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Business groups support increase in gas tax, ride share fees for transportation fixes

October 30, 2019

Just think about it: congestion pricing, managed lanes, tolling on routes other than just the Massachusetts Turnpike, money drawn from drivers being invested back into public transit, and a transportation system that could adapt to meet future needs.

That's what most of a coalition of business groups supports asking the Legislature to tell the smartest minds in the state: start thinking seriously about the options for reducing congestion on roads, improving accessibility and service on public transportation, limiting greenhouse gas emissions and raising the money to pay for it in a fair and geographically-equitable way.

But in the meantime, get to raising the revenue necessary to take care of immediate needs -- like structurally deficient bridges and poor roadway conditions -- by taxing customers a little more for gasoline and increasing the fee built into ride service fares, much of the Massachusetts Business Coalition on Transportation agrees.

The consensus ranges from agreement among all but one group that the state needs additional revenue for transportation to very narrow majority support for specific approaches to raising that revenue. It came as the result of months of talks among the statewide group of chambers of commerce, research and planning firms, and industry associations.

"So I want the Legislature to adopt a short-term revenue strategy that enables us to think more with a greater sense of urgency about the problems we need to address, put that money to work," James Rooney, president and CEO of the Greater Boston Chamber of Commerce and co-chair of the MBCT, said. "I would ask them to also make a statement, 'we're not done yet.' We want to know what the 21st-century pricing structure should do for the consumption of mobility, that deals with incentivizing behavior and equity statewide and helping us deal with other public policy issues like housing."

There is "strong majority support" among the MBCT member groups for creating a 21st Century Roadway Pricing Task Force that would be helmed by private citizens and given one year to come up with a specific plan -- including toll gantry locations, pricing rates, a timeline, and options for mitigating social and geographic inequities -- that could be used like a menu of options for policymakers.

"We support the idea of a commission that will actually start spreading some numbers ... start understanding, whether it's vehicle miles or where a toll gantry might go, some real specific data to figure out if one of these revenue ideas or several of these revenue ideas would actually generate what we hope they could generate and be a positive and not a negative, because pricing something could sometimes hurt more than it can help," MBCT co-chair and Cape Cod Chamber of Commerce CEO Wendy Northcross said.

The group would ideally be given specific questions to consider and answer -- What are the federal hurdles? What would a statewide tolling system cost to implement and administer? What kind of a system would be sustainable in the future, when the gas tax might not be as reliable of a revenue source? -- and would present the Legislature and public with a range of alternatives.

Before the various regional business groups could fully back any one strategy or approach, Northcross said, they want to see the details and better understand what it would mean for their regions.

"I don't think we're ready to legislate anything other than a demand that smart people think about it and be very specific about it," Rooney said.

A Crisis Point

The business community has increasingly decried the Boston area's public transportation woes as a hindrance to growth. Traffic and congestion on the roads all over the state make for long and frustrating commutes by car, and the unpredictable nature of public transportation in all regions frequently makes workers late to their jobs.

A Better City released a report this year detailing an $8.4 billion shortfall in revenues needed to ensure state roads, bridges and MBTA infrastructure are in a state of good repair over the next 10 years. And a March poll conducted by MassINC Polling Group found that 66 percent of resident think action is "urgently needed" to improve the state's transportation system.

As it worked to find consensus with other business groups, the Greater Boston Chamber of Commerce looked at the work done by the executive branch's Commission on the Future of Transportation and extrapolated it to infer that the problem that's already causing stress for the state economy is only going to get worse if nothing is done.

"On a daily basis, this issue of mobility is affecting personal lives, workers, business and commerce. But as importantly, it is not allowing us to deal with some other public policy issues or have confidence that our economic growth strategies can continue to sustain if we don't deal with this," Rooney said. "So we view it as a moment -- and we've used the word crisis to describe it -- that we need to have a strategic plan, including revenue, that deals with it."

Back in March, House Speaker Robert DeLeo used a speech before the Greater Boston Chamber to call upon business groups to be part of the solution. He said it's crucial that "the business community clearly articulates the transportation policies that it can unite behind" and present "what employers can bring to the table as we think about the state's transportation networks."

"It's all on the table," DeLeo told reporters after his remarks. He added, "Quite frankly, I think we're at a situation relative to transportation we're at a critical point. If we're going to continue to grow our economy here in Massachusetts, transportation has to be one of the major factors that we address."

The speaker specifically mentioned the gas tax to reporters that day and Transportation Committee Chair Rep. William Straus has repeatedly said since that it would be hard -- "not impossible, just hard," he said this week -- to put together a transportation financing proposal that didn't include an adjustment to the gas tax.

MassINC's March poll showed 80 percent support for the general idea of raising new state revenue to spend on transportation infrastructure and public transit.

Preparing For The Future

Rooney said the idea isn't fully baked just yet, but the thought is that the state could create a high-tech and statewide network of tolling gantries or some other technology that would be flexible enough to accommodate different approaches to roadway pricing -- tolls, congestion pricing, demand pricing, etc.

"It becomes a tool, think of the technology as a tool," he said.

One idea the business community wants a task force to delve deeply into is tolling other interstate highways to collect toll revenue from various parts of the state. That would require legislative authorization since the Department of Transportation's authority to impose tolls is limited under current state law to the Mass. Turnpike and the metropolitan highway system. Rooney said any statewide tolling system would have to be as fair as possible to all regions.

