By Eric Moskowitz | The Boston Globe | January 4, 2013
Governor Deval Patrick said Friday that he will unveil a proposal later this month to raise the necessary money through taxes or fees to fix the state’s financially beleaguered transportation network.
Patrick declined to say how he would raise the money or how much he would seek. Past reports have identified an annual gap of roughly $1 billion between what the system needs and what the state raises and spends.
But his comments add to a growing sense of inevitability on Beacon Hill that residents will be asked to pay more to repair the state’s crumbling infrastructure and confront years of red ink.
Legislative leaders who previously embraced a policy of “reform before revenue” appear to be shifting from asking whether more money is needed to asking how to raise that money and where to spend it.
Speaking to reporters Thursday and again Friday, Patrick did not use the word “taxes” when he spoke of financing options but was steadfast about the need for revenue. He framed the issue around invigorating the economy and enhancing mobility statewide, not taxing and spending.
“I’ve not started with where the revenue ought to come from,” Patrick said, explaining that the transportation financing plan that the Legislature called for by Jan. 7 would be delayed a week. “I’ve started from the perspective of what is the transportation system that we need to be a 21st century economy and how does that touch every corner of the Commonwealth.”
Lawmakers called for the plan last June while approving emergency funding to help the MBTA balance its budget this fiscal year and avoid massive service cuts and even larger fare increases than the ones that took effect last summer.
That plan will detail how much money is needed to end structural deficits plaguing highway and transit operations. For years, annual expenses — for asphalt and diesel fuel, employee health insurance, and electricity — have risen faster than the state’s five sources for funding transportation: the gas tax, transit fares, highway tolls, Registry of Motor Vehicles fees, and a share of the sales tax.
The plan is also expected to spell out how much it would cost to address a vast maintenance backlog and fund strategic expansion projects. Those costs will be coupled with what Patrick called a “menu of ideas” for raising money, whether through existing sources or new taxes or fees. His recommendations will follow in his statewide budget proposal.
But after being briefed on the report, Patrick asked the team to put in another week to spell out more fully how it would benefit residents and businesses from the Berkshires to the Cape, whether they rely on roads or rails, waterways or airports.
“The reason I sent them back is not because we were quarreling over what the sources [of money] ought to be,” Patrick added, “but rather to make sure we are focusing on the economic growth opportunities in every corner of the Commonwealth.”
Senate President Therese Murray and House Speaker Robert A. DeLeo placed transportation near the top of their agendas, addressing lawmakers at the start of the new session this week.
Neither said taxes, and each emphasized vigilance in pursuing cost-saving measures. But DeLeo acknowledged the need “to make investments” to ensure that transportation statewide “will be safe and will be state-of-the-art.”
Murray addressed “a daunting long-term need to update our infrastructure systems,” and in noting reforms imposed over the past four years, sent a signal many interpreted as acknowledging the need for revenues, as well.
“The positive news is that the governor, Senate president, and House speaker have all stated publicly that transportation funding is a priority,” said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation and a member of a bipartisan commission that issued a pair of influential reports on the transportation-funding crisis in 2007. “[But] there is likely to be a very contentious debate about how much new revenue to raise, by what means, and how.”
Part of the debate will be over whether the money should come from transportation sources, like gas taxes or tolls, and be locked in for transportation spending, or whether transportation should be supported from general funds and a broader source like the income tax.
“I think there’s greater public acceptance when you look at revenue measures that are related to users of the transportation system,” such as tolls, fares, and fees for driving and riding transit, said Representative William M. Straus, who was House chairman of the Joint Transportation Committee last session and is expected to be renamed.
Straus, who supports substantial investment, providing it reaches statewide, said the alternative is to “freeze our transportation system in time and declare ourselves something like a modern Old Sturbridge Village.”
But the debate this year will be challenging, given general reluctance to raise taxes, as well as disagreements over how to raise and spend them.
“I wouldn’t take anything as a foregone conclusion,” the Mattapoisett Democrat said.
Some advocates are calling instead for raising the income tax rate back to 5.95 percent, spreading the money not just to transportation but to education and other priorities.
“We’re interested in an overall solution that would actually make the system more fair,” said Andi Mullin, director of a coalition of labor unions and others known as the Campaign for Our Communities, calling the gas tax regressive because it has a greater impact on lower-income drivers.
If a billion-dollar annual transportation shortfall seems staggering to the public, it surprises none of the analysts who have studied the issue for years.
Though MBTA riders are accustomed to waiting for 40-year-old subway cars and though night and weekend bus service is rare in most regions beyond Greater Boston, drivers have been shielded from the crisis.
Heavy borrowing has helped the state address the worst highway and bridge problems, though without realistic payment plans. Even basic maintenance and payroll has been substantially funded with borrowing since the 1990s.
“We basically charged everything to a credit card, with no idea how we were going to pay anything more than the minimum,” said Stephanie Pollack, associate director of Northeastern University’s Dukakis Center for Urban and Regional Policy and an adviser on Patrick’s transition team after his first election.
The causes include resistance to raising tolls and gas taxes, disappointing sales tax receipts through multiple recessions and a shift toward online shopping, and the sleight-of-hand employed to finance the Big Dig after the federal government capped reimbursement of the escalating costs.
In 2007, the Transportation Finance Commission identified a $15 billion to $19 billion gap over 20 years between projected transportation revenues and the cost of operating and repairing the system, which Patrick’s plan will revisit. The commission proposed 22 changes to save $2.5 billion; the rest, it said, required taxes or fees.
But when Patrick sought to raise the gas tax, lawmakers called for reform first. In 2009 they merged the Turnpike Authority, MassHighway, and other agencies into one Department of Transportation, saving on shared expenses such as plowing and by refinancing bad debt.
They moved MassDOT employees into the state’s lower-cost Group Insurance Commission, and for new MBTA workers ended the policy allowing them to retire with a full pension after just 23 years. And the Patrick administration pushed for civilian flaggers instead of costlier police details.
That complemented ongoing work to streamline the T, once lampooned for bloat but now competitive with peers when measuring operating expense per passenger and mile. It provides more service with fewer employees and generates more from advertising and other internal sources than a decade ago.
“We can continue to reduce costs, but we can’t do what the public has asked of us, rightfully so, with reform alone,” Secretary of Transportation Richard A. Davey said.
The 2007 commission reports were full of dire and urgent warnings. The need for revenue remains the same, even if it is a tall legislative order, said Stephen J. Silveira, the Republican lobbyist who chaired the commission.
Raising taxes to provide necessary services never won anyone an award, he said. “This is just about people doing the right thing.”