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Recently, Massachusetts Governor Maura Healey proposed legislation to temporarily waive state taxes on diesel fuel and gasoline. According to the Governor's press release, this “gas tax holiday” would cost the Commonwealth $120 million over a two-month period. We understand the temptation to offer constituents some bill relief – especially with an election just a month away. But Green Energy Consumers is not running for office and, for what it’s worth, we have these comments:
It's a revenue loss we cannot afford.
To repeat, it’s $120 million at stake out of the state’s budget. Less money for roads, bridges, and public transit. The Healey administration says it will make up for this lost tax revenue with revenue from the Fair Share amendment, passed by referendum in 2022, but Fair Share funding is supposed to be additional funding and, no matter how you slice it, $120 million less is $120 million less.
Fairness
Heating oil prices have skyrocketed as much and in the same time frame as diesel and gasoline. The gas tax holiday would do nothing for heating oil consumers. If the state deems $120 million to be an affordable thing, we would rather see it allocated to boosting fuel assistance to low-income families heating with oil and helping some of those folks make the switch to heat pumps.
The relief provided by the holiday would also skew towards those who drive the most inefficient vehicles, who are not necessarily those who need the most relief from higher fuel prices. Some of these drivers may be low-income drivers driving older vehicles, yes, but many of them will be people driving larger SUVs and trucks – vehicles that, in addition to being less efficient, tend to be more expensive to purchase as well. A Cadillac Escalade with a V8 engine gets 13 mpg, about 25% that of a Toyota Prius. To be blunt, if you can afford a gas guzzler and you choose a gas guzzler, you should not get a bigger tax cut than everyone else. Especially if your neighbor, who takes public transit and/or is paying through the roof for heating oil, gets no relief at all.
The holiday ignores the cause of the problem.
Can we all agree that the rise in the cost at the pump is not because Massachusetts raised the gas tax? It’s because of two wars wreaking havoc on oil production and refining. Ideas like the gas tax holiday take pressure off Washington that Washington does not deserve.
The holiday would also help you forget how oil companies are reaping windfall profits. But Exxon and Chevron will not forget. They’ll keep pocketing the cash.
In fact, waiving the $0.24/gallon gas tax does not necessarily mean drivers will pay $0.24/gallon less. Why? Because fuel sellers know we were all paying higher prices before, and might adjust their prices back up. Economists can debate exactly how much prices would actually decrease, but in the meantime, again, Exxon and Chevron continue to make windfall profits.
The message a gas tax holiday sends is this: If fossil fuel prices bother you, your government will make fossil fuel prices cheaper, even though that will help perpetuate the problem of fossil fuel dependency – price volatility, high prices, and dangerous pollution.
Massachusetts has plenty of other ways to make energy more affordable.
Remember that the Massachusetts House and Senate have each passed an energy bill, each one with over 100 sections. The two chambers are now negotiating in a conference committee. Between the two of them, they have written up dozens of ways to save consumers money without increasing our dependency on fossil fuels and blasting a $120 million into the state budget. In August, Governor Healey wrote a strong, constructive letter to the legislature about how to reconcile their differences. We blogged approvingly of her letter and now hope she gets back to those issues.
You still have a role to play.
Help your legislator focus.
Please call or email your state Representative and Senator (you can find them here).
You could say something like:
“Hello, my name is [NAME], and I live in [TOWN]. I urge you to ask the Energy Conference Committee to reduce gas utility overspending, regulate third-party electric suppliers, and promote clean energy. Most of all, I am also asking you to express strong opposition to cutting Mass Save’s budget and raiding the Alternative Compliance Payment fund. Thank you.”
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