Thoughts on Transportation Funding

As many of you know, MassDOT proposed some revenue ideas to fund their ambitious transportation plan. The Governor endorsed a plan that is not based on a ‘user tax’ increase. Although things can change, and they probably will, I am curious to hear the thoughts of BMG readers on if they preferred the Governor to endorse a user tax increase over the income tax hike.

-Paul D. Craney


4 Comments . Leave a comment below.
  1. I prefer general increases to user-based.

    However what I heard from the SOTC was that the SALES tax would be dedicated to transportation while the proposed income hike was for every thing else.

    • Accounting trickery

      I think this approach (funding transportation exclusively from the sales tax) is both ineffective and also at least pushing the edge of, if not crossing into, dishonesty.

      I think we should be clear-eyed about the Governor’s proposal: he has announced a significant broad-based increase in taxes. It will hit the middle class as well as the very wealthy. I believe it is needed, and I fully support it. I would like to see the increase apply even more to the very wealth and less to the middle class — I also recognize the political impossibility of this in the here-and-now when we need it.

      At the same time, the accounting fiction that we’re funding transportation from the sales tax is just that — accounting fiction. The money is available in sales tax revenues because the income tax increase allows the current recipients of sales tax revenue to be shifted to the income tax.

      I don’t like this fiction, because it perpetuates the failed idea that sales tax revenues should fund public transportation. It seems to me that we just learned, the hard way, that this is a very bad idea because sales tax revenues plummet in a recession — demand for public transportation increases at the same time.

      Make no mistake about it — the income tax increase is how we will pay for the necessary increases in transportation spending.

  2. Appropriate fees and taxes

    User fees are great for some things, not so great for others. How’s that?

    Not sure I agree that fixing decades of bipartisan neglect constitutes an “ambitious transportation plan.” In another time and place the idea of actually paying for what you use would be considered fiscally conservative.

  3. No

    In our current economic environment, many people drive much farther than they would only because they can’t find work closer to home. They are also working for less pay. A VMT or user tax is too regressive and imposes harsh penalties for simply to trying to keep a job. While I would prefer no new taxes, the income tax will spread the tax burden across the Commonwealth, as well as across the upper income brackets, who would otherwise benefit greatly from a regressive tax like a user tax.

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Wed 29 Mar 6:46 PM