House Budget Writers Drop Healey's Gas Tax Holiday From $2.35 Billion Spending Bill

Massachusetts House budget writers on Tuesday removed Gov. Maura Healey's proposal to suspend the state gas tax from a $2.35 billion spending bill, ending the plan's chances in the House two weeks before Election Day.

The House Ways and Means Committee advanced the bill by a 24-0 vote, with the committee's Republicans choosing not to take a position for or against it, according to State House News Service. The committee said its version would carry a net state cost of about $1.5 billion. The legislation is a so-called closeout supplemental budget, intended to settle the state's books for the fiscal year that ended June 30. A vote of the full House was expected Wednesday afternoon.

Healey had proposed temporarily waiving collection of the state's 24-cent-per-gallon levy on gasoline and diesel for two months, as the war in Iran has kept prices at the pump elevated for months. The suspension was estimated to save drivers a collective $120 million. The governor said the cost would be covered by surplus revenue from the state's tax on high earners, often called the millionaire's tax.

The committee's redraft, filed as H 5699, does not include that proposal.

Committee Chairman Aaron Michlewitz, a North End Democrat, said Tuesday that he doubted drivers would see the savings. "Even if the gas tax holiday was to take effect, I don't see the mechanics of preventing wholesalers or distributors from raising the rate to offset that 24 cents," he said, according to State House News Service. He called the idea "what I would call a gimmick, short-term kind of conversation ... that may not have any real savings at the end of the day," and added that "the numbers just don't add up for this proposal to be something that we feel we should be supporting."

Michlewitz noted that the House has rejected similar proposals in the past and raised concerns that forgoing gas tax revenue could reduce money for transportation infrastructure and the MBTA. He said he checked the price Tuesday morning at the only gas station in his downtown Boston district, a Mobil station on East Berkeley Street near Interstate 93, and found it at $5.47 a gallon. The statewide average was about $4.28, according to AAA figures cited by State House News Service.

The chairman placed responsibility for high fuel prices on the federal government. "I think the real relief will come when the president of the United States ends this meaningless war that we're having with Iran, that is really the real culprit here in rising fuel prices," Michlewitz said.

When she unveiled the plan in September, Healey said it had been written to guarantee that drivers would see the price reduction and that it would not harm state finances or transportation funding. "This will not cause us any fiscal harm and it also will not jeopardize any funding that is going towards transportation or important infrastructure projects," she said at the time.

On Tuesday night, the governor told WBZ-TV she would not drop the idea. "I am disappointed and I am going to keep fighting for it," Healey said. "Because this is about providing relief to people. Donald Trump got us in this war, it's raising the price of everything, including the price at the pump. People can't afford it."

Republican gubernatorial nominee Mike Minogue, who has his own proposal to eliminate the gas tax, criticized both the governor and the Legislature. "As predicted, this was a political stunt, pure and simple. It's a sad game to play with hard-working Massachusetts families who are looking for meaningful relief," Minogue said in a statement. He has said he would suspend the tax whenever prices reach $4 a gallon or more, but did not say how he would overcome an unwilling Legislature, State House News Service reported. Speaking to WBZ-TV, Minogue said the governor should "push back on the legislature" and said he would pay for eliminating the tax by rooting out "waste, fraud and abuse" in state government.

The Massachusetts Fiscal Alliance also objected. "This was never going to solve Massachusetts' affordability problem. It was two months and 24 cents a gallon. But when given the choice between providing even a little relief to taxpayers or keeping the money in government, House leaders chose government," Executive Director Paul Craney said.

As of about 3:40 p.m. Tuesday, representatives had filed 128 amendments to the committee's bill. None appeared to seek to restore a gas tax holiday, according to State House News Service.

Much of the spending in the House bill tracks the governor's original filing. It includes $1.8 billion gross, or $1.03 billion net, for MassHealth; $79 million for unemployment insurance interest repayments; $2.25 million for maternal health needs; nearly $6 million for the Cannabis Control Commission to carry out this year's industry and regulator reform law; $18.5 million for an early education rate reserve; a $10 million transfer to the Massachusetts Life Sciences Center; and a $30 million reserve for collective bargaining costs.

Beyond the gas tax, the committee set aside several other Healey policy proposals, including a crackdown on ticket resellers and a new Health Care Stabilization Fund. Under the governor's version, the fiscal 2026 surplus and a share of excess capital gains revenue would have gone into a reserve the state could draw on if federal cuts strain MassHealth, the Massachusetts Health Connector or the Health Safety Net Fund. Michlewitz said the idea has merit but requires "a much more deeper dialog" than a closeout budget allows. The House version instead directs that money into the Transitional Escrow Fund and extends the fund's expiration from 2027 to 2028.

The bill also leaves out roughly $245 million Healey sought to cover county sheriffs' deficiencies from fiscal 2025 and 2026. Michlewitz said the House is still waiting for information it requested from the sheriffs.

House leaders added policy language of their own. The bill would ban distributing deceptive media about candidates or election operations "with actual malice" within 90 days of an election, and would require paid political audio or video ads containing synthetic media to state "contains content generated by AI" at the beginning and end. It would also bar state constitutional officers from using public funds to appear in advertisements using their name, voice or likeness to build recognition, according to a committee summary.

"This supplemental budget addresses important time-sensitive deficiencies, provides support for maternal mental health services, limits the use of AI in political advertising, and provides funding for vital programs," Michlewitz and House Speaker Ronald Mariano said in a joint statement.

The Senate must act on its own version and is not planning a formal session this week. The state comptroller cannot file a required annual report on state finances, due at the end of October, until lawmakers and the governor formally close the books on the last fiscal year.