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How one state is using transportation to boost their economy — a story of success from Massachusetts

Massachusetts’ recent economic development success is attributable in part to the leadership of the past two gubernatorial administrations — one Democratic, one Republican — and their efforts to focus state investments on improving public transit, repairing critical infrastructure and doubling down on supporting and creating the walkable communities that are in high demand.

This short story is adapted from Transportation Innovations That Save States Money and Attract Talent, our new short policy guide for governors. It shows how a fresh approach transportation is fundamental to creating quality jobs and shared prosperity while running an efficient government that gets the greatest benefit from every taxpayer dollar. – Ed.

Flickr photo by Massachusetts Office of Travel. https://www.flickr.com/photos/masstravel/29675157103/

Massachusetts won a major endorsement for their strategy when, in 2016, General Electric announced it would relocate its corporate headquarters from suburban Fairfield, CT, to the Seaport neighborhood in Boston. GE reportedly turned down sizable tax-incentive offers from other states and chose, instead, to locate in a walkable and transit-served location where the company could draw educated younger workers. GE CEO Jeffrey Immelt said that in Boston, GE found “an ecosystem that shares our aspirations.”

GE was just one of dozens of companies that have located to town or city centers in Massachusetts in recent years, as chronicled by Smart Growth America’s Core Values research. Boston and adjacent cities like Cambridge and Somerville are booming and are magnets for educated, young workers.

Over the past two gubernatorial administrations the state has invested in these walkable communities that anchor a talented workforce and foster economic development.

Former Governor Deval Patrick’s (D) administration championed new funding for transportation projects and inked an agreement that combined funding from the state, the federal government, and a private real estate developer to finance a new subway stop at Assembly Square. The station opened in 2014 and anchors a major mixed-use development that has transformed a former industrial site. The Patrick administration also advanced plans for an extension of the Green Line light rail service to more Somerville neighborhoods.

Though Governor Charlie Baker (R) won while running against future automatic increases to the state gas tax, he clearly understands that improving transit and investing in these walkable places was critical to the state’s prosperity.

MassDOT Secretary Stephanie Pollack presenting at T4America’s Transportation Leadership Academy focused on performance measures.

To achieve this vision, he appointed Stephanie Pollack, a transportation expert and transit advocate, to run MassDOT, the state’s department of transportation. While some in the state were surprised by his pick of a notable transit advocate to run MassDOT, Governor Baker and Secretary Pollack have a shared interest in reforming the state’s transportation programs to ensure that transportation investments are connected to economic development goals. They’re intent on measuring the results that are important for voters and taxpayers and holding the agency accountable for meeting them.

“Transportation is not important for what it is, it’s important for what it does,” Pollack frequently says — as she did at the last gathering of our Transportation Leadership Academy.

The Baker administration considered abandoning the Green Line project when faced with escalating costs. But the benefits of the project were too significant for the state to walk away.

As Pollack has said, “The return on investment in transportation, whether it’s the Green Line extension or another [project], is not just measured in how many people physically use it. It’s also measured in improvements to the economy, decreases in people’s commuting time, creation of new jobs and reduction in greenhouse gases.”

Instead, the state’s largest transit agency, the MBTA, found ways to lower the expected costs by redesigning stations and is contracting new management for the project. While focusing intently on reforming MBTA, Baker sought workable plans in order to maintain the commitments that the commonwealth, under previous administrations, had made to communities.

In order to achieve clear outcomes with transportation dollars, MassDOT began to implement a new, performance-based process to help select projects in which to invest. Evaluating the expected outcomes from every possible project helped the agency put together a capital plan that balances repair of critical infrastructure and further improvements to transit.

In addition to funding transit, MassDOT has also targeted funding specifically at making local streets better for walking and biking through an incentive-based complete streets program. A small investment of state funds leverages local funds to plan and build projects to make streets better for people traveling by foot and by bicycle.

Massachusetts is enjoying economic returns from administrations that understood how tailored transportation investments could support walkable communities. The leadership and reform efforts under both Democratic and Republican administrations is paying off with a state that is attracting talented workers, drawing relocating businesses, and creating quality jobs.

Read our full guide for Governors, which covers how state transportation policy too often fails to accomplish these types of goals, and offers recommended, proven solutions with a track record of success in other states.

Helping governors save money and attract talent through a fresh approach to transportation

A new guide released today by Transportation for America shows governors and their administration how a fresh approach to transportation is fundamental to creating quality jobs and shared prosperity while running an efficient government that gets the greatest benefit from every taxpayer dollar.

With new governors set to take office in the new year and scores of incumbents returning and setting their agendas for 2017, it’s crucial that they consider how transportation can be a valuable tool for achieving their policy goals — whether producing savings in the budget, attracting and creating jobs, giving taxpayers greater benefit for each dollar, or building healthy and safe communities.

Transportation failures — whether excessive time that people or freight are stuck in traffic, decreasing air quality, flawed implementation of mega-projects, or the perceived and real inefficiencies of government bureaucracy — are a drag on the economy and quality of life for residents.

Many state departments of transportation just aren’t well calibrated to solve today’s challenges. Planning is isolated from development and other infrastructure decisions, state programs have a narrow focus on building highways to the exclusion of building unified, holistic systems, and the most efficient solutions are often overlooked in favor of overbuilt or ill-conceived mega-projects.

And above all, the recipe for successful local and regional economic development has changed significantly.

