Statement of Transportation for Massachusetts Director Kristina Egan on Speaker DeLeo and Senate President Murray’s announcement that they will seek repeal of the software tax
We are deeply concerned about the plan to repeal the sales tax on software services without a permanent replacement. This tax was a significant part of the recently-passed transportation package and unless a replacement source of revenue is found, its repeal will leave a large funding shortfall that will hurt transportation and the economy. Before seeking repeal, we urge the legislature to put a permanent replacement in place.
As an important first step, the Senate President and the Speaker have committed to replacing the revenue lost this year. However, a short-term fix is not the solution. We need a permanent revenue stream in place. Without committed revenue, we cannot build for the future. Transportation is critical to the economy, including the innovation economy. We may not, for example, be able to make a down payment on new Red Line cars, ensuring that more people can get to Kendall Square, an innovation hub. We may not be able to improve transit to the Innovation District, which has already become congested. We may not be able to invest in highway safety and maintenance upgrades along the 495 tech corridor.
Together with Legislative leadership, we worked hard to pass a meaningful transportation bill that will allow us to invest in Massachusetts, to strengthen our economy, spur business development and encourage job growth. We can’t afford to lose a single dollar of this critical investment. If our transportation system is allowed to fall further into debt and disrepair, we will lose the competitive edge we are working so hard to maintain and grow. And although the new law dedicates the software tax to the general fund, a shortfall in the general fund could put transportation funding, along with many other funding priorities, at risk.
The right solution would be to find a permanent, long-term replacement for the software tax, ensuring that we have enough money to fund our critical transportation needs and move Massachusetts forward.