Baker, Legislature at odds on transportation funding

Pollack: Carbon fee is cap-and-invest program, not a tax

GOV. CHARLIE BAKER and the Legislature are at odds on how much money is needed to fix the state’s ailing transportation infrastructure.

Baker appeared before the Legislature’s Transportation Committee on Tuesday, highlighting a series of major investments his administration has already made and a long list of others he wants to fund with an $18 billion bond bill. More than $10 billion would go for roads and bridges, $5.7 billion to the MBTA, $50 million to address transportation bottlenecks across the state, and $50 million for tax credits to promote telecommuting.

“I think it’s important to stress here, this capital plan, and the massive growth in activity it entails, can be completely executed with the funding that is currently available,” Baker told the lawmakers. “I know this is counterintuitive to argue at a bond bill hearing, but funding is actually the easiest part of the critical paths we face.”

Part of that funding would come from bonds (loans, essentially) backed by anticipated federal revenues and bonds backed by half of the money expected to flow from a fee assessed on the carbon contained in vehicle fuels. Massachusetts, 12 other states, and the District of Columbia are working out the details of the carbon fee and expect revenues to start flowing in 2022.

Transportation Secretary Stephanie Pollack admitted the carbon fee will be passed along to drivers in the form of higher gasoline prices, but she made clear that she believes the price on carbon is not a broad-based tax of the type the governor generally opposes. “It is not a gas tax,” she said. “It is a cap-and-invest program.”

Lawmakers on the committee listened politely, asking relatively few questions. But afterwards, the two chairs of the committee, Rep. William Straus of Mattapoisett and Sen. Joseph Boncore of Winthrop, said they didn’t agree with the governor’s assessment of the state’s transportation needs or his approach to dealing with them.

Sen. Joseph Boncore (left) and Rep. William Straus after a Transportation Committee hearing. (Photo by Bruce Mohl)

“I think we have a substantial need and funding exclusively by borrowing doesn’t seem to me necessarily a prudent thing to do, whether in good times or bad times,” Straus said.

“I tend to disagree with the governor’s statement that money is the easy part,” Boncore said. “This committee has an awesome responsibility to not do what previous governors and legislatures have done in terms of just borrowing against our future.”

Straus and Boncore appear to be in sync, and they say the leaders of their two chambers are also on the same page when it comes to the need for additional transportation revenues, which would leave Baker as the odd man out. Straus is working with two other members of Speaker Robert DeLeo’s leadership team on a transportation bill the House is expected to take up before the branches recess for this year.

Both Straus and Boncore appear to be leaning toward an increase in the gas tax, and possibly other revenue-raising measures as well. Both are wary of waiting for the revenue from the carbon fee on automobile fuels.

“Right now it looks to me like it’s half of a wrapped present under the tree. We don’t know the dollar amount. We haven’t seen an actual per-gallon fee or tax, whatever you want to call it,” Straus said. “Obviously, if we’re going to include something like that in the bill, we’re going to need a more specific number.”

Straus also expects the fee on the carbon in vehicle fuels to be set at a high enough level to spur less use of fossil fuels for driving, which will lead to a decline in gas tax revenues. He asked the governor how he would make up for that falloff in gas tax revenue, and Baker responded that he would have to do some modeling on the issue before responding. But the governor indicated any decline in gas tax revenues would probably materialize slowly. He noted drivers are actually driving more these days, two of the top-selling vehicles are trucks, and electric vehicles are gaining adherents slowly.

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Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

As big as Baker’s bond bill is, it doesn’t include funding sources for a number of projects and initiatives. Initial seed money is available for such projects as connecting the Red and Blue lines and overhauling the commuter rail system, but long-term funding hasn’t been identified.

Pollack said full funding won’t be needed for some time. On commuter rail, for example, the MBTA’s Fiscal and Management Control Board hopes to reach consensus in November