Massachusetts Senate Rejects Gas Tax Suspension
As momentum grows around the country for the suspension of state gas taxes, the state Senate on Thursday rejected a Republican-led push to pause gas tax collections through Labor Day even as Gov. Charlie Baker signaled he was warming to the idea.
The vote in the Senate came the same day Gov. Ned Lamont signed a bill to suspend Connecticut's 25-cent gas tax through June 30 after the Legislature voted unanimously in favor of the pause.
"Clearly, we have an obligation to respond," Senate Minority Leader Bruce Tarr said. "This Senate has not historically witnessed such economic pain and not tried to intervene."
After Russia's invasion of Ukraine, gas prices in Massachusetts shot up to an average high of $4.36 a gallon on March 11, but have been slowly ticking downward averaging $4.25 across the state on Thursday, according to AAA.
Republicans in Massachusetts have been pushing for weeks to suspend the state's gas tax in the face of those price spikes, but have met resistance from Democrats who have called it a "gimmick" and raised concerns about violating the terms of the state's bond agreements.
"I know it might sound good and feel good, but you are not providing any real relief," Senate Ways and Means Chairman Michael Rodrigues told his colleagues.
Rodrigues, a Westport Democrat, said not only would Wall Street and the bond rating agencies look unfavorably on a move to backfill lost gas tax revenue with future surplus funds, but he said there was no guarantee that the savings would get passed on to motorists.
"Do you all trust the oil companies?" Rodrigues asked.
The bill Lamont signed in neighboring Connecticut suspends that state's tax on gasoline from April 1 to June 30, suspends fares on public buses statewide during that same period, and creates a one-week sales tax holiday on clothing and footwear under $100 from April 10 to April 16.
After the House cast aside a proposal two weeks ago to suspend the gas tax until prices fell to $3.70, the Senate voted 11-29 against an amendment offered by Republican Sen. Ryan Fattman, of Sutton, that attempted to address some of the concerns of Democrats.
Fattman's amendment would have suspended collection of the gas tax through Sept. 5, and given the Department of Revenue 30 days to notify the state comptroller how much tax revenue was lost during that period. The comptroller would be authorized to transfer an equal sum to the Commonwealth Transportation Fund to replace any lost revenue that had been put up as collateral for state borrowing.
Eight Democrats, mostly from border districts, joined the Senate's three Republicans in supporting the Fattman amendment. All four Democrats running for statewide office -- Sens. Sonia Chang-Diaz, Adam Hinds, Eric Lesser and Diana DiZoglio -- voted against suspending the gas tax.
Sens. Paul Feeney, Barry Finegold, Anne Gobi, Mark Montigny, Michael Moore, Marc Pacheco, Walter Timilty and John Velis -- all Democrats -- joined Tarr, Fattman and Sen. Patrick O'Connor, a Weymouth Republican, in support of the suspension.
“While the Commonwealth continues to enjoy a massive revenue surplus, we must deliver relief to hardworking people who are getting crushed by skyrocketing inflation,” said Senator Montigny (D-New Bedford). “Our constituents are facing steep price increases on everything from groceries to home heating costs and gas prices at the pump. State coffers will not suffer by providing some temporary relief. Seniors and others on a fixed income cannot absorb costs that have basically doubled overnight, and our families should never have to worry about how to pay their bills while the state sits flush with cash.”
"I think the proposal the Senate Republicans have made is a very clever one and it deals with all the issues people have about how we continue to maintain our coverage ratios on our bond covenants," Baker said earlier in the day at an event in Holyoke.
Baker noted the bipartisan vote in Connecticut, and expressed concern that Massachusetts drivers could get caught in the middle of states where cheaper gas was available. In addition to Connecticut, which is controlled by Democrats, New Hampshire Gov. John Sununu, a Republican, has said he supports suspending that state's gas tax.
"I think it's going to be really important for us as a commonwealth to take seriously the fact that not only are we going to put our people in a position where they will be significantly disadvantaged if they buy gas in Massachusetts, it also creates a dynamic where we're not really helping them with this particular cost," Baker said.
As gas prices began to rise in March, Baker had suggested the gas tax might be one place his administration would look to provide short-term relief to residents struggling with inflation. But as Democratic opposition mounted, Baker chose to focus on his budget plan to cut taxes for renters, senior home owners and low-income families as a way of providing financial relief.
He reiterated his desire to see the Legislature enact his tax reform package to provide relief to those struggling with rising rents, property taxes and everyday goods.
"I think in many ways this is a point in time when we as a commonwealth need to step up and do some things for the people who pay the bills," Baker said Thursday.
While the failure of Fattman's amendment was expected, Republicans succeeded in putting Democrats on the record on an issue that candidates for governor and other offices have been hammering for weeks.
While Rodrigues said suspending the gas tax was "nothing more than a gimmick" that at best would save someone $3.64 per tank, Fattman and O'Connor argued that in certain parts of the state people drive longer distances to work and that money can add up.
Fattman also noted that high gas prices could discourage families from Massachusetts and from out-of-state traveling to places like Cape Cod or the Berkshires this summer, hurting businesses trying to recover from the COVID-19 pandemic.
"We need to do this. We need to do something. This is the start," Fattman said.
Sen. Brendan Crighton, a Lynn Democrat and co-chair of the Transportation Committee, echoed concerns about the state's bond rating and distrust of the big oil companies.
"I do feel the cost of doing this far outweighs the relatively small and unpredictable benefit, because there's no guarantee this would reach the consumer, it would provide," Crighton said.
Paul Craney, a spokesman for the Massachusetts Fiscal Alliance, said voters should be reminded of this vote when they go to the polls later this year.
"With today's vote, it's important for Massachusetts motorists to understand that 29 of their Democratic state senators had an opportunity to lower gas prices but instead chose to keep them higher. These 29 Democratic state senators need to be held accountable by their constituents. While other blue, red and purple states take action to lower gas prices, these 29 Democratic state senators voted to keep them higher," Craney said.
— Matt Murphy, State House News Service, with quote added from Sen. Montigny’s Office