Out of a $27.4 billion budget, Massachusetts is short an astounding $3.6 billion. If new funds are not raised, the government will be forced to make severe cuts in social services: all youth violence prevention programs would be eliminated, affecting 18,000 teenagers, home-care programs for elders would be cut, affecting 4,000 senior citizens, and developmental disability programs would be seriously reduced, affecting 20,000 disabled persons. If nothing is done before July 1, highway toll rates could double as well.
If we want government services to continue at anywhere near their present levels, the State House is going to need a new source of funding, and this new source of funding is going to be a tax.
There are currently two conflicting proposals being discussed. The first, pushed by House Speaker Robert DeLeo, would raise the sales tax by 25%. The second, put forward by Governor Deval Patrick, would increase the gas tax by at least 19 cents. This gas tax, rather than the sales tax, should be passed.
The sales tax is afflicted with several problems. First, it would drive some consumers to spend in New Hampshire, where there is no sales tax, rather than locally. This is especially a problem for Western border communities. Second, it would discourage shoppers from Connecticut and Rhode Island to travel to Massachusetts to buy. Third, the sales tax disproportionately affects those with a smaller income.
Last and most worrying, the sales tax would likely cause Massachusetts to lose jobs. According to Suffolk University researchers, while the tax would save 6,000 state and local government jobs, it would cost 12,000 jobs in private business. The same study predicted the tax would result in revenues 28% less than what proponents believed it would.
A gas tax increase, besides making up for the deficiencies of the sales tax increase, would benefit the Commonwealth in other ways. The gas tax would decrease our dependence on harmful fossil fuels, by discouraging consumers from buying gasoline and encouraging more fuel-efficient vehicles. Less money spent on oil and gas means less American money that is sent to despotic anti-American regimes. Fewer fossil fuels burnt means fewer tons of carbon dioxide spewed out into the atmosphere, causing global warming.
The sales tax itself does have its own benefits. However, while neither solution is perfect, the gas tax would help everyone more in the long term. And either one of the taxes would be much preferred to no tax at all.
Anon • Sep 10, 2009 at 3:37 PM
First, the choice is not between an increased Sales tax versus an increased Gas tax. By law, the taxes raised on fuel have to go into a trust fund for the construction and maintenance of roads and bridges. Gas tax revenues cannot be used to alieviate the shortfall in other State revenues. Second, ask your parents if they can simply go to their employer and demand a raise because their spending exceeds their income. It doesn’t work that way and our legislature needs to limit spending to the tax revenue received . The worst time to increase tax rates is during a recession. The State needs to control spending and eliminate waste to reduce the shortfall in its budget, not raise taxes or add new taxes to a fragile economy. Finally, one of the changes they brag about is Pension reform. They ended the 23 and out rule that allowed full retirement benefits after as little as 23 years of employment but that change only applies to new employees. It will take 23 more years before that change benefits the taxpayers of Massachusetts.