When the Massachusetts Legislature voted last year to raise the gas tax by 3 cents to 26.5 cents per gallon and allow the tax to rise automatically in future years by the rate of inflation, the idea was to find a way to ensure enough revenue to cover the state’s transportation maintenance and infrastructure costs into the future. The 23.5-cent tax, which didn’t change for 20 years, failed to keep pace with infrastructure needs as inflation ate away at its buying power and fuel-efficient cars and spikes in gas prices caused gas consumption—and thus revenue—to taper off.
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Now the Republican-led group Tank the Automatic Gas Tax Hikes is pushing a referendum to repeal the section of the law tying future increases in the gas tax to changes in the Consumer Price Index. The anti-tax group argues that the gas tax should not rise automatically—only when lawmakers vote to raise it. If there’s no pushback now, they say, lawmakers will tie income and property taxes to inflation. The group uses catchy phrases (say no to the “forever tax”) along with not-so-subtle digs at the Legislature’s abject fear of voting for taxes.
More than two-thirds of the states have fixed-rate gas taxes, including four that adopted variable tax rates tied to inflation or the price of gas and then subsequently scrapped that approach and reinstated a fixed-rate tax.
Massachusetts is one of 18 states and the District of Columbia that tax fuel at a variable rate. The states are among the most populated, so a majority of Americans now drive in states with a variable gas tax. Florida, Massachusetts, and Maryland tie the levy to the CPI, the others link to the price of gas directly or through a sales tax.
A 2011 study by the progressive Institute on Taxation and Economic Policy found that states with a fixed-rate tax went nearly 15 years on average without adjusting the rate, causing an average effective drop in the rate of 29 percent. States with variable rates had an average effective increase of 1 percent.

