BOSTON—Massachusetts drivers are paying an extra 2.5 cents tax on every gallon of gasoline they buy to support an underground storage tank clean-up fund, but more than half of the $75 million it generates each year is being diverted by state lawmakers to other programs.
The practice has created a backlog of more than 1,700 claims from gas station owners and other fuel tank owners awaiting reimbursement for clean-up work they've already done. And it has prompted other owners to delay tapping the fund for its stated purpose: rectifying potential environmental hazards.
Barbara Anderson, co-founder of Citizens for Limited Taxation, said the diversion is another example of legislators using bait-and-switch tactics to misspend taxpayer money.
"The Legislature tricks everybody into supporting the tax and spends the money on what they want to spend it on," Anderson said. "They are laughing at us all as they do it."
The practice, which is legal, isn't used just with the underground tank tax, especially as the national recession has choked off receipts from income and sales taxes.
Legislators in Massachusetts and across the country have diverted large amounts of a $250 billion tobacco industry settlement from 1998 to programs unrelated to health. In Massachusetts, they also sweep all unclaimed 5-cent bottle deposits into the general fund instead of diverting some of the money to recycling programs in cities and towns.
James McCaffrey, director of the Massachusetts Sierra Club, said environmental funds are often an easy target when legislators need money for what they consider other more pressing priorities.
"As the budget gets more difficult to balance and more funds are eyed as available for raiding, we are going to increasingly run into this problem," he said.
Spokesmen for Senate President Therese Murray and House Speaker Robert DeLeo both refused to answer questions about the tax diversions, instead referring them to their budget-setting Ways and Means committees.
Kara Keefe, a spokeswoman for Senate budget chief Steve Pangiotakos, D-Lowell, said lawmakers plan to approve a supplemental budget in the next couple of weeks with $10.9 million for unpaid tank claims, a figure sought by Gov. Deval Patrick's administration.
A spokeswoman for Patrick's budget chief noted the diversion of storage tank taxes started under the Democrat's predecessor, former Republican Gov. Mitt Romney.
"Approved claims are an important obligation of the commonwealth, and we are working with the Legislature to facilitate payment as quickly as possible in light of the fiscal circumstances facing the state," said Cyndi Roy, spokeswoman for Administration and Finance Secretary Jay Gonzalez.
Storage tanks were targeted for replacement and inspections because fuel leaking from corroded vessels can foul drinking water, while fumes and vapors that travel below ground can trigger explosions and fire.
The reimbursement program began in 1992 with a 0.5 cents-per-gallon fee tacked onto state and federal gasoline taxes. They currently are 21 cents and 18.4 cents, respectively.
The tank money was deposited in a dedicated fund to help gas station owners defray the cost of fuel tank repairs or replacements.
In April 2003, the Romney administration quintupled the tax to 2.5 cents per gallon. But when the fee was raised, the dedicated fund was eliminated and the tax receipts were deposited into the state's general fund.
That allowed the governor and legislators to spend them however they wanted.
Stephen Dodge, who represents the Massachusetts Petroleum Council on the state's Underground Storage Tank Fund board, said the fee was raised to make up for a deficit in the storage tank fund. Once the backlog of claims was eliminated, he said, the fee was supposed to be reduced.
Now, just over two months into the state's 2011 fiscal year, $6.5 million from the fund already has been sent out for tank work. Lawmakers plan to obligate the remaining $6.5 million in January. Meanwhile, there will still be a $20 million backlog of approved reimbursement claims or claims waiting to be approved after the January payments.
"We have the worst of both worlds," Dodge said. "We have the worst backlog and no money to fix it."
Rep. George Peterson, R-Grafton, has unsuccessfully introduced budget amendments the last several years intended to ensure that all the money generated by the tank tax goes to underground storage removal. He also wants the storage tank board to have the sole authority to raise or reduce the fee.
"If the businesses do not get back money in a timely period, it puts an awful lot of stress on them," Peterson said.
Environmental advocates like McCaffrey say the program's backlog could have devastating consequences for communities across the state.
"A lot of the tanks have petro chemicals, gasoline and gas additives that can spread through water quickly and stick in water a long time, which could harm drinking water," said Becky Smith, Massachusetts water coordinator for Clean Water Action.
Dodge said increased funding may not be much help at this point.
"The hole is getting so big it may be a drop in the bucket," he said.