In the past, economic development was focused on recruiting and luring large employers and expecting new workers to follow the jobs. But younger workers are choosing where to live and then looking for jobs. Economic development now depends on building great places that draw and anchor talent. Quality of life, vibrant communities, and transportation choices are no longer simply nice add-ons, they are essential to economic growth and prosperity in communities large and small. And employers are making the same shift to stay competitive, seeking communities with these features precisely because they attract talented workers.

Yet the transportation policies and bureaucratic practices in so many states often fail to provide the infrastructure that helps build these kinds of places that businesses are now flocking too. Instead, many state agencies are continuing to offer transportation strategies more suited to solving yesterday’s problems. State policymakers need to change the focus of transportation spending in order to realize the full potential from these investments.

This new guide offers best practices to help state leaders achieve greater benefits and avoid costly pitfalls in their transportation programs, including several examples of states solving problems by instituting reforms within their transportation programs.

  • Virginia developed a new system to pick projects based on benefits and better communicate the benefits of each state investment.
  • Tennessee saved millions of dollars by right-sizing and reconsidering projects that had long been in their pipeline. One $65 million project became a $340,000 project, with nearly the same benefits.
  • Colorado built a new, multimodal corridor with tolled lanes and bus rapid transit to provide commute options.
  • California has launched a new, all-electric car share program in disadvantaged neighborhoods.

As new governors begin their terms and new legislatures are seated, it is a critical time to evaluate state transportation spending and how we can get greater benefits from these programs. The examples in this guide from around the country show how governors, administrations, and state DOTs have solved problems by reforming policies and practices. Download it today.


We can help states achieve these changes through tailored technical assistance and through START network policy support. Find out more and join this network today.

 

New Jersey shuts down almost all transportation projects amidst fight over nearly bankrupt transportation fund

New Jersey Governor Chris Christie shut down almost all ongoing state transportation projects this week after a legislative stalemate over rescuing the state’s bankrupt Transportation Trust Fund — a debate that hinged on pairing a gas tax increase with cuts to the state’s sales tax.

Flickr photo by Bob Jagendorf. /photos/bobjagendorf/5492860578

Flickr photo by Bob Jagendorf. http://flickr.com/photos/bobjagendorf/5492860578

This week New Jersey Gov. Chris Christie (R) ordered a halt to all of the state’s transportation projects, other than those that are “absolutely essential”, to conserve the dwindling cash in the state’s Transportation Trust Fund.

With an incredibly low gas tax that hasn’t increased since 1988, the state has relied on bonding, rather than new revenue, to pay for road and transit projects. As a result, an astonishing 100 percent of all fuel tax revenues are now devoted to paying down debt on past projects.

Since hitting a borrowing limit on June 30th, the fund is quickly running out of cash for new projects. The Governor, state Assembly, and bipartisan groups of senators have all backed various plans that would include a big hike in the state’s gas tax — the second-lowest state fuel tax in the country at 14.5 cents-per-gallon — to boost transportation funding.

But negotiations stalled over what tax cuts or new policies would accompany the increase in the gas tax.

While this funding crisis has been looming for years, state leaders — especially Gov. Christie — have long opposed any increases to the fuel tax as a solution. But last week, when facing a funding cliff, legislators seemed to agree on a plan to pair a 23-cent-per-gallon increase in the state fuel tax with cuts to the estate tax and an increase in the earned-income tax credit. This package had bipartisan sponsors in the state Senate when it was introduced last Monday.

But that same day, Gov. Christie came out of negotiations with Assembly leaders with a new plan: keep the 23-cent gas tax increase, but pair it with a one-percentage-point cut to the state sales tax. That plan (A12) cleared the Assembly on a 53-23 vote and was publicly backed by the governor.

The Senate balked at this alternative and the $1.7 billion hole it would blow in the state’s general fund. Cutting the state’s sales tax would jeopardize many state programs that depend on general funds, including slashing the main source of operating funds for the state’s transit agency while increasing the primary source of funds for roads.

Already, the state has cut operating funds for NJ Transit from $278 million in 2005 to just $33 million in 2016. Some extra money for transit has come from shifting long-term capital funds (including money originally set aside for Access to the Region’s Core trans-Hudson tunnel project that Gov. Christie canceled in 2010) to day-to-day operations. But the rest of the funding gap has come at transit riders’ expense, from fare hikes and service cuts, all while road users have enjoyed the same low gas tax rate since the year President Ronald Reagan left office. The Tri-State Transportation Campaign illustrated this in a picture:

Gov. Christie is blaming the transportation shut down on the Senate. But transportation advocates in the state accuse the governor of holding transportation projects hostage in a bid to win bigger tax cuts.

The shutdown will have real consequences for the state. Christie’s order has halted more than 1,100 active state, county, and local highway and transit projects. Stopping and eventually restarting construction projects can add considerably to their costs. People driving and people riding transit will wait longer — at least as long as the standoff lasts — for relief and improved service the projects would offer.

The short-term crises are a disaster at the time the state needs long-term funding to complete critical, major projects, like the Gateway Tunnel into New York City, the Hudson-Bergen Light Rail extension, and the Glassboro-Camden line.

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We’re closely watching New Jersey to see how the state resolves this funding crisis. Many state legislators have expressed an unwillingness to increase the gas tax in the past because they believe their citizens don’t have faith that the existing money is well spent. How can these legislators implement smarter policies to boost the confidence of those citizens in order to raise new money for transportation?

Join us for Capital Ideas II in Sacramento November 16-17 for in-depth conversations on state transportation policy and politics. Register today!