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House Transportation Bill Draws Mixed Reviews from Business Groups

Feb 26, 2020Boston Business Journal, Council in the News

February 26, 2020
By Greg Ryan – Law and Money Reporter

From the outset of the legislative debate about how to fix Greater Boston’s transportation crisis, House Speaker Robert DeLeo has sought buy-in from the business community on a tax hike. He asked business leaders at a Greater Boston Chamber of Commerce breakfast in March for their input on ways to address the problem, and in the year since, he and his top lieutenants have heard from essentially every major business group in the commonwealth on the topic.

Now that a proposal has finally emerged from the House, DeLeo can take heart that few major business-backed groups came out of the gate bashing the proposal. That in itself is notable, given that the bill seeks to impose as much as $612 million a year in new taxes and fees.

Views on each of the specific tax proposals have been mixed so far. Some groups support the five-cent gas-tax increase, others are opposed. The same is generally true of the bump to Uber and Lyft fees, though that proposal appears to have broader support.

A few, like the Kendall Square Association, wish the House had gone bigger on the gas tax. “We recommended something more dramatic,” that organization’s president, C.A. Webb, said of the gas tax. “This is a step. It’s a small step.”

A coalition led by the Greater Boston Chamber had said in October that a majority of its members — but not a strong majority — supported a gas tax increase from anywhere from 5 cents per gallon to 25 cents per gallon. House leaders ultimately landed at the lowest end of that spectrum.

Groups like the Associated Industries of Massachusetts prefer the Transportation and Climate Initiative, or TCI, to a gas-tax hike. TCI is a multi-state pact that would put fuel wholesalers under a cap-and-trade system, with expectations being that those companies would then pass on some of the extra expense to consumers at the pump. However, TCI’s future looks dicey at the moment given a lack of support among some neighboring states.

Those groups that favor TCI can take solace that lawmakers inserted a provision that the gas-tax increase would be offset in the event TCI is implemented, though exactly how that would happen is not clear.

The proposal that’s drawn the most skepticism in business circles is the reform to the state’s corporate tax minimum. The Chamber and A Better City, two of the most vocal backers of an increase to transportation funding, both said Wednesday they opposed such a change, or at least believed lawmakers should reconsider the measure. In a statement, the Chamber called the revamped corporate tax minimum “problematic.”

“This is a troubling signal to business in a time when cities and states around the country are competing for jobs and economic growth,” the organization said.

But groups like the Kendall Square Association and Massachusetts Taxpayers Association said they needed to study the issue further. The corporate tax minimum changes had been supported by progressive groups like Raise Up Massachusetts, which applauded the House bill in a statement, calling it “fair and balanced.”

Nearly every group that put out a statement thanked the Legislature for taking the problem so seriously and for putting forward a concrete proposal they can now debate.

In a letter to House Ways and Means Chairman Aaron Michlewitz, Massachusetts High Technology Council Vice President Mark Gallagher took a more detailed and negative stance than most have so far, arguing that the tax increases will hurt the state’s business climate.

The legislation “represents an unnecessary and ill-advised departure from the policy path that has helped make the Massachusetts economy the envy of the nation,” Gallagher wrote.

Retailers Association of Massachusetts President Jon Hurst summed up the view of several organizations when he said his initial reaction was relief that the tax increases weren’t more significant. There had been rumors that the House might impose a per-employee fee on Massachusetts businesses to fund transit improvements.

“I’m not ready to endorse the package, but out of the gate, it’s not giving me a whole lot of heartburn,” he said.

Increasingly, the Massachusetts High Technology Council is stepping up to create, execute, and lead critical statewide competitiveness strategies. Fostering a vision for our innovation economy under the MassVision2050 banner, the Council solidifies its position as a thought leader providing valuable insights to navigate emerging technologies, facilitates long-term planning, and reinforces the Council's commitment to excellence and action in the evolving Massachusetts tech-driven economy.

To learn more, contact Council President Chris Anderson.