ABC MA Joins Industry Gas Tax Coalition
At its September meeting, Associated Builders and Contractors of Massachusetts board of directors voted to join a coalition of more than 40 construction industry and other groups that is working to defeat a question on the November ballot that would end the recently adopted practice of indexing the commonwealth’s gas tax to inflation. We decided to join the coalition because we believe the ballot question’s passage would have a devastating impact on the construction industry and on future public and private development in Massachusetts.
In 2009, Massachusetts passed an historic set of transportation reforms that included eliminating the Turnpike Authority, reforming MBTA pensions and health care, and ending the use of capital funds to pay for operating costs. The clear message was that elected officials wanted to see reforms implemented before any new money was dedicated to transportation.
Once the reforms were put in place, a 2013 law increased revenues dedicated to transportation by about $600 million annually. A number of measures were enacted to pay for the increased investment, including a three-cent hike in the gas tax (the first since 1991) and indexing the tax to the Consumer Price Index.
Increased transportation investment provided a huge boost to the construction industry at a time when private investment was scarce and the industry was struggling. It also spurred private investments that would not otherwise have been made.
Indexing the gas tax to inflation is a critical piece of the finance plan that ensures a stable, revenue source for enhanced transportation investments that will keep pace with the cost of doing business. Eliminating the provision would reduce those investments by around $1 billion over the next decade.
The ABC board recognizes that with the rise of hybrid vehicles and federal laws that will require improved fuel efficiency, the gas tax is not a permanent solution to Massachusetts’ transportation funding needs. We believe it is important that we, together with our partners, work toward a more permanent solution that funds infrastructure investments through the state budget, not taxes. But that solution will take time. In the interim, we believe that ensuring a reasonable level of transportation investment is critical to our industry and the commonwealth.
The coalition has hired a firm to run the ballot campaign and anticipates it will need to raise $3 million to be successful. ABCMA will match member contributions to the effort up to $10,000. If you plan to make a contribution to the campaign, please let us know so we can match it. Thank you for your membership and support for our efforts.