Governor Healey announced Monday that she is filing legislation to suspend the Massachusetts gas tax for two months, which she said would cut the price of gasoline by 24 cents a gallon. “We’re in a crisis,” she said.
A gas tax holiday sounds like the simplest thing a state can do. It is not, and the reason is written into the Massachusetts Constitution. Fuel tax revenue is not ordinary revenue. It is constitutionally fenced off for roads and transit, which is why the interesting part of this proposal is not the suspension at all. It is the $120 million she proposes to backfill it with.
What she proposed
Healey said the legislation would take effect one week after the Legislature approves it and she signs it. She said it would not affect any existing transportation projects, and that the roughly $120 million cost would come from surplus Fair Share tax revenue.
She tied the increase to the war in Iran, saying gasoline in Massachusetts was around $2.90 a gallon before it and is now above $4.40, with diesel up from about $4.20 to $6.20.
Doug Howgate, president of the Massachusetts Taxpayers Foundation, said he assumed the administration had checked the numbers and found two months of relief manageable. Republican challenger Mike Minogue, who proposed a gas tax holiday earlier this month, said he approved of the move but argued the two-month limit pushes everything past the election.
The constitutional fence around fuel taxes
Most state revenue goes into the General Fund and the Legislature decides what to do with it. Fuel tax revenue does not work that way in Massachusetts.
Article 78 of the Articles of Amendment, as it now stands after being replaced by Article 104, provides that “no revenue from fees, duties, excises or license taxes relating to registration, operation or use of vehicle on public highways, or to fuels used for propelling such vehicles, shall be expended for other than” the administration of those laws, refunds, “payment of highway obligations,” the “construction, reconstruction, maintenance and repair of public highways and bridges, and mass transportation lines,” enforcement of traffic laws, “and for other mass transportation purposes.”
The 1974 amendment in Article 104 is what added mass transportation to a provision that had previously been highways only. That is why gas tax money can support the MBTA.
Here is the key point, and it cuts in the administration’s favor. Article 78 restricts how fuel revenue may be spent. It does not require the Commonwealth to collect it. A suspension does not violate the amendment, because there is no revenue to misdirect. The constitutional problem people expect is not there.
The real problem is the hole, not the constitution
The practical difficulty is that the money is already committed.
Fuel excise revenue flows to the Commonwealth Transportation Fund, which supports MassDOT and the MBTA and, critically, services transportation bonds. “Payment of highway obligations” is in the constitutional text for a reason. When a state pledges a revenue stream to bondholders, removing that stream for two months is not merely a budget question. It is a question about what the Commonwealth told its creditors.
That is why Healey’s statement that the suspension “wouldn’t impact any existing transportation projects” is doing real work, and why there is a $120 million replacement attached. Without a backfill, a gas tax holiday is a transportation cut with a delay built in.
Can Fair Share money be used this way
This is the genuinely interesting legal question, and the answer is probably yes, with a wrinkle.
The Fair Share surtax was added to the Constitution by Article 121, which amended Article 44. It imposes “an additional tax of 4 percent on that portion of annual taxable income in excess of $1,000,000,” and it dedicates the proceeds: “To provide the resources for quality public education and affordable public colleges and universities, and for the repair and maintenance of roads, bridges and public transportation, all revenues received in accordance with this paragraph shall be expended, subject to appropriation, only for these purposes.”
Roads, bridges and public transportation are on that list. So moving surplus surtax revenue into the Transportation Fund to keep transportation whole is squarely within the dedication.
The wrinkle is in how it is characterized. Article 121 permits Fair Share money to be expended on roads, bridges and public transportation. It does not, on its face, authorize using Fair Share money to fund a tax cut. If the transfer is structured as an appropriation to the Commonwealth Transportation Fund for transportation purposes, the analysis is clean. If it is structured as offsetting a revenue loss, someone will argue the difference. The drafting of the bill will matter more than the press conference did.
There is also the phrase “subject to appropriation,” which appears in Article 121 exactly as it does in this year’s Question 6. Surtax money reaches a purpose only when the Legislature appropriates it, which brings us to the part Healey cannot control.
Why this is not the Governor’s decision
The gas tax is set by statute, in G.L. c. 64A. A governor cannot suspend a tax by executive order, which is why the announcement was that she is filing legislation rather than that she has acted.
The Legislature has to pass it, and the House and Senate have historically been cool toward fuel tax suspensions for the reason above: the money is pledged, and a holiday sets a precedent that the pledge is negotiable. A two-month suspension also arrives with an election on November 3, which both shortens the political runway and sharpens the incentive.
Does a gas tax cut reach drivers
The question every economist asks about a gas tax holiday is whether the savings get passed through to the pump or absorbed by distributors and retailers. There is nothing in Massachusetts law compelling pass-through of a suspended excise. States that have tried this have seen mixed results, and the pass-through tends to be better at the start of a holiday than at the end and worse on the way back up when the tax returns.
That is a policy judgment rather than a legal one, but it is the difference between a 24-cent cut announced and a 24-cent cut received.
What to watch
- The bill text. Specifically whether the Fair Share transfer is an appropriation for transportation purposes or a revenue offset.
- Bond counsel. Any suspension touching pledged revenue gets reviewed against the Commonwealth’s bond covenants before it moves.
- Whether the Legislature acts at all. It is filing season plus six weeks to an election. Neither chamber is obliged to take it up.
- The sunset. A two-month suspension ends in the middle of winter heating season, when the political cost of letting it expire is highest.
Can the Governor suspend the gas tax on her own?
No. The gas tax is statutory under G.L. c. 64A. Healey is filing legislation, which the Legislature must pass and she must sign. She said it would take effect one week after signing.
Does the Massachusetts Constitution prohibit a gas tax holiday?
No. Article 78, as replaced by Article 104, restricts how fuel tax revenue may be spent, limiting it to highway and mass transportation purposes. It does not require the Commonwealth to collect the tax.
How would it be paid for?
Healey said the roughly $120 million cost would come from surplus Fair Share surtax revenue, which Article 121 dedicates to education and to the repair and maintenance of roads, bridges and public transportation, subject to appropriation.
How much would drivers save?
Healey said 24 cents a gallon. Whether the full amount reaches the pump depends on pass-through by distributors and retailers, which no Massachusetts law requires.
Would it affect the MBTA?
Fuel tax revenue flows to the Commonwealth Transportation Fund, which supports MassDOT and the MBTA and services transportation debt. Healey said the suspension would not affect existing projects, which is what the backfill is for.
Healey’s proposal, the 24 cent figure, the $120 million cost, the Fair Share funding source, the one-week effective date, the fuel price figures and the comments from Doug Howgate and Mike Minogue from NBC10 Boston, September 22, 2026. Constitutional text read at malegislature.gov: Article 78 of the Articles of Amendment as replaced by Article 104, and Article 121 amending Article 44. G.L. c. 64A read at malegislature.gov. No bill text has been published as of this writing, and the analysis of how the Fair Share transfer would be structured is our reading of the constitutional provisions rather than a description of a filed bill. General information about Massachusetts law, not legal advice.