ONE DAY AFTER House leaders unveiled a $600 million transportation revenue bill, Gov. Charlie Baker poured cold water on the tax increases and fees the bill calls for to fund improvements, setting up a showdown with the Legislature on one of the most pressing issues facing state leaders.
The House bill would hike the state gas tax by 5 cents, raise the minimum corporate tax paid by Massachusetts companies, increase fees paid by ride-hailing companies such as Uber and Lyft, and remove a sales tax exemption for the purchase of rental car fleets.
Baker said Thursday morning that he opposes any increase in the gas tax and corporate taxes, and said his administration has already proposed boosting ride-sharing fees in its 2021 budget plan. He didn’t mention the sales tax exemption proposal.
“I don’t believe we need to raise taxes to fund transportation at this point in time,” Baker said following an announcement at the State House on proposed reforms to contracting rules for minority- and women-owned businesses.
Rep. William Straus, the House’s point person on transportation, said the governor may be more in synch with the House’s proposal than he thinks. He noted Baker has his own proposal for raising fees on ride-sharing companies and is backing a multistate transportation and climate initiative that would likely hike the price of gasoline anywhere from 5 cents to 17 cents a gallon. (The House proposal, in fact, would lower its gas tax increase to offset any increase caused by the transportation and climate initiative.)
“So he has said lots more money is needed for transportation,” Straus said during a taping of The Codcast, which will be released Sunday night. “He may not appreciate this, but I consider him an ally in getting more money into the transportation system as soon as possible.”
Baker said a key difference between his plans and the House bill is that the House gas tax proposal does not designate any new revenue explicitly to address climate change issues.
Baker touted the $18 billion transportation bond bill he filed last July, which calls for $11 billion for road and bridge improvements and $7 billion for public transit, and said it provides the money needed to upgrade the state’s faltering transportation systems.
He also said the administration has proposed greater support for public transportation than called for in the House bill. The administration’s 2021 budget would provide $200 million for the MBTA, including $73 million generated by a hike in ride-sharing fees. The House plan would generate $187 million for the T, with $27 million from ride-sharing fees. The House would earmark an additional $27 million from ride-sharing fees to regional transit authorities.
“I was disappointed that somehow the House actually funds less public transportation that we did in our budget, and we obviously want to have a conversation with them about that,” Baker said.
Baker also criticized the House for a $14.5 billion transportation bond bill also released on Wednesday, which shaves $3.5 billion off the amount he has proposed borrowing. Straus, the House Transportation Committee chairman, said on Wednesday that lawmakers are proposing a smaller plan because they aren’t confident there is currently enough revenue to backstop the higher borrowing level in the governor’s proposal.
“We believe it’s absolutely affordable,” Baker said of his bond bill. He said he spoke with Administration and Finance Secretary Michael Heffernan on Thursday morning and asked him to document the “sources and uses on our bond bill and get it to the Legislature.”
Mounting traffic woes in Greater Boston and the troubled state of the MBTA, which has suffered from years of deferred maintenance, have turned transportation into an urgent concern for the state’s economy and a top priority among voters.