Massachusetts Rolls Back Automatic Gas Tax Hike

One of the biggest criticisms of the gas tax in most places is that it doesn’t keep up with inflation. Massachusetts voters decided they like it that way.
by | November 5, 2014

Massachusetts voters eliminated part of a 2013 transportation law designed to help gas tax revenues keep up with inflation.

The proposal to repeal the inflation measure earned 53 percent of the vote. Pollster David Paleologos said previous polls showed Massachusetts residents were skeptical of automatic increases.

“People don’t want any taxes automatically tied to anything,” said Paleologos, the director of the Suffolk University Political Research Center.

Although Tuesday’s result was not overwhelming, supporters of the repeal had to overcome a lot of voter confusion to earn a victory.

In an October Suffolk poll, for example, 63 percent of respondents said they did not think “gas tax increases should automatically be tied to the Consumer Price Index.” But when asked the question as it was actually worded on the ballot, only 36 percent supported the repeal.

That is not good news for transportation advocates, who are looking for politically feasible ways to raise money for infrastructure improvements.

The gas tax is already extremely unpopular politically, a point underscored by Tuesday’s results. Supporters of the repeal argued legislators ought to take a recorded vote every time the gas tax was increased, but, in practice, no state does that every year.

Plus, one of the main reasons why states and the federal government keep running short of transportation funds is that the per-gallon fuel taxes do not increase with inflation.

The legislation passed by the Massachusetts legislature last year was the first time since 1991 that lawmakers there had raised the gas tax. If the state’s tax had kept up with inflation since then, it would be 36 cents a gallon, rather than the 24 cents it is today.

And Massachusetts has plenty of company. The federal gas tax of 18.4 cents has been in place since 1993. Twenty-four states haven’t touched their gas tax rates in more than a decade, according to left-leaning Institute on Taxation and Economic Policy. For 16 of those states, the last change was more than 20 years ago.

Recently, other states have tried various means to keep their gas tax revenues in line with costs. Maryland, Pennsylvania and Virginia, for example, all recently imposed or increased wholesale taxes on gas that increase as the price of fuel increases.

The Massachusetts repeal effort only addressed the automatic increases in the 2013 law. It did not change the 3 cent-per-gallon gas tax hike that came along with it.