Impacts of lower gas prices to the state’s budget

BOSTON (WWLP) – Gas prices are falling just in time for the holiday season, here in Massachusetts and across the country.

“They’re very low. They’re even lower across the country. I was in Texas and it was close to two dollars,” said State Representative Frank Smizik (D-Brookline).

The average price for gas in Massachusetts this week is $2.80 per gallon, sixty cents less than what you were paying one year ago. But the lower gas prices have budget officials worried about tax revenues in some states. Luckily, it is not an issue here in Massachusetts. The state’s gas tax is set at 24 cents per gallon no matter if prices go up or down.

That money goes toward repairing the state’s crumbling roads and bridges. Adjusting the gas tax just became more difficult. Massachusetts voters last month decided to eliminate the law that linked the gas tax to inflation. So the tax cannot be automatically increased.

“Right now, we have the gasoline tax set. Anytime it’s going to go up or down it has to be debated by the legislature,” said State Senator Don Humason (R-Westfield).

The timing could not be better. Cheaper prices at the pump can free up money that could spent during the holiday shopping season, generating sales tax revenues for the state. Analysts believe gas prices should stay at the same or go even lower next year.

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