Toll, gas tax revenues at 95% of pre-COVID levels

High gas prices don't seem to be deterring drivers


THE ROBUST RETURN of crunching highway traffic to the greater Boston area might have made drivers miserable, but there’s a silver lining for transportation officials: many of those motorists are pouring money into the state’s coffers.

Through the first three quarters of fiscal year 2022, the Department of Transportation hauled in $306.5 million from roadway tolls, nearly $70 million more than over the same period a year earlier. The surge positions MassDOT to end the year with $76 million more in toll revenue than it expected.

Standing in stark contrast with still-depleted ridership on public transit, drivers have been using tolled roadways in large enough volumes that MassDOT officials now expect to bring in about 95 percent as much in tolls this year as they did in fiscal year 2019, the last year before the pandemic sparked long stretches of reduced travel and rewired commuting patterns.

“We took a very conservative outlook on the tolls under the idea that it’s always easier to find ways to spend this money versus trying to find cuts if needed, but we’re currently at 93 percent of the budget for the year and we think we’ll surpass that somewhat substantially to the tune of approximately 95 percent of pre-pandemic levels, which is really a great news story,” MassDOT Chief Financial Officer David Pottier told the agency’s Finance and Audit Committee. “Anyone who’s been traveling into Boston on any of the roadways into the city will know and attest to the fact that traffic is almost back. I don’t know if that’s necessarily a good thing or a bad thing.”

MassDOT now projects it will surpass $405 million in toll revenue for the fiscal year that ends June 30 — a figure that Pottier said “still might be a little bit of a conservative number” — which would blow past the amount baked into the annual budget by 23 percent.

Pottier called the trend a “testament to the fact of us coming out of the pandemic,” and he said MassDOT will likely commit surplus toll dollars toward so-called “Pay As You Go” capital projects.

“Michelle Ho is chomping at the bit to get these paygo moneys into some capital projects,” he said, referring to the department’s director of capital planning.

In the first three quarters of FY19, Massachusetts collected $317.4 million in toll revenue, according to data Pottier presented Wednesday. He did not provide data for FY20, which was the first year impacted by the pandemic, and said FY21 saw a sharp drop-off to $236.9 million in tolls collected through the third quarter.

The trend in toll revenue is nearly identical to collections of the state’s gasoline and diesel taxes.

In an official bond statement dated February 1, Treasurer Deborah Goldberg and Administration and Finance Secretary Michael Heffernan projected Massachusetts will collect $737.9 million in motor fuel excise taxes in fiscal 2022, an increase over the $662.9 million collected in fiscal 2021 and roughly 95 percent of the $775.5 million collected in fiscal 2019.

The figures Pottier presented cover July 1, 2021, through March 31, 2022, the tail end of which saw a surge in gas prices driven in large part by Russia’s invasion of Ukraine.

On January 24, AAA Northeast estimated the average price for a gallon of gas in Massachusetts was $3.36. By March 11, that average had climbed all the way to $4.36, prompting repeated but unsuccessful calls for lawmakers to suspend the state’s 24-cents-per-gallon gas tax.

It’s not yet clear how much inflated gas prices — which on Monday climbed to a Bay State record high average of $4.39, according to AAA Northeast — have impacted decisions to drive in recent months, but the surge in highway toll revenue suggests motorists had not been changing their plans en masse through the end of March.

Unlike public transit ridership, roadway traffic in Massachusetts was quick to rebound after dropping at the onset of the COVID-19 crisis. Highway Administrator Jonathan Gulliver declared in June 2021 that “traffic, for all intents and purposes, is back to about 2019 levels,” and he said again in March that congestion had again returned after dipping during the wintertime omicron surge.

More than two years after COVID first hit, the T is now transporting about 50 percent as many subway commuters as it did before the pandemic, 70 percent as many riders on its buses and 55 percent as many commuter rail passengers, according to the most recent estimates.

Budget-writers at the transit agency said in an April 28 presentation that fare revenue, which once made up a major chunk of the MBTA’s operating budget, has dropped by 50 percent as a result of the pandemic’s impact on ridership. Parking and advertising revenues have fallen 62 percent and 44 percent, respectively, with fewer passengers driving to stations or seeing ads in the system.

The T plans to turn once more to emergency federal aid to balance its fiscal 2023 budget, but that drawdown will leave just $100 million remaining from the nearly $2 billion pot for the following year, when officials expect to face an operating budget gap of hundreds of millions of dollars.

Gov. Charlie Baker and the Legislature are poised to increase the amount of state assistance the T receives by $60 million in the next annual budget, but neither he nor top Democrats have expressed any interest in rethinking broader funding questions for the agency, which also takes in a dedicated chunk of the state’s sales tax revenue each year totaling more than $1 billion.

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Chris Lisinski

Reporter, State House News Service
In an interview with WCVB’s “On the Record” that aired Sunday, Baker said the MBTA had “been in far better financial shape up until the pandemic than it’s probably been in at any time in its history.”

“The riders of the system have historically paid somewhere between 40 and 50 percent of the cost of the operation and the rest of it’s been funded by taxpayers who don’t ride the system, which from my point of view is a reasonable trade,” Baker said. “I think the big question here is: where’s ridership going to be a year from now?”