Local Gas Tax On Table As Source Of Revenue

By: Christopher Kazarian
Published: 12/11/12

Motorists already pay federal and state taxes on gas they purchase at the pump. Could they one day expect to pay a local tax as well?

It was a proposal brought forward by Paul (Zeb) Rich, a member of the Falmouth Capital Advisory Committee, at their meeting last Thursday evening at town hall as a possible way to fund the town’s capital projects on an annual basis. “I thought about it while I was in the steam room in the [Falmouth] Sports Center,” he laughed. “I don’t know why I thought about it; I guess it shows what type of life I live.”

“Maybe it’s the thought of money going up in steam,” committee chairman Brent V.W. Putnam quipped.

Regardless of how he thought of the idea, the committee agreed it was one worth exploring. Mr. Rich’s concept was to add a 1 cent local tax to each gallon of gas purchased in Falmouth with that revenue being allocated to the town’s capital expenses on an annual basis.

The biggest question was whether adding a local tax to gasoline can even be legally done.

“I am pretty sure the state and federal governments preempt it, but it is certainly worth exploring,” Town Manager Julian M. Suso said.

“We could petition the state and ask them, ‘Can we put a penny tax on gas to help pay for road repairs?’ ” Mr. Putnam said. “It is not a bad idea. It is thinking outside the box.”

Mr. Rich noted that the federal tax on gas is used to pay for highway and bridge repair. Using that same approach, he said, the local tax could be focused on similar infrastructure improvements.

And he said the tax would not be one that everyone in Falmouth pays for as it would be spread only among those who purchase gas here.

Mr. Putnam agreed, pointing out that it would be similar to the .75 percent increase in the meals tax passed at Town Meeting in November 2010 as that was broad-based with a number of people contributing to it.

Mr. Rich’s idea was one of several each committee member was asked to come up with at their first meeting two weeks ago as a way to fund its ongoing capital needs annually. The committee had little discussion on those ideas as it wanted to compile them into a list and categorize them depending on whether they were revenue-generating concepts or cost-cutting proposals.

And it wanted to give members a chance to pore through all the recommendations before having an in-depth conversation on them.

As to how much Falmouth will have to both cut in expenses and raise in revenue is still up for debate. Assistant Town Manager Heather B. Harper was in favor of the $3 million figure the previous iteration of the committee identified as the town’s annual capital needs when it went through a similar process last year. “That $3 million is probably the right number,” she said. “Some years it may be $2 million and other years it might be $4 million.”

That money would pay for a number of projects ranging in cost from $25,000 to $1 million, which have a life expectancy of at least five years.

Ms. Harper stressed that it was imperative that the town find a way to fund that $3 million figure annually, as it would give department heads the assurance of knowing what type of financial commitment they can expect from year to year. And she said it would allow them to more realistically provide a budget for the list of projects on their capital plan.

She said the committee should look at the $1.3 million Town Meeting expended on capital projects last month as a realistic amount of money Falmouth could sustain in future years. That would mean it would need to find how best to find another $1.7 million to meet the town’s capital needs. “I’m trying to whittle it down to a number that is manageable,” she said.

Mr. Putnam was against identifying a specific target, but instead wanted to see how much money the committee could find through budget reductions and finding new or additional sources of revenue. “We have to defend this number and go to Town Meeting and the voters and say this is what we have for expenses and this is what we’ve come up with for revenues,” he said. “How we come up with the number I’m guessing we back into it in a number of different ways.”