Use debt to build out transportation infrastructure
May seem scary, but now is the right time
THE COVID-19 CRISIS has put a $600 million transportation funding package in the Massachusetts Legislature on pause. Plummeting fare and tax revenues have left lawmakers faced with a dilemma: the need to invest more in our statewide transportation system remains urgent, yet the funding tools relied upon in “normal” times are untenable.
Rather than delaying infrastructure improvements, the Legislature should invest in projects immediately. Millions of residents under quarantine have cleared the way for construction on roads and rails. The Federal Reserve is supporting state government debt, and Massachusetts should waste no time seeking debt-financing to support important projects that meet our mobility needs and build the transportation network connectivity and resilience we urgently need in order to restore our economy. Now is the time to establish dedicated bus lanes, create protected bike lanes, begin the transition to a regional rail service delivery model, and rebuild our subway system.
Gov. Charlie Baker has estimated that the state’s COVID-19 caseload peak will come in mid-April. With social distancing guidelines in place, the number of cases should drop considerably by late May to a level that reduces the burden on our health care system. However, some degree of social distancing guidelines will likely remain until a vaccine, proven drug treatment, or herd immunity emerges. During this time, when the health system has regained footing and social distancing keeps people home, the state should begin improvements to public transit.
Boston has the worst rush hour commute in the country, and the state has an underfunded, unreliable public transportation system. Normally, infrastructure improvements are lengthy, logistical nightmares, often attempted late on weekend nights. But a silver lining of today’s empty roads is the opportunity to build for a better tomorrow. The MBTA and its host municipalities should expand the use of dedicated bus lanes, which have already reduced commutes in several cities. It should also build protected bike lanes, helping bikers in cities like Boston, where the number of bike commuters has increased 180 percent from 2007 to 2016. The MBTA should move up and extend hours on its subway improvement projects, aggressively shortening timelines while ridership is low and accommodating today’s riders with bus services is easier.
Public works projects must prioritize safety, and there is reason to believe that by the summer safe working conditions will be possible. As domestic and international PPE manufacturing grows exponentially, medical supplies and critical equipment should proliferate beyond health care workers. Increased COVID-19 testing among the general public and rapid diagnostic tests should help minimize worker risks as well. If we are serious about rebounding quickly from this crisis, we must treat construction workers as essential employees and provide them with the equipment they need to perform their work with maximum attention to personal health and safety.
Funding infrastructure spending presents another challenge. The MBTA projects that March fare revenue will be $35 million short of budget targets. Even after the economy reopens, riders could be hesitant to take public transportation. After 9/11, ridership on the New York City subway did not return to normal levels for six years. And while fare revenues account for about 24 percent of MBTA funding, the effects of COVID-19 will also pummel the other major sources of MBTA funding – state and local government.
Instead of relying on immediate revenues, the state should debt-finance these projects. By both directly buying municipal bonds and leaving open the possibility for broader action in the municipal bond market, the Federal Reserve has supported the bond market. Massachusetts should now seek debt-financing. Although debt financing seems scary during an economic collapse, this would be a wise investment for three reasons.
First, the Massachusetts economy has a strong foundation. Major industries, including health care, medicine, technology, financial services, education, and fishing, have not lost their underlying value. Second, infrastructure spending will act as a works program, akin to the New Deal Works Progress Administration, helping those who need work today. Third, low-income workers, who are suffering the most from the current economic shock and disproportionately ride buses and the subway, stand to benefit from improved public transportation. Improved transit will be crucial in reigniting the post-COVID economy.COVID-19 has already sent alarm bells ringing about the future of public transportation. But its collapse is by no means a foregone conclusion. Proactive action will create an improved, more reliable transit system. We must use this unique moment in time to pursue it.
Samarth Gupta is a Rhodes Scholar at Oxford University.