Strapped to the status quo express
We can’t keep running away from the need for new revenue
MASSACHUSETTS HAS A PROBLEM talking candidly about its transportation revenue needs.
This is not a new problem. We have been in its grip for decades, and the result has been public policy based largely upon timidity, small and largely ineffective steps, and creative sound bites.
Beginning in 1991, governors have often gone to great lengths to avoid confronting our transportation revenue gaps and shortfalls. The most notable gimmick was the embrace of the bad practice of using borrowed money – capital funds that should have been earmarked for construction projects – to pay for employee salaries. This made it appear that there was plenty of money available to pay for operating costs, which was not true. This practice, which Gov. Charlie Baker has (to his credit) largely ended, reached its apex under former governor Mitt Romney.
Avoidance takes many forms. In 2007, when the Transportation Finance Commission (I was a member) was issuing its final report on the transportation funding crisis, the governor held a competing press conference on a casino gaming initiative, ensuring that the call to fill the commission’s projected $20-plus billion transportation revenue gap would be drowned out in the next day’s news.
A powerful coalition of gas tax opponents, led by auto industry groups and conservative “no-tax” ideologues, pushed back hard against our proposal. Legislative leaders kept their distance. The then-Senate Ways & Means Chair called me into his office to explain that he would be promoting a one-cent hike in the sales tax as a substitute. “People hear ‘19 cents’ and they think it’s a lot; one penny doesn’t sound like much,” was how he explained his reasoning. It did not matter that the sales tax was a proven poor performer as a predictably robust revenue source. We ended up with a sales tax increase, only a portion of which was dedicated to transportation, that barely raised enough net new revenue to manage our needs. Four years later, the Legislature enacted a three-cent gas tax hike, a small and (with the subsequent voter rejection of inflation indexing) largely ineffective step forward.
Today, we face a $7-plus billion state-of-good-repair gap at the MBTA and lack the revenue necessary to advance critically needed initiatives like regional rail, or adopt new service delivery models that would make the bus system competitive with ride-hailing apps, or connect the Blue Line to the Red Line and to Lynn. The gubernatorial election might offer an opportunity to have a full and honest discussion about how to meet these and other mobility needs, but (sadly, predictably) no such discussion is taking place. Instead we have one candidate who takes a “no-new-revenue-is-needed” approach, and another who acknowledges the need but wants to tax college endowments to raise the money.
It’s a good thing that at least one candidate acknowledges the funding gap, and is offering an idea to deal with it. Whether taxing college endowments is a good idea is another matter. It is freighted with issues, and even in the best of circumstances it offers a revenue stream that is likely unsustainable over time with no guarantee that any of it will be spent on worthy transportation projects by future administrations.
Curiously, the “no-new-revenue” candidate has pretty much acknowledged that his administration will raise MBTA fares again next year, when the election is safely behind us, once again placing burdens on transit riders alone rather than on all people who benefit from an economy and a region made stronger by our transit system.
Refusing to even engage the topic of raising net new revenue for transportation ignores the reality that the MBTA lacks the resources it needs to undertake an accelerated state-of-good-repair effort and advance strategic initiatives on a scale and timetable that responds to our current and projected growth. Looking to non-transportation sources for new revenue is just another way to avoid asking anyone to step up and participate in renewing their transportation system; it holds harmless the people and companies that contribute to economy-killing traffic congestion even while those same roadway users are heavily subsidized by our current revenue system.
There are many ways we can fairly raise net new revenue from transportation sources to make our transportation system more reliable and competitive. I have written about many of these before, but it may be worth a short reminder.
1. Empower municipalities to impose regional fees or taxes to support regional mobility projects.
3. Impose an impact fee on ride-hailing apps (Uber and Lyft) that fairly assesses them for their now-proven negative impacts on roadway infrastructure, congestion, and emissions.
4. Introduce a pilot voluntary vehicle miles traveled program that assesses drivers based on how much they drive on designated state highways.
5. Introduce congestion pricing on all toll facilities and dedicate that funding to providing sustainable mobility options for drivers.
6. Implement a “cap and invest” approach to the use of fossil fuels, something commonly referred to as RGGI (Regional Greenhouse Gas Initiative) for Transportation.
7. Impose the sales tax on the sale of gasoline.
8. Utilize strategic initiatives tied to land use and development that reflect their impacts on mobility. Among these are: transit mitigation assessments applied to real estate development in designated districts that benefit from (and contribute to the burden on) our transit system; congestion offset payments from developments that induce additional vehicle miles traveled within designated metro Boston congestion “hot zones,” and value capture applied to properties along transit corridors or at transit hubs to redirect over time some of the increased value of the properties benefiting most from the transit system.
Leadership is about doing more than appeasing your twitter followers or your campaign donors. It’s about more than trying to avoid the substantive revenue discussion we need by turning instead to slogans. “Tax the rich” is as beguiling a sound bite as “make it work,” “reform before revenue,” and “fix it first.” They are powerful slogans that manage to penetrate and drive the electoral narrative, so give them credit for that.
But please do not mistake slogans for thoughtful plans. They don’t ever actually fix the problem, but they make people feel virtuous by offering concepts most can agree with: Who doesn’t want to fairly assess the wealthy? Who doesn’t want to make the system work? Who doesn’t believe in meaningful reform, or fixing things as a priority?
The facts are clear. The data is consistent. Traffic congestion is chronic, worsening, and causing economic harm to the region. The mMetro Boston transit and rail system lacks reliability, connectivity, modernity, and resilience. Critical elements of the transit system are not resilient to winter storm conditions. New approaches to mobility such as Uber and Lyft are taking us backward by increasing urban vehicle miles traveled and emissions while siphoning riders away from transit.
Most people are willing to listen to sensible arguments and support making prudent investments in our transportation system, to improve the system today, explore new business models (like regional rail) and ensure it is ready to handle the needs of tomorrow. The obligation – the burden – of public sector leaders is to make the case for those investments candidly and honestly and in a way that will capture the imagination of people. Making that case requires a story, not a fable. It requires not a fantasy, but a narrative that is honest and reflective of shared values and best practices. Sadly, government leaders often either don’t have enough time or focus to craft and nurture such a narrative or they refuse to do so, preferring to settle into the comfort of the status quo.
Despite the irrefutable realities of a transportation system in need of accelerated investment, renewal, and modernization, we remain firmly strapped to the status quo express, going nowhere fast.I’m not satisfied with that. Are you?
James Aloisi, a former state secretary of transportation, is a principal at Trimount Consulting. He serves on the TransitMatters board.