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Tag: massachusetts

A state with one of the oldest transportation systems tries to make things new — new state series

It’s a state that boasts the first active subway line and a network of turnpikes that predated the Interstates, so it shouldn’t surprise you that Massachusetts has some of the oldest infrastructure in the country.

Though Massachusetts’ bridges are middle of the pack in deficiency nationally, they’re beyond middle age (an average of 56-plus years) and many of its busy subways, bus lines and commuter trains – and the roads, bridges and tunnels that carry them — are starting to fall apart after decades of heavy use. Saddled with debt from the Big Dig (among other things) and chronically underfunded after years of budget cuts, Massachusetts leaders and advocates are trying to reform their transportation agencies while raising new money to bring an aging system into the 21st century.

Boston I-93 Tunnel

With MAP-21 out the door, attention has shifted from Washington to the states. In many cases, states are deciding that they need more money for transportation and are embarking on ambitious and often groundbreaking plans to raise additional revenues for transportation. This post is part of a longer series we’ll be doing in 2013 looking at how states are addressing the need for more transportation dollars, along with key policy changes. Visit the home for state plans here, where we’re tracking all of the news. – Ed.

These aging systems in Massachusetts combined with years of lacking the needed money for maintenance has left things in perilous shape and makes for unreliable service on the roads and rails— along with unsustainable levels of debt that force MassDOT to use their capital funds (intended for construction, expansion, new trains, etc.) just to keep the system operating day-to-day.

Here’s one crazy fact for you: 100% of MBTA (The “T”) fare revenues go to paying down debt, because Big Dig-related debt largely ended up on the MBTA books.

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While a significant 2009 reform merged the Bay State’s myriad of transportation agencies into one MassDOT, the revenue question was left unanswered. Reform did indeed result in some savings, however the funding gap identified by numerous Blue Ribbon Commissions and nonpartisan think tanks has remained and indeed expanded in the past four years.

A big source of the problem is that thanks to generations of budget cuts, a painful recession at a terrible time and rising expenses (like healthcare), the state has been paying for everything with bonds and other non-sustainable sources (read: debt.) A couple of winters of failing commuter trains, unreliable bus lines and overcrowded subway cars has helped convinced the public that the system is falling apart.

The state recently tallied up — confirmed by other independent sources — that they need about an extra $1 billion a year to bring the system into a state of good repair, fully fund operations and address some critical “expansion” projects.

But enough about the past, what’s the plan going forward?

Paraphrasing our partners at the T4 Massachusetts coalition, how will Massachusetts raise enough money from sustainable sources to fully fund the systems’ operations and invest in its future, spent in a transparent manner that helps increase access to transportation choices across the whole state, supports the economy and reduces greenhouse gas emissions from the transportation sector?

Gov. Deval Patrick introduced a plan that addresses some of the issues through dedicated sales tax revenue with some very progressive elements. His plan would:

  • Lower the sales tax rate from 6.25% to 4.5%, but deposit it all to an infrastructure fund for multiple things, including transportation. This alone will reduce revenues by $1.1 billion, but…
  • Index the gas tax to inflation to bring in an additional $13 million in 2014, and up to $118 million more by 2021. (The state gas tax hasn’t been raised since 1991 and was never adjusted for inflation, so it’s actually at its lowest level since the introduction of the tax.)
  • Increase vehicle fees by 10% every five years beginning in FY16
  • Increase tolls by 5% every two years beginning in FY15
  • Raise state income tax from 5.25% to 6.25% with changes to exemptions to raise $2.8 billion.
  • Increase MBTA transit fares 5% every two years.
  • Unlike some other states, the new money raised is expressly intended for multimodal projects. There’s no restriction on spending money on transit.

There’s a statewide pilot program for a vehicle-miles-traveled tax, a proposal to pay down Big Dig debt with other funds (freeing up transit money for, you know, transit), and the Transportation Investment Act, which would help guide how money gets spent in the state. This act, supported by a broad cross section of business, community and environmental groups and backed by the T4MA coalition, would send money to Regional Transit Agencies across the state, invest in low income communities, and enable DOT to comply with the states’ other obligations, like their “mode shift” plan to triple the share of travel in Massachusetts by bicycling, transit and walking. (Read Streestblog for more on that.)

The ball is currently in the Legislature’s court, but the clock is ticking.

A plan must be approved in time for the MBTA’s budget submission deadline around the corner in April or there will definitely be more fare hikes to keep the MBTA operating. The impact of that could be disastrous for lower-income commuters who depend on the “T”, a system that’s already experienced drastic fare hikes over the last 7-8 years.

Rethinking the gas tax: Suddenly it’s the theme of 2013

Is the per-gallon gas tax going the way of the full-service filling station?

To look at the flurry of proposals coming out lately, you might think so. Since the start of the year, major new proposals from industry leaders, governors and state legislatures have sparked a new debate over the ways we collect revenue collection for transportation — at the federal, state and local levels.

Earlier this month, the outgoing head of the American Association of State Highway and Transportation Officials, John Horsley, proposed replacing the per-gallon federal tax with a sales tax on fuel. Although he didn’t specify a level, an AASHTO press release indicated it should be set “at a level that restores solvency” to the transportation trust fund, meaning it would have to take in at least $15 billion more a year just to keep spending at current levels. While some no doubt will deride it as a stealth tax increase, Horsley said, “The cost of the reform to taxpayers would be less than $1 per week, per vehicle.”

At the same time, 2013 already has seen several ambitious proposals for funding transportation outside of the excise tax on gas.  Massachusetts Gov. Deval Patrick in his state of the state address proposed raising his state’s income tax rate from 5.25 to 6.25 percent and lowering the sales tax from 6.25 percent to 4.5 percent, while earmarking sales tax revenue for infrastructure, with a significant share dedicated to public transportation.  Patrick said those moves would raise $1.02 billion in new revenue per year on average for the next ten years – none of it from a per-gallon gas tax.

Last week came a report from Pennsylvania that Republican Gov. Tom Corbett is preparing to a release plan to add nearly $2 billion to the state’s transportation funding pot. Though the details are speculative pending a public unveiling next week, he has pledged that the money won’t come from an increase at the gas pump.

These proposals come on the heels of the month’s most controversial, headline-grabbing pitch from Virginia Gov. Bob McDonnell to scrap his state’s gas tax altogether.  Instead, he would raise the state’s sales tax from 5 to 5.8 percent – ironically on everything but gasoline – while increasing vehicle-registration fees and adds an annual $100 charge for drivers of alternative-fuel cars. Those changes would raise an extra $3.1 billion over five years, he said.

At bottom, the recent move away from gas taxes as the go-to source of transportation funds is a nod to new realities: Their earning power is shrinking every year, and car-dependent voters will not stomach increases commensurate with their desire for a robust transportation network.

At the same time, both the highway lobby and environmentalists are seeing their long-held arguments undermined by experience. Environmentalists have contended that gas taxes should rise to slow consumption and speed the transition away from oil. The political reality is that gas taxes can’t be imposed in the U.S. in a way that changes behavior. Behavior now is changing, but for other reasons.

The highway lobby has spent years and millions making the case that gas taxes are “user fees” and are rightly devoted to roads. But with experts like DOT Secretary Ray LaHood predicting that nearly every vehicle will be a hybrid or electric a decade from now, most motorists will be paying little or no such “user fee” absent a major change.

That, of course, says nothing about meeting the needs of the vast majority of Americans who will be living in metro regions too crowded for one-person-per-car travel. State gas taxes certainly can’t meet those needs: 22 states have a constitutional prohibition against spending gas tax revenue on anything but roads, and eight states have similar statutory restrictions.

The reality today, though, is that gas taxes only cover half of the bill for building and maintaining our road network, and that ratio is dropping every year. At the local level, of course, nearly all road and transit costs are paid by sales, property or other non-fuel taxes.

While moving away from the gas taxes, all of the recent proposals — coming from Republicans in VA and PA or Democrats in MA, MN and MD – would amount to asking citizens to pay more for transportation infrastructure. That is something that polls show voters increasingly are willing to do when they understand what the money will be used for.

As we have said since the rollout of our “Blueprint” in 2009, we believe all options to increase funding for reinvesting in America’s infrastructure should be on the table.  Back then, T4 proposed a variety of options including a 20 cent increase in the gas tax, converting the federal gas tax to a sales tax, or imposing a per-barrel fee on imported oil.

The gasoline tax has its merits, but given the lack of political will to raise it significantly, and the wide range of needs, it’s time to begin thinking of  infrastructure as a basic government function that can, and should be, funded the full range of available revenue sources. Our global competitors, after all, have recognized this for quite some time, and are moving ahead of us in building a 21st century infrastructure.