Gas taxes are a “regressive” approach to generating revenue that “tend to hit those with low and moderate incomes the hardest,” according to the report issued by the liberal-leaning Massachusetts Budget and Policy Center. The effect is particularly acute in rural areas, where people must drive longer distances for everything from work to grocery shopping, and there are often not viable public transportation alternatives.
While many sustainable transportation advocates champion higher gasoline taxes as a way to pay for transportation improvements, a new report from the Massachusetts Budget and Policy Center (MassBudget) warns that higher gasoline taxes will exacerbate the state’s growing income inequality — unless the state simultaneously passes other tax policies to benefit low-income families.
A 10-cent tax increase would cost, on average, 0.20 percent of income for the lowest-income households, and less than 0.001 percent of earnings for households from the highest 1 percent of incomes, according to MassBudget.
“There are real tradeoffs with the gas tax and it’s something that there needs to be a real adult conversation about,” said the report’s author, Phineas Baxandall of the Massachusetts Budget and Policy Center. “If we’re looking to regressive forms of taxes (to fund transportation improvements), then we need to couple that with other kinds of more progressive tax policies, instead of making Massachusetts less equitable.”
Many environmentalists like the idea of a gasoline tax because a higher price on fossil fuels can, over time, influence consumers to drive less.
But MassBudget’s report warns that “consumers can be less responsive to prices of gasoline than for many other goods because there are often few viable alternatives to car travel.”
At a packed hearing on the bill Tuesday, critics of the legislation blasted it as a form of racial profiling and accused its backers of playing into the hands of white supremacists. Other speakers, including the heads of several organizations serving minority populations, said the data sought by the bill would help them better understand and serve the needs of individual ethnic groups.
“Making good policy is about knowing the community and figuring out what their needs are,” said Colin Jones, who works the for Massachusetts Budget and Policy Center. “Broad categories may be missing key stories.”
Kurt Wise, senior policy analyst at the Massachusetts Budget and Policy Center, questioned the use of one-time surplus tax revenues to drive permanent tax policy changes and suggested adjustments to the earned income tax credit would be a more targeted way to help lower income taxpayers.
The business tax break, Wise said, would only add to about $140 billion in tax cuts for corporations included in the federal tax law rewrite favored by President Trump and Republicans in Congress.
While a $37 million break in a $42 billion state budget is “not an absolutely huge giveaway,” Wise said policymakers should be looking at the state and local tax structure for ways to ensure people in different income groups are paying the same effective tax rates. “This moves us in the opposite direction,” he said.
“In Massachusetts, living in high-poverty neighborhoods affects six percent of all children, and these neighborhoods are mostly in the Gateway Cities and the City of Boston. Growing up in high-poverty neighborhoods has long-term impacts on our kids. All children and families deserve quality education, housing and access to opportunity. Investing in solutions that uplift children in poverty will create the change needed for everyone in the commonwealth to thrive,” Marie-Frances Rivera, president of the Massachusetts Budget and Policy Center, on a report that 90,000 kids in Massachusetts live in concentrated poverty.
Rath: In terms of addressing this, you said money does matter, and in its report, the Massachusetts Budget and Policy Center calls for changes to taxes, education funding, public transit, all sorts of things. What do you think would have the biggest impact in fixing these problems we’re talking about?
Zaff: There are a few things to keep in mind. So one, I think, is very important. Through all of this, often what gets conflated is this idea of risk and deficit in the individuals themselves. And I think what’s important to realize — and we’ve seen this time and again in our own work — is that the young people living in these communities concentrated in poverty have just as much potential in capacity as those in much more economically advantaged communities. And so that’s a reason for hope. Every young person has potential to thrive. We know this from science. And so what we also know is that the capacities of those young people need to be matched with appropriate supports. And so you know, a term now being used a lot is instead of achievement gaps, is really an opportunity gap.
And so how do we close the gap in opportunities so young people have these opportunities to reach their own potential. As Mass. Budget has suggested, one way is through education, and we know that education can be a key driver of economic mobility.
Baker filed a funding bill in January that would have increased state aid to districts by $460 million, according to an estimate by the Massachusetts Budget and Policy Center. The nearly $1 billion gap between his bill and the measure passed by the Senate underscores the tensions that are emerging between the administration the Legislature over the sweeping legislation.
About 90,000 children in Massachusetts are growing up in neighborhoods where 30 percent of more of the population is living in poverty, according to local researchers who drew their conclusions from recently released U.S. Census Bureau data. The Massachusetts Budget and Policy Center said Tuesday that the neighborhoods featuring “concentrated poverty” are mostly in “gateway cities” and in Boston.Center officials describe growing up in a high-poverty area as “one of the greatest risks to child development” and said the latest data shows more than 8.5 million U.S. children live in such settings.
To address the situation, MassBudget called for tax system changes, equitable education funding, investments in public transportation, and ensuring equitable opportunities for people regardless of their immigration status.
“Growing up in high-poverty neighborhoods has long-term impacts on our kids,” MassBudget President Marie-Frances Rivera said in a statement. “All children and families deserve quality education, housing and access to opportunity. Investing in solutions that uplift children in poverty will create the change needed for everyone in the Commonwealth to thrive.”
“Growing up in high-poverty neighborhoods has long-term impacts on our kids,” said Marie-Frances Rivera, president of the Massachusetts Budget and Policy Center, a nonpartisan research group in Boston, in a statement.
“All children and families deserve quality education, housing and access to opportunity. Investing in solutions that uplift children in poverty will create the change needed for everyone in the Commonwealth to thrive,” Rivera said.
The data snapshot was released by KIDS COUNT, a project of the foundation intended to track the status of children in the United States and provide data on children’s well-being to enrich policy discussions. MassBudget is the foundation’s KIDS COUNT partner for Massachusetts.
Colin Jones of the liberal-leaning Massachusetts Budget and Policy Center applauded the bill, calling it “a very significant move forward,” but added that the idea that there will be no need for new revenue over seven years to pay for it is “a lot to assume.”
While Worcester, for example, would have been required to increase its local education spending by $3 million under the Promise Act, it would have received $74 million in addition state aid, according to the Mass. Budget and Policy Center.
While details of how the bill now before the Legislature would affect individual districts have not been released, it would also mean an enormous increase in state aid to Gateway Cities in exchange for a small hike in local spending.
“They’ll make that trade easily,” said Jones, the Mass. Budget and Policy Center analyst. “They’re lining up for that.”