Baker: No rush to hit T revenue button

THE BEST LINE of the morning at Gov. Charlie Baker’s breakfast speech on Thursday to the Greater Boston Chamber of Commerce didn’t come from the governor, but from Paul Guzzi, the well-respected head of the business organization who is retiring later this year.

When a question came, following Baker’s remarks, about the state of the region’s transit system, in light of the near meltdown of the MBTA under the weight of this week’s storms, the governor said he will be having a conversation in the coming days with his transportation secretary, Stephanie Pollack, and others and will have more to say afterwards.

“That will be a very interesting conversation,” said Guzzi, drawing muffled laughter from the overflow crowd in the ballroom of the Fairmont Copley Plaza hotel in Boston.

The reason it will be interesting, Guzzi made clear in prefacing his comment, was because Pollack opposed a ballot question in November that proposed stripping away the indexing of the state gas tax so that it increases automatically with inflation. Opponents of the question said the indexing was vital to ensure the revenue stream needed to maintain the state’s transportation infrastructure. Baker supported the tax-cutting question, which prevailed, and he has vowed to oppose any new taxes as governor.

Transportation advocates and an independent commission have long argued that the state needs to commit more funding to its aging transportation infrastructure, including the T, the nation’s oldest subway system. A report prepared for the incoming Baker administration by the advocacy coalition Transportation for Massachusetts estimated that the state needs to identify $500 to $600 million per year in additional annual funding to properly maintain its existing transportation infrastructure and make needed improvements.

“Everyone always wants more money for everything, I get that,” said Baker this morning.

He said the MBTA has new subway cars in the pipeline, but lamented the fact that work to begin assembly of them is being held up by litigation filed by a company that lost the bid for the work. He also pointed to the Legislature’s move last year to raise the gas tax by 3 cents, which will be bringing new revenue into the transportation budget.  He also said it needs to be acknowledged, in considering the transit system’s problems this week, that the state was hit by a storm “that was unlike pretty much any other.”

With all of that in mind, he said, “I’m going to spend some time with Stephanie and others talking about this before we just automatically hit the revenue button.”

Guzzi, in remarks that seemed unusually pointed for the affable business group leader, didn’t let the issue go at that. “Everyone in this room knows you don’t solve problems simply by throwing money at things,” said Guzzi.  “I also think that everybody knows that when you have a very old infrastructure, you have to spend some money from some place.”

The Chamber was part of a coalition of business, transportation, and environmental groups that opposed the ballot question repealing the gas-tax indexing. Guzzi’s comments seemed to signal continued concern from the business community about the condition of the state’s transportation infrastructure – and the availability of funding to address its needs.

Earlier in his speech, Baker seemed to suggest he would welcome just the sort of “interesting” conversations within his administration that Guzzi later alluded to.

Baker said he has assembled a bipartisan team of cabinet secretaries and other officials.  “We wanted a diverse group of people who could sort of have at it and have it out on the issues of the day,” he said, “and in the end, bring their backgrounds and their knowledge to bear on” important issues. “That’s clearly a way that would give us what I would describe as a far more rich debate and conversation than we might have if we just had one point of view at the table.”

In a session with reporters following the speech, Baker said $40 million in transportation-related cuts that he’s proposed as part of his plan to fill a $768 million budget deficit will not affect transportation services. He said the cuts were a combination of freezing new hires, expenditure savings resulting from unanticipated higher transit fare revenue, and some administrative cuts.

According to the Office of Administration and Finance, the changes include returning to the general fund $16.4 million in higher than anticipated revenues from increased ridership at the MBTA and unexpected fees from the Registry of Motor Vehicles, primarily from vehicle inspection stickers. Baker also plans on saving nearly $10 million over the remaining five months of the fiscal year from his hiring freeze, $5.3 million by not filling empty positions at the T and another $4.6 for jobs across the Department of Transportation.

MassDOT will also save another $5 million in general operating materials costs, such as such as taking advantage of lower oil costs to buy asphalt, which is made from refined oil. Baker has left it to his transportation department heads to find another $8.3 million in administrative reductions at both MassDOT and the T. In total, MassDOT will lose $24 million from an $850 million budget while the T will drop $16 million out of a $1.9 billion budget.

In terms of a longer-term plan for addressing the state’s transportation needs, including revenue and spending issues, Baker said, “We’ll have more to say on this in a couple of weeks.”

Jack Sullivan contributed to this report.