"Right now, our system of tolling is not equitable, it's just the east-west travel on the Turnpike and people who take the bridges. It's just not," he said. "So how do you create a statewide equitable program that says, 'OK, we're all in this.'"

Rooney and other business leaders interested in statewide tolling might find an ally in Senate President Karen Spilka, who represents a MetroWest district that relies heavily on the Turnpike.

"Simply put, and I put this out there, if tolls are a good idea for my district, my region, I believe we should explore the possibility of expanded tolling, including possibly at our borders," Spilka said in April when she spoke to the Greater Boston Chamber. "Our best ideas won't matter if we can't find a way to make a 21st-century transportation infrastructure a reality — and find a way to pay for it."

Who pays -- whether it be tolls or other pricing strategies the system that Rooney envisions could support -- and how the money raised is spent is of critical importance to the Economic Development Council of Western Massachusetts.

"We can certainly appreciate the pressures and the needs to do something with the T but, quite frankly, not on the backs of Western Mass. or disproportionately on the backs of Western Mass. and we have other needs out here," Rick Sullivan, the group's CEO and a co-chair of the MBCT, said. "We have been advocating for a larger definition of transportation infrastructure to include communications infrastructure -- so broadband, internet, wifi, cell service -- so we have the ability out here in Western Mass. to take advantage of the current and up-and-coming technolgoies whether they be Uber-like or whatnot."

The 2013 transportation financing law required MassDOT to "develop a comprehensive tolling plan for additional Interstate and limited access state highways within the Commonwealth ... and study and report on the feasibility of establishing additional Interstate tolls along the borders of the Commonwealth."

That MassDOT report, released December 2013, found that "tolling additional Interstate and limited (i.e. controlled) access state highways supports the policy goals set forth in The Way Forward Plan by providing an efficient and equitable source of transportation revenue enhancement, which can also be used as an effective tool for congestion management by setting toll rates lower for off-peak travel times."
The report, though, noted that "significant further easing of Federal restrictions on tolling the Interstate Highway System and other Federal-aid facilities must occur in order to implement" statewide tolling.

Short-Term Fixes

Rooney and the other business leaders are cognizant that creating a one-year task force doesn't generate a dime of the revenue they think is needed to address the state's weighty problems. Instead, at the same time as it specifically directs a task force to come up with options for future solutions, the Legislature should also "adopt immediate revenue streams and begin to apply it to things that need to be done now."

"And we think that the immediate revenue can come from the gas tax and TNCs," Rooney said, referring to transportation network companies.

Among the MBCT, there is "strong majority support" for increasing the fees on rideshare services at least $1 per ride, with some groups supporting increases of as much as $3 per trip. And a "fragile majority" of the member groups support adopting a model similar to surge pricing, under which the per-ride fee would increase at peak times and for luxury cars, and decrease for pooled rides.

For the Greater Boston Chamber, an important part of the discussion around TNC fees is where that new money would get spent. Under a plan developed by the chamber, the current 20-cent fee would continue to go to the municipality where the ride originated and the Commonwealth Transportation Fund, but the additional amount raised by the fee would go to public transit, either the MBTA or the regional transit authority that serves the municipality where the ride began

Read: GBCC transportation agenda presentation

"The key concept here is the money stays at home, wherever it is raised," Rooney said. "Money raised in Springfield stays in the Springfield region, Worcester stays in the Worcester region, for public transportation."

There's also support among the coalition -- roughly 70 percent of the groups, Rooney said -- for a gas tax increase of between five and 25 cents, separate and apart from the governor's proposed regional transportation emission effort. The Greater Boston Chamber of Commerce backs a 15-cent gas tax increase phased in over a three-year period.

Motorists currently pay 24 cents per gallon in state gas tax, fractions of a penny below the national average, according to the U.S. Energy Information Administration. For each gallon of gas, drivers also pay a fee of roughly 2.5 cents to support the Underground Storage Tank Petroleum Product Cleanup Fund. When all state and federal assessments are calculated in, about 45 cents of every gallon of gas pumped in Massachusetts goes to taxes or fees.

Every penny added to the state's gas tax could produce roughly $32 million in new annual revenue, the Massachusetts Budget and Policy Center wrote in a report earlier this month. The report also warned that increasing the gas tax will disproportionately impact low- and moderate-income households, and may be undermined by the state's long-term goal of reducing its carbon footprint.

Political Realities

Many of the themes that emerged from the MBCT's months of discussions seem to overlap with ideas that House lawmakers gave voice to this week after meeting for 90 minutes with DeLeo to discuss the House's upcoming transportation revenue package.

"What we've been doing is looking at the different options that are predictably out there and seeing whether they could fit in or out of an overall revenue package that members would be comfortable with," Straus said Monday.

Revenue Committee Chairman Rep. Mark Cusack said that new revenue would be "sourced from transportation for transportation" to the extent possible.

Majority Leader Ronald Mariano told the News Service that no decision has yet been made on how large of a revenue package to pursue, but that the House still plans to put a bill before members for a vote before the Legislature recesses for the year on Nov. 20.

Read this story on State House News Service