Bond rating firm not alarmed by gas tax suspensions

In Connecticut, Democratic Gov. Ned Lamont and the Democrat-controlled legislature responded to the sharp runup in fuel prices by passing a law suspending the state’s 25-cent excise tax on gasoline and eliminating bus fares statewide for a three-month period running from April 1 to June 30. For good measure, the Connecticut legislation tossed in a one-week sales tax holiday on clothing and footwear under $100.

Similar measures have been approved in Maryland, Georgia, and New York. Many other states, including California, are considering proposals that would offer some relief to residents. 

In Massachusetts, calls on Beacon Hill for doing something similar have been dismissed as gimmicky and fiscally irresponsible. James Aloisi, the former secretary of transportation, said the push for suspending the gas tax is nothing more than a political stunt.

But now a Wall Street bond rating firm is suggesting the fiscal impact of a temporary gas tax suspension may not be that bad. On Tuesday, S&P Global Ratings said temporary state gas tax suspensions are unlikely to lead to rating changes on highway user tax-supported debt.

“To the extent that a temporary gas tax cut was made permanent, or debt service coverage was lowered to levels below an additional bonds test, further review could be warranted,” S&P said. “A greater risk is the potential long-term threat of reduced gas consumption from electric vehicles.”

The S&P analysis is very different from what Massachusetts political leaders have been saying.

“I think eliminating the gas tax in the long run would probably cost the Commonwealth a lot more money than they would save,” said House Speaker Ron Mariano. “When you look at what it will do to our bond rating and what it will do to the price of us borrowing money to finance the road and bridge projects that this money is committed to, we find ourselves in a very, very precarious situation.”

Senate President Karen Spilka warned a suspension of the gas tax would “most likely have a detrimental effect on our bond ratings” and suggested the better response would be to purchase an electric vehicle and avoid gas stations altogether.

“I’ve spoken to some people who own total electric vehicles, and they are not paying as close attention as you and I might be to the price of gas,” Spilka said. 

Gov. Charlie Baker, after initially signaling he might be open to eliminating the state gas tax temporarily, shifted gears and instead continued pushing for a package of tax cuts he included in his budget proposal for fiscal 2023. The House, at least so far, has rejected the governor’s approach as well. The House Ways and Means Committee will release its state budget proposal Wednesday.

 BRUCE MOHL

 

FROM COMMONWEALTH

Upset in Somerset: Political newcomer Jacob Vaught edges Kathy Souza in a race for the Somerset Select Board, a stunning upset in a community still trying to mend from infighting over a scrap metal export business at Brayton Point. Rep. Patricia Haddad is so worried about her town that she handed out lawn signs to voters that said : “If you care about Somerset, be kind.” Read more.

Koonce gets parole: The state Parole Board grants Thomas Koonce’s petition for parole, allowing him to leave prison after serving 31 years for the murder of Mark Santos in 1987. Read more.

OPINION

Missed opportunity: Jarred Johnson of TransitMatters says the MBTA is missing a golden opportunity by failing to include any money in its capital spending plan for converting its commuter rail system to regional rail and electrifying its operation. Read more.

FROM AROUND THE WEB

 

BEACON HILL

Gov. Baker calls on lawmakers to pass his $9.7 billion infrastructure bond bill, to prepare the state to get an influx of federal infrastructure dollars. (Salem News)

The State Senate is poised to pass a climate change bill that critics say will drive up construction costs and hamper economic development. (Gloucester Daily Times)

Gov. Baker signs Nero’s Law, which allows medical personnel to treat and transport police dogs. (MassLive)

MUNICIPAL MATTERS  

Concerns raised in Marlborough about new MBTA zoning law. (MetroWest Daily News)

Lynn City Council votes to take two pieces of private property by eminent domain. (Daily Item)

Nipmuc Nation seeks return of ancestral lands in Belchertown. (Daily Hampshire Gazette)

HEALTH/HEALTH CARE

COVID cases and hospitalizations are continuing to rise. Boston Mayor Michelle Wu says the city is “not there yet” when it comes to reimposing a mask mandate. (Boston Herald) COVID cases are rising throughout the Northeast, as the BA.2 omicron subvariant takes hold. (Washington Post)

WASHINGTON/NATIONAL/INTERNATIONAL

President Biden accuses Russia of carrying out genocide in Ukraine. (Washington Post)

As a crowded subway train approached a station in Brooklyn Tuesday morning, a gunman on board the train donned a gas mask, tossed two smoke grenades on the floor, and fired 33 shots before fleeing the scene. Ten people were hit by gunfire and 13 others suffered injuries related to smoke inhalation, falls, or panic attacks. The gunman is still at large. (New York Times)

Lt. Gov. Brian Benjamin of New York resigns after being indicted on charges related to illegal campaign donations. (New York Times)

ELECTIONS

Republican gubernatorial candidate Chris Doughty challenges his GOP opponent Geoff Diehl to debate. So far, no debates are agreed on. (MassLive)

Attorney General candidate Quentin Palfrey tests positive for COVID-19. (MassLive)

Sean Goonan, a laborer and carpenter’s helper from Chicopee, will run for state representative as an independent. (MassLive)

BUSINESS/ECONOMY

The National Urban League issues a report that finds the state of Black America is grim. (Associated Press)

Bullfinch Cos. acquired the old Muzi Ford location in Needham and wants to develop it as office or lab space, depending on what the market prefers. (Boston Globe)

ARTS/CULTURE

Boston Arts Academy faces pushback over a proposal to name its theater after former Boston Mayor Marty Walsh. (Boston Herald)

TRANSPORTATION

With nothing new to report on the investigation into the death of a man whose arm got caught in the door of a Red Line train, the Boston Globe checks the clips and finds other examples where people and their clothes got caught in subway doors.

Blaming staff shortages, JetBlue is scaling back its operations to meet the size of its workforce. (GBH)

Sen. Ed Markey hops on a public bus in Methuen, surprising riders, as he pushes for free public transit. (Eagle-Tribune)

ENERGY/ENVIRONMENT

Attorney General Maura Healey releases a website that will help Pioneer Valley residents track the air quality in their neighborhood. (MassLive)