Taxes on gasoline and cigarettes are set to increase after state lawmakers voted to override Gov. Deval Patrick’s veto of a transportation financing bill.
The bill contains a 3 cent-per-gallon hike in the gas tax and would index future increases in the tax to inflation. It also raises the cigarette tax $1 per pack and imposes the state sales tax on computer software and services.
Patrick vetoed the bill after lawmakers rejected his demand to add a provision allowing for an additional gas tax hike if tolls on the western portion of the Massachusetts Turnpike come down as scheduled in 2017.
The House voted 123-33 to override Patrick’s veto. The Senate voted 35-5 to override.
The bill, which calls for $500 million in new taxes, seeks to pump billions of dollars into the state’s transportation network over the next decade, allowing the state to modernize its aging infrastructure and jumpstart stalled projects including the expansion of commuter rail to the South Coast.
Starting in 2015, the gas tax will be tied to the national Consumer Price Index, a prominent measure of inflation, and rise automatically. By 2017, the transportation law will raise an estimated $800 million per year.
“I didn’t vote for the underlying transportation finance bill when we voted on it, but I’m in favor of the Legislature overriding the governor’s veto because this Legislature worked very hard and in good faith to present a comprehensive transportation bill that matched the governor’s request of $800 million,” said state Sen. Kathleen O’Connor Ives, D-Newburyport.
O’Connor Ives said she opposed the bill because it included a study on adding tolls to Interstates 95 and 93 near the New Hampshire border.
Democrats in the state House said their proposal was more modest and would not overburden the taxpayers or the economic recovery.
“The governor’s transportation package in my opinion would have had a very negative impact on our economic growth here in the commonwealth,” said state Rep. Linda Dean Campbell, D-Methuen. “The package the Legislature put forward was modest and very appropriate in terms of directing money to road and bridge repair.”
Republicans have opposed any form of tax increase for transportation, arguing funding already exists to increase spending on both transportation and education.
State Senate Minority Leader Bruce Tarr, R-Gloucester, said in a statement the new transportation law “put us on an unsound path of increasing taxes by hundreds of millions of dollars without first capturing promised savings from reform (and) burdening motorists with fuel taxes that will increase without legislative approval into perpetuity.”
“Clearly our transportation systems need improvement, but the path chosen today subordinates savings, reform and economic growth to the types of taxing and spending solutions that have caused so many problems in the past,” he said.
Tarr was one of the five senators to vote against the override; 35 voted in favor.
State Rep. James Lyons, R-Andover, said revenue in the fiscal year that just ended came in at $600 million more than was projected last summer, though some of that surplus has been spent. He also argued that expenses in the MBTA need to be reviewed before more money is pumped into the agency.
“There is plenty of revenue within the state budget,” he said.
Lyons was one of 33 state representatives to vote against the override; 123 voted in favor.
The transportation proposal that became law yesterday included tax increases estimated at $500 million this fiscal year, which began July 1, by raising the gasoline tax, raising the cigarette tax and including certain software and computer services in the sales tax. Those new rates go into effect Wednesday.
Funding from the proposal is to be spent on state funding to cities and towns for road and bridge work, the Department of Transportation, the MBTA and the regional transit systems.
Supporters of the plan argued the increased funding is needed to clear the backlog of road, bridge and rail projects, improve the state’s transportation capital planning and to add funding to transportation agencies that run deficits and fund basic outlays, such as payroll, with borrowed money.
Patrick vetoed that bill because he said the new revenue is too low to meet the state’s transportation needs and the proposal did not address a potential end to tolls on the Massachusetts Turnpike west of Route 128. That veto, which put into question the new funding, led Patrick to strip millions of dollars of local aid from the budget.
The Legislature also overrode those cuts to local aid.
Since Patrick proposed $1.9 billion in new annual taxes in January, Democrats on Beacon Hill have balked, pushing back by crafting their own, smaller package of taxes. Republicans have steadfastly opposed any new revenue.
Patrick’s original proposal would have dedicated about $1 billion of the new revenue to transportation, with the remainder going to education.
State House News Service contributed to this report.
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