Beacon Hill Dem:  Increase Gasoline Prices Through Carbon-Emissions Fee and Higher Gas Tax

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By Matt Murphy
State House News Service

Massachusetts House Speaker Robert DeLeo said he’s waiting to learn more about a regional vehicle emission reduction pact before deciding how it will fit into his plan for transportation.

But one of his top deputies said it hasn’t changed his mind about increasing the gas tax.

A co-chairman of the Joint Transportation Committee of the Massachusetts Legislature, state Representative William Straus (D-Mattapoisett), said in an interview this week that the House is still targeting January for a debate over how to raise more money for transportation, but he sees Governor Charlie Baker’s pursuit of a multi-state, cap-and-invest program as something separate from those discussions.

Despite the Transportation Climate Initiative’s impacts on the costs of a gallon of gas, Straus said he doesn’t believe that negates the need for a gas tax increase, or mean he won’t recommend one to his colleagues.

Boston Mayor Marty Walsh also said this week that state lawmakers should not shy away from raising the gas tax just because Baker is closing in on a deal with other governors to join the Transportation Climate Initiative.  “We need to be bold when it comes to transportation,” Walsh said.

The Transportation Climate Initiative, which is under negotiation between 11 states and the District of Columbia, could add up to 17 cents to the price of a gallon of gas and generate as much as $500 million for the Massachusetts state government to spend on mass transit and climate change programs designed to reduce carbon emissions from fossil fuels like oil and natural gas.

Critics, including the Massachusetts Fiscal Alliance and some Republican legislators, have panned the initiative as the equivalent of a gas tax hike, though supporters have rebutted that characterization. Baker has said he opposes an increase in the gas tax, but supports the Transportation Climate Initiative as a market-based regional solution to reduce carbon emissions and generate money to invest in programs that will help the state meet its climate goals.

Straus said he’s not opposed to the Transportation Climate Initiative, but doesn’t look at it as a substitute for some of the revenue options he and other House leaders have been studying since the spring. Meetings continued this week among top level House members developing the plan, and Straus said he hasn’t yet recommended a gas tax level.

“TCI, while it may be great for the environment, is not a transportation financing solution,” Straus told State House News Service in an interview this week.

Straus said that unlike the gas tax he does not believe that Massachusetts will be able to borrow against future Transportation Climate Initiative revenue to finance long-term infrastructure projects. 

“I don’t believe you can go to Wall Street and say you’re offering up as security a revenue stream that will be determined by market forces and will diminish over the next 30 years based on how successful we are,” Straus said.

He also said that policymakers would be missing the urgency of the moment if they relied on Transportation Climate Initiative funding that won’t start to flow until 2022 at the earliest.

“It’s not now and it’s not known or predictable,” Straus said. “If the priority is transportation financing that generates revenue into a continual restricted trust fund, I think this would benefit from more candor with the public.”

The coalition of states developing the Transportation Climate Initiative anticipate that the details of the program will be finalized by the spring when participating states will be asked to sign on. Governor Chris Sununu of New Hampshire has already pulled his state out of the talks because of the cost it would add at the pump.

Baker has requested in legislation the authority to allocate half of all Transportation Climate Initiative proceeds toward public transit, while the rest would likely be spent on projects like sidewalks, bike lanes, and other programs designed to reduce people’s reliance on cars to move around.

Straus noted that the administration has said it could try to spend some of the money on broadband infrastructure to make it easier for workers in rural western Massachusetts to telecommute.

“We’re still going to need roads and bridges and we’ll be relying even more on public transit so no part of this debate should suggest to people that there’s a painless way coming along — either politically painless or pocketbook painless to pay for keeping our transportation in working order,” Straus said.

DeLeo (D-Winthrop) met with Baker and Senate President Karen Spilka (D-Ashland) just before Christmas, during which the impact of Transportation Climate Initiative on gas prices was one of the subjects discussed, according to the speaker.

“I think we’re going to need a little more review and I know the governor’s going to be providing us with some information relative to TCI, anywhere from government approval to the cost and whatnot,” DeLeo told reporters.

“As many topics when you’re talking about transportation and you’re talking about climate change and the environment and the like, I think TCI, just like a number of other things, is going to be on the table for us to discuss,” he said.

The speaker’s office declined to say whether the speaker thinks the Transportation Climate Initiative needs legislative approval. Straus said he didn’t know whether there might be a reason to doubt the administration’s assertion that the governor does not need the Legislature’s approval to join the Transportation Climate Initiative.

State Representative Timothy Whelan, a Brewster Republican, and state Representative Marc Lombardo, a Billerica Republican, both submitted public comments to the Transportation Climate Initiative coalition arguing that the Legislature should get to vote before Massachusetts joins any partnership, and state Representative David DeCoste of Norwell filed a bill on December 20 to give the Legislature final say.

The DeCoste bill would require a vote of the House and Senate before Massachusetts could participate in any “state, regional, or national low carbon fuel standards program or any similar program that requires quotas, caps, or mandates on any fuels used for transportation, industrial purposes, or home heating.” The bill was co-sponsored by 10 Republicans and two Democrats.

Straus did say it should be “absolutely clear” that the House and Senate has full control over how Transportation Climate Initiative proceeds are spent, and he hopes the administration agrees. “On the spending side, I sense a disagreement with the administration,” he said.

Energy Secretary Kathleen Theoharides has said several times in public hearings that the Legislature will have a role to play in deciding how to spend the proceeds from the Transportation Climate Initiative, but Straus said he was looking for more clarity on how that would work.

Boston Mayor Walsh, with his city reliant on the Massachusetts Bay Transportation Authority, has a lot riding on the outcome of the revenue debate on Beacon Hill and how potential Transportation Climate Initiative money gets spent.

At a press conference ahead of First Night festivities on Monday, December 31, Walsh may have previewed his upcoming State of the City address when he listed transportation – -along with housing and education — as one of the “big three” most important issues facing the city of Boston as the new year begins.

He pointed to how Los Angeles County used the sales tax to generate millions for transportation, and how cities in Arizona — Phoenix, Mesa and Tempe – are spending public money on light rail.

The mayor was among a group of municipal leaders who came out last year in support of a 15-cent increase to the state’s 24-cent gas tax, which is higher than New Hampshire’s but lower than those in the other New England states.

“I think they’ll understand if they have to pay a little but they have to see what the result of that increase is, and if they see what the result could be and will be, then you’ll see, I think, a lot of support for it,” Walsh said of commuters.

Walsh also said cities and towns should not have to seek Beacon Hill’s approval to raise revenues for local priorities like transportation through a mechanism like a real estate transfer tax, and he urged the Legislature to amend the home-rule petition process.