Straus lays out rationale for transpo revenues

‘There’s clearly room for improvement,’ he says

WITH THE HOUSE PREPARING to take up transportation funding legislation this week, Rep. William Straus explains the rationale behind many of the bill’s provisions.

Straus, the House chair of the Legislature’s Transportation Committee, is one of the architects of the bill, which hikes the gas tax by 5 cents, raises fees on ride-hailing apps, increases the minimum corporate income tax, and eliminates a sales tax exemption on rental cars. All in all, it is expected to raise roughly $600 million a year.

Straus appeared on the CommonWealth Codcast and was interviewed by Shira Schoenberg and Bruce Mohl. Here’s a summary of his comments.

What’s the rush? House Speaker Robert DeLeo said “revenue can’t wait any longer” for the transportation system, but it seems like we’re spending a lot already.

Straus said users of the state’s transportation system know it is not up to par, and hasn’t been for some time. “Their patience has really been surprising to me as to how they’ve endured the system that we have and there’s clearly room for improvement,” he said.

So is this bill riding to the rescue or is it more of a long-term play?

“In my view it should not be viewed as a coming-to-the-rescue thing. Transportation is something that frankly never goes away as an issue and a big part of why it’s more pressing now is because over a long period of time over several administrations, several legislatures, not enough attention was paid. We are trying to do two things at once, which is make up for lost time, and that in part requires the extra effort now, and to get people accustomed to the fact that you can never go away from it. You can’t deal with this issue and say, ok we’ve done it, let’s move on to something else. Transportation always requires care and feeding.”

State revenues are soaring right now, so why is more money needed for transportation? Can’t we just use existing revenues?

“If times are good, it’s not a reason to say we don’t need to plan for the future. If anything, it’s the best time to plan for the future, when we’re not in financial crisis.”

Is the House proposal the first of several transportation revenue measures? The bill itself would create a commission to set in motion a statewide tolling plan and DeLeo said he sees the transportation bill as a bridge to passage of a constitutional amendment creating a millionaire tax, which would also bolster transportation spending.

Straus said House leaders crafted the bill with the knowledge that other revenues sources may come on line in the future. He said the bill has been criticized by some for being too timid in raising revenues while others have attacked it as overly aggressive. “That suggests to me we’re getting it just right,” he said. “In raising money, the sky is not the limit.”

Why are you raising taxes on businesses? Shouldn’t transportation charges be placed on transportation users?

Straus said the House’s decision to raise the minimum corporate income tax grew out of meetings with members, who felt transportation was a shared responsibility and businesses should do their part. “Your public transportation system, whether it’s the roads or the mass transit opportunities, these are like public utilities where taxpayers provide them to individuals for private uses but also for businesses. So the transportation system that exists, and when it’s as high quality as it should be, that is a business asset,” Straus said. “The corporate minimum tax is a proxy, imperfect but not a bad one, that reflects a level of business activity.”

The bill proposes no increase in the existing 20-cent fee for shared ride-hailing trips, while increasing the charge to $1.20 for single trips and $2.20 for luxury trips. The bill prohibits ride-hailing apps from passing along the higher fees to customers. Why aren’t Uber and Lyft to pass the higher fees along to customers? Isn’t the idea to incentivize riders to choose better options?

Straus said there are two parties to ride-hailing transactions – the customer and the ride-hailing apps themselves. He said the House bill attempts to incentivize the apps – Uber and Lyft – to find a way to steer their customers to shared rides. “These are highly innovative companies,” Straus said. “So when we say we are providing a cost incentive to the businesses that it will cost them less when passengers take shared rides, it is our way of saying we want to provide a creative incentive for them in making or expanding access to the shared rides.”

Can they sidestep that provision by just saying they are raising prices unrelated to the new, higher fees?

“It’s an economics question,” Straus said. “As long as there are two or more of these firms out there, the competition is their motivation not to outprice themselves. I know plenty of people who, when they’re about to take an Uber or a Lyft ride, open on their phone both apps and measure right down to the, sometimes the 25-cent charge, who’s going to be less on this particular trip.”

The bill extends the life of the existing MBTA Fiscal and Management Control Board, which is currently scheduled to expire June 30.

Straus said House leaders wanted to get this debate rolling now and not wait until the budget is resolved, as Gov. Charlie Baker has proposed. Straus sounded flexible on whether the board should be expanded and who should be included as members. “We have deferred that decision on expanding, frankly, to see what the membership’s interest is in that nitty gritty type of decision during floor debate next week. It wouldn’t surprise me at all if there are floor amendments directly on that issue of how specifically the size of the extended control board would look and who are the constituencies they would represent.”

Do you advocate for any specific projects in this bill?

Straus said such decisions are left up to the governor and the Legislature working together, but he listed three projects for which this funding is intended – the I-90 Allston interchange project, the extension of the commuter rail system west of Worcester, and South Station expansion.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Baker doesn’t seem to like the bill very much.

Straus noted the governor has acknowledged the transportation system needs more money, both by proposing a hike in ride-hailing fees himself and by backing a transportation climate initiative that could raise the price of gasoline significantly. “So he has said lots more money is needed for transportation. He may not appreciate this, but I consider him an ally in getting more money into the transportation system as soon as possible.”