Who Pays If Mass. Pumps Up The Gas Tax?

Beacon Hill returns today to begin the 2009 legislative session. Among the bills waiting in the wings is a proposal to increase the state gas tax by 11-cents a gallon, from the current 23-cents. If passed, the revenue raised from the increase would eliminate tolls along the Massachusetts Turnpike.

But lawmakers are also examining how an even bigger increase could help dig the state out of its $20 billion transportation funding gap. WBUR's Meghna Chakrabarti looks at the pros and cons of pumping up taxes at the pump.

When considering the pros and cons of higher gas taxes, most economists would ask you to think a little differently. Don't think, cars. Think:

ALAN CLAYTON-MATTHEWS: Well, cigarettes.

And tobacco taxes, as UMass Boston public policy professor Alan Clayton-Matthews puts it.

CLAYTON-MATTHEWS: In a way you can think of this as a sin tax.

A sin tax. In other words, the kind of tax meant to soften the impact of a specific behavior. With cigarettes, a large fraction of those taxes go to fund health programs and anti-tobacco campaigns. With a higher gas tax, increased revenues could go towards eliminating tolls, repairing state roads, or shoring up bridges. Clayton-Matthews says people would also drive less.

CLAYTON-MATTHEWS: There would be less congestion. The air would be better, which would be better for you and generations to come. Health would be better, and that means lower health expenditures.

But Clayton-Matthews says gas taxes would have to be significantly higher than proposed to really curb driving habits. He says when even gas shot above four-dollars a gallon last year, people did drive less, but not enough to put a major dent in the $660 million the Commonwealth's gas tax generates every year.

So what are the disadvantages of boosting the gas tax? Clayton-Matthews says that unlike cigarette taxes, which are levied on a shrinking number of smokers, most people have no choice about their cars. They have to drive.

CLAYTON-MATTHEWS: If you live far out in the suburbs and you work downtown, you might drive more miles than someone else, and you'll end up paying more of that tax. Also, low-income households probably drive as much, maybe more, because they can't afford houses as close into work as higher income households. So in that sense, this is a regressive tax.

Beacon Hill lawmakers are sensitive to the potential inequities inherent in higher gas taxes. But it's less unfair than the current toll structure, says Representative David Linsky. He authored the pending House Bill that would raise taxes by 11-cents a gallon and eliminate all tolls on the Massachusetts Turnpike.

REP. DAVID LINSKY: The reality is that Massachusetts has an unmet transportation finance need of between $15 and $20 billion, over the next 20 years, and the revenue has to come from somewhere, and the fairest and most equitable way to deal with that is probably the gas tax.

Not all Linsky's colleagues agree. State Senator, and co-chair of the Transportation Committee, Stephen Baddour says he flatly opposes increasing the gas tax without across-the-board reform within the state's transportation agencies.

Plus, talk of a gas tax brings another problem to Beacon Hill.

SPENCER KIMBALL: I see politics being played on the people of Massachusetts, and it's wrong.

Spencer Kimball is director of StopThePikeHike.og, an East Boston group fighting proposed Turnpike toll increases. Kimball says the gas tax was last increased in 1991. And at just over 23-cents a gallon, the tax rate puts Massachusetts squarely in the middle when compared with other states. So Kimball wonders, why now?

KIMBALL: Just like it says on the back of the dollar, you know, 'In God We Trust'. They're saying, in Massachusetts government we trust. But when they tell me when they tell me that they need money, they have to show me what's going on for me to actually believe that. I see the potholes, they're not fixed. So if they're not fixing the problem, then where's the money going?

It may soon be going to Washington, where there's talk of raising the federal fuel tax. Meaning Washington could beat Beacon Hill to the pump. If that happens, Massachusetts drivers would be paying more, but very little of that money would stay in the state.

For WBUR, I'm Meghna Chakrabarti