Last week, House Speaker Robert A. DeLeo and Rep. RoseLee Vincent along with their colleagues in the House of Representatives passed legislation to invest up to $600 million annually in an immediate and critical infusion of transportation funding.
The House plan provides much-needed revenue that will begin to address the ongoing needs of the statewide Massachusetts transportation system. The system faces increased congestion, ongoing unreliability and safety concerns while cities and towns across the state report increased transportation infrastructure needs.
“We know there is a significant need for transportation revenue, and this package delivers it,” said Speaker DeLeo (D – Winthrop). “Thank you to Chairs Michlewitz, Straus and Cusack and to Leader Mariano for their diligence and focused attention to this critical issue.”
“I was proud to support this legislation because I believe the benefits of increased funding for our roadways, bridges and public transit system is extremely necessary,” said Rep. Vincent (D-Revere). “The positive, tangible investments that we will see as a result of this legislation for years to come will help to bring our transportation infrastructure up to twenty-first century standards. I thank Speaker DeLeo, Chairman Michlewitz, Chairman Cusack and Chairman Straus for their collaboration in coming up with a consensus bill that takes a good approach and strikes a balance among all sides of the transportation revenue debate.”
The House estimates the legislation, known as An Act Relative to Transportation Finance, will bring between $522 and $612 million in annual revenue. The bill contains a moderate increase in the gas tax and the diesel gas tax of 5 and 9 cents, respectively.
The legislation also features the first increase to the corporate minimum tax in more than 30 years. The tax is tiered to protect small businesses while ensuring the largest companies contribute appropriately for their reliance on the state’s transportation infrastructure. Small businesses with less than $1 million in annual Massachusetts sales would see no change in their tax rates. Businesses with Massachusetts annual sales above $1 million would pay fees according to an eight-tier scale. The maximum annual fee of $150,000 is for companies with annual Massachusetts sales of $1 billion or more.
Under the bill, Transportation Network Company (TNC) fees would increase in a tiered structure to incentivize shared rides. Shared rides fees will not increase, but fees are higher for non-shared and luxury rides. The bill updates a TNC out-of-state driver excise tax provision and sets TNC data collection and reporting requirements. The bill also eliminates a rental car sales tax exemption for car rental companies to close an existing loophole that currently allows companies to purchase fleet vehicles without paying sales or use taxes on the transaction.
“Strong transportation infrastructure powers strong economies,” said House Majority Leader Rep. Ron Mariano (D-Quincy). “The House’s transportation revenue package calls on a broad selection of stakeholders to contribute more to the roads, bridges, and railways upon which our current and future prosperity depend. Importantly, the revenue generated by this proposal will be shared by every city and town across the Commonwealth for their own local and regional transit priorities.”
“Throughout this process, it has become clearer by the day that the need for more transportation revenue is real, and it is immediate,” said Rep. Aaron Michlewitz, Co-Chair of the Joint Committee on Ways & Means (D-Boston). “The balanced approach that the House took in adopting this legislation today ensures that we can make a greater investment in our transportation infrastructure without doing unnecessary harm to our constituents and businesses alike. These investments are vitally important because the longer we wait, the worse our transportation system will get.”
With the goal of keeping oversight of the MBTA’s fiscal management practices intact, the bill extends the Fiscal Management Control Board to at least 2023, with an option for an additional extension to 2025. The provision also adds two seats, one for the City of Boston, to increase municipal representation on the board. Finally, the bill establishes an 11-member commission of outside experts to study congestion pricing and tolling systems to provide a comprehensive investigation into roadway pricing mechanisms designed to change commuter behavior.
“The current condition of our transportation system is unacceptable, and we have to provide the resources to further address our roads, bridges and mass transit systems,” said Rep.William Straus (D-Mattapoisett), Co-Chair of the Joint Committee on Transportation. “This bill shares the responsibility to raise funds in a balanced and fair way.”
“Our transportation system is in dire need of immediate revenue sources,” said Rep. Mark Cusack (D-Braintree), Co-Chair of the Joint Committee on Revenue. “This well- balanced approach ensures stakeholders have a shared interest and investment in fixing our transportation system. Every community across the Commonwealth will benefit from this new revenue, and we can make real strides with real dollars in building the transportation system the people of Massachusetts deserve.” The bill will now go to the Senate.