per gallon, among several other cost-cutting and revenue-creating recommendations, to help balance the expected structural deficit. It also recommended that future increases in the gas tax should automatically be tied to the rate of inflation, which could generate an additional $10.5 billion over 20 years.

A gas tax is now being considered by the Legislature as part of an overall strategy to minimize the state structural deficit of approximately $1.3 billion.

Sample Arguments In Favor

  • A gas tax will provide urgently needed revenue to maintain and expand a safe and efficient network of public transportation services, highways and bridges.
  • By increasing the cost of gas, fewer miles will be driven and harmful carbon emissions will be reduced.

For more information see:  Conservation Law Foundation 

Sample Arguments Against

  • As with any tax on every-day consumer goods, this tax disproportionately affects people who have low incomes.
  • The cost of housing, health care and food are also increasing rapidly, people simply can not afford to pay even more for gas as well.

For more information see:  Citizens for Limited Taxation