In 2018, a statewide referendum is likely to appear on the Massachusetts ballot that would tax those earning over $1 million with revenues funding higher education and improvements in public transportation, roads, bridges, and highways.
If passed, the “millionaire’s tax” or “fair share amendment” is expected to raise nearly $2 billion in funding. Some 99.5% of Massachusetts residents would not experience any increase in taxes under the proposal, but for those earning over a $1 million annually, they would pay an additional four percentage points on their taxes.
Yet although transportation advocates and experts view the bill as a welcome provision, they warn it is not the final solution to sustained funding for public transportation in the state.
“Any time you raise taxes, it probably makes the next one a little harder,” says Charlie Ticotsky of Transportation for Massachusetts, a statewide coalition of about 70 organizations working to improve transportation. “But the fare share amendment would really be a transformative moment because that would give $2 billion a year to education and transportation, which are two of the most important areas to people, if not the most important.”
While Ticotsky acknowledges that nobody likes to have their taxes raised, he makes sure to say that the millionaire’s tax only affects a very small population of the state, and that plans for other taxes to fund transportation need to be readdressed after years of failed funding attempts. In 2013, a referendum on the ballot that would have raised the state’s gas tax from 21 to 24 cents a gallon failed to gain the approval of voters.
“If we had indexed our gas tax to begin with, we wouldn’t have this problem — 1991 was the last time before 2013 that the state gas tax was increased,” Ticotsky says. “Mathematically it was a setback, but also politically, because it took the wind out of the sails for transportation funding since the voters made their statement, the Legislature has been hesitant to revisit it.”
If the Legislature is wary of repurposing an amendment to the gas tax for increased transportation funding, experts say there are other tax options that appear to be practical.
Pay for the miles you travel
“One of the ways of funding a transportation system in the future is to move from a gasoline tax to a Vehicle miles traveled (VMT) tax,” says Barry Bluestone, a Northeastern University professor and co-author of the “State of the Built Environment” report. “Here in Mass it’d be pretty easy to collect that. They write down your mileage on the odometer when you get your car inspected and they know exactly how many miles you’ve traveled.”
The idea of a VMT tax has not been kindly received by Gov. Charlie Baker who earlier in the summer rejected the idea of another tax on Massachusetts residents. But in other states, such as Oregon and California, the idea is currently being experimented with, notes Ticotsky.
He goes on to point out that under a fuel tax, users of increasingly popular electric cars, don’t have to pay a penny since the cars don’t use any gas yet they still take up space on the road, contributing to traffic congestion. He says Oregon is a model to look at as they are currently testing out the “pay-by-the-mile” tax for a possible law proposal in 2017.
Bluestone shares similar concerns as he is a highway commuter himself who has seen first-hand how crowded highways have gotten. “I’m in my car a lot, people don’t understand how valuable it would be for drivers to have 10, 20 percent of existing drivers, just so we don’t have to wait in traffic,” he says.
Bluestone says ride-sharing companies will be looked to in the future to encourage people who don’t necessarily need to be on the roads, to use their cars less. “The demographics may help solve that problem because we have a growing, aging population,” Bluestone says. “In five years, 10 years, wouldn’t it be great to have Uber, Lyft and bridge vehicles to help seniors get to doctor’s appointments and just create a whole new system where people are not dependent on their own individual cars?”
He says that a VMT tax especially could be able to also help fund some of these ride-sharing opportunities also, as less driving, would cause you to pay less taxes.
Even with other states looking at other means of funding transportation and increasing efficiency through taxes, the “millionaire’s tax” appears to be the only increase on the table currently for Gov. Baker who is not looking to raise taxes as he runs for reelection.
Coalitions such as Transportation for Massachusetts will keep pushing forward though in order to get more funding for public transportation.
“The gas tax and fair share amendment are two ways to raise revenue,” says Ticotsky. “There are other options out there too, the transportation funding problems aren’t technical problems but rather political problems. There are many ways to raise money for transportation.”