CommonWealth – Walsh’s legislative skills needed on transportation

Options include congestion pricing, infrastructure bank

A NEW MAYOR provides an opportunity for new thinking about Boston-area transportation. And since state participation is a must when it comes to the transportation policies that would create the most benefits for city residents, the fact that Boston’s new mayor, Marty Walsh, happens to have 17 years of Beacon Hill experiences and relationships under his belt makes the possibilities even more exciting. 

Transportation is by definition a regional issue; its customers don’t stop at the city line. And there is much to be done to increase mobility in Boston and its environs. Witness the fast-growing Longwood Medical Area, which is home to more than 40,000 jobs and could accommodate more with the enhanced transportation access it so desperately needs. 

Options that were little more than pipe dreams just a few years ago are now very real thanks to technological advances. Many approaches that would improve transportation would also enhance the economy, environment, and the city’s livability. 

Minimize congestion, boost the economy 

Traffic congestion hurts Boston’s economy and encourages businesses to locate elsewhere. There are few, if any, options to improve the capacity of the city’s roadway network and even less money to make it happen. One solution is to use technology to implement pricing on major roadways during peak periods. Any private firm would do the same when faced with more demand than they could safely and easily handle. 

Travelers could receive money-back guarantees if travel times do not meet a certain target. In addition to representing real accountability, the approach generates significant value for both the consumer and the city. Travel in and around the city would be reliable – a transportation system with “no surprises” is also one that supports business and its workers. 

This proposal, known as congestion pricing, would undoubtedly be very controversial. But the benefits to cities where it’s been implemented, such as London and Stockholm, demonstrate that it’s worth the fight for elected officials. 

In addition to providing accountability, such a system also creates a clear performance measure for the city Department of Transportation and provides an opportunity to showcase Boston as a city that delivers. The technology needed to support pricing can also be used for everything from parking at commuter rail stations to buying a latte at Logan Airport. 

State Infrastructure Bank 

An infrastructure bank – a fund that offers loans and other financial assistance to public entities or public-private partnerships that sponsor highway, transit, intermodal, or transportation technology projects – would help finance the transportation system Boston and its environs need. The bank would operate like a regular commercial lender in that it relies on an initial infusion of equity. 

An infrastructure bank can increase transportation infrastructure investment by stretching federal and state dollars. Boston is not large enough to make a bank effective; city residents would be better served if Mayor Walsh used his influence on Beacon Hill to convince the Commonwealth to establish one. 

Infrastructure banks allow states to leverage existing resources and build more projects with fewer dollars and accelerate construction. This approach ameliorates the impact of inflation on construction costs and creates jobs, private-sector income, and tax receipts more quickly. 

Equally important, the availability of a menu of financing tools coupled with the ability to pay other debts before the state infrastructure bank loan is paid back can attract both private capital and local government funding, further enhancing a state’s ability to husband scarce transportation resources. 

A third consideration in creating an infrastructure bank is the opportunity for states to develop a self-renewable, insulated source of future capital. Simply put, state banks recycle resources by re-loaning funds as they are repaid. The repaid funds effectively become state resources. 

Governor Patrick proposed a state infrastructure bank in 2012, but it was rebuffed by lawmakers. Perhaps Mayor Walsh could leverage his strong relationships on Beacon Hill to get his former colleagues to reconsider. 

One integrated system 

Real-world transportation customers just want to move themselves and their goods door-to-door as safely, quickly, and efficiently as possible. They aren’t concerned about what transportation modes that entails. 

We should be just as results-driven when it comes to creating a single, integrated regional transportation system. It shouldn’t matter if it requires using revenue generated by one mode to help support another. Such an approach would provide a realistic way to fund transit and help the MBTA address its ravaged finances. This concept of cross-subsidization is routine in many of the best-managed multi-product corporations, where having one of the company’s products help subsidize another can often boost the overall bottom line. 

In New York, two-thirds of the revenue generated by the Metropolitan Transportation Authority’s bridges and tunnels funds mass transit services. This approach encourages the support of overall goals that matter to customers. 

Better taxi service 

One thing that surely matters to transportation customers is being able to get a cab. A 2013 Globe Spotlight Team report laid bare a Boston taxi system that fails both customers and drivers due to unreasonable limits on the number of taxi medallions sold and archaic regional restrictions. A customer-focused approach requires a regional view of transportation issues, yet it’s currently illegal for non-Boston cabs to pick up customers who hail them on the city’s streets. During busy times, demand dramatically outstrips Boston’s supply of 1,825 taxis. 

The problem could be solved by enacting a version of former mayor Michael Bloomberg’s plan to deregulate New York taxi and livery services. The sale of 18,000 new non-transferable permits to for-hire livery vehicles authorized to pick up passengers by street hail is expected to generate more than $1 billion over five years. 

The Massachusetts Legislature should similarly empower MassDOT and the Department of Public Utilities to issue a new class of regional for-hire taxi licenses in the Boston area. The number of licenses should be determined by market study, with the state and affected municipalities sharing the resulting revenue, which could then be invested in the regional transportation network. 

Maintaining what we have 

Roadway pricing revenue must first be used to address the massive maintenance backlogs eating away at Greater Boston’s transportation network. The Longfellow Bridge, which is currently undergoing a major overhaul, is a case study in the price of failing to maintain what we build. The cost to repair the tattered bridge – which supports both vehicular and subway traffic – is estimated to be at least $200 million. But investing just 1 percent of the bridge’s construction costs in maintenance each year would have yielded more than $80 million in savings over the Longfellow’s 107-year life. 

Between 80 and 90 percent of a roadway’s lifecycle costs are spent on operation and maintenance, but we in Massachusetts still make most of our decisions about building transportation infrastructure based on the cost of construction. 

And maintenance isn’t just a roads and bridges issue. The MBTA suffers from a $3 billion maintenance backlog that results in deteriorating service quality and therefore reduces precious revenue. 

The 2009 state transportation reform law called for development of an asset management system, but the Commonwealth has yet to do it. Organizationally driven asset management requires a top-down approach that includes specific responsibilities and performance measures for every part of the transportation system with the goal of extending the life of assets until the cost of replacement is lower than maintenance costs. 

Aggressive capital asset management minimizes the need for major equipment purchases and allows equipment purchases to be evened out. Maintenance should be integrated into the capital plan, which would allow capital replacement to occur at a more consistent, less frantic pace. 

Minimum maintenance spending standards could also be adopted and incorporated into agency budgets. Long-term operation and maintenance contracts can save 10-20 percent over the life of a bridge or tunnel. 

Working with state government, there are other ways to ensure that maintenance funding isn’t shortchanged. Utah doesn’t allow any new capital projects to be funded until at least 1.1 percent of the replacement cost of existing assets has been appropriated for capital improvements. Missouri requires that a portion of general fund revenue be set aside for maintenance. Mayor Walsh should consider instituting a full life-cycle preservation program for Boston’s infrastructure. 

Few of these reforms can be accomplished immediately, and it’s unlikely that any mayor could achieve them all during his or her tenure. But one thing they all have in common is that they involve embracing fast-changing technologies that are changing the face of urban transportation. 

The ability to prioritize will also be a critical element of Mayor Walsh’s ability to realize the economic and quality-of-life potential of a 21st century urban transportation system Prioritizing means putting in place a set of objective criteria to allow the city to rank what will likely always be a long list of competing projects and allow the mayor and city representatives on Beacon Hill to push hardest for those that are likely to yield the greatest benefits. 

In Mayor Walsh’s case, it also means selecting from a long list of ways to improve mobility in Boston that require partnering with the Commonwealth and focusing first on the two or three that would enhance mobility in the city and for which he also has a good likelihood of coaxing the Commonwealth’s participation. 

Joseph M. Giglio is a professor of strategic management at Northeastern University’s College of Business Administration. Charles Chieppo is the principal of Chieppo Strategies LLC.

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