Regulations

Proposed Gas Tax Hike Draws Ire

LCT Staff
Posted on March 11, 2009

FITCHBURG, Mass. — Small businesses already pay "exorbitant costs" to operate in Massachusetts, and a proposed 19-cent-per-gallon gas tax increase could hurt them even more in a bad economy, said Rebecca Laramee, owner of All Points Limousine in Leominster.

"That's a huge increase for a small business that's just trying to keep five guys on the road," she said recently. "It doesn't make sense. And I can't just pass (the increase) along to my clients because they're struggling, too."

Area officials and business owners said they're opposed to Gov. Deval Patrick's proposal to raise the gas tax by as much as 19 cents per gallon, which he announced earlier this month.

It's going to be a hard sell to get North Central and Western Massachusetts residents to go along with a tax increase to help offset the costs and debts of the state's cash-strapped transportation system, they argued.

If the gas tax passes and goes up by 19 cents per gallon, it would raise the total gas tax — including state and federal taxes — to more than 60 cents per gallon, the highest in the nation.

Patrick said this week the 19-cent figure is flexible but said a tax increase is needed to solve a number of transportation-system problems, adding, "The number alone is not enough; we have to have the series of reforms."

Patrick's plan also calls for restructuring of state transportation agencies, enrolling Massachusetts Bay Transit Authority and the Massachusetts Turnpike Authority in the state's health care plan as a cost-savings measure and cutting 300 positions.

Patrick included 4 cents of the proposed 19-cent increase to roll back proposed Massachusetts Turnpike toll increases, while 6 cents would prevent MBTA fare increases, 1.5 cents would go to "targeted regional road projects" and 3 cents would go toward rail projects outside Boston.

The gas tax has not increased since 1991, Patrick said.

Laramee said fuel is the second-highest expense in running her business after payroll costs. Her chauffeurs drive people to Logan International Airport in Boston, as well as to weddings and other special events, she said. "I can't just go out and increase my revenue."

She added if she raised prices she would lose clients to drivers who may not be insured and licensed as is her company. Laramee said she already pays top prices for insurance, the state's unemployment insurance, and licensure.

Since gas prices are about half what they were last summer, Laramee said she's been able to give her drivers some more hours, but the tax could mean a 14% to 16% increase in her operating costs, she said.

Laramee said she'd rather see Patrick reform the transportation system and make every cost-cutting measure necessary to avoid the tax increase.

"We're still going to be here, plugging our way along," she said. "But that tax is huge. ... He needs to go attack his costs before he tries to make money."

State legislators representing the region said they want to see cost-saving reforms in the state's transportation system before they'd approve a gas tax that high.

Leominster City Councilor at-large John Dombrowski said the gas tax "is a terrible proposal."

"It wasn't thought-out at all, it's ridiculous," he said. "The guys on Beacon Hill have got to get a clue. They have no idea what it's like to work for a living and to raise a family in this climate."

Dombrowski said if gas costs go up a lot, it hits residents in two ways: 1) They have to pay more at the pump; 2) They have to deal with rising "fuel surcharges" tacked on to almost everything they buy.

"There's not a business around here that's not going to be affected," he said.

Raising taxes without overhauling state government is a "knee-jerk reaction" to a deficit everyone saw coming, Dombrowski said, calling for reform of the state pension system and cuts to the transportation agencies.

Source: SentinelandEnterprise.com, Fitchburg, Mass.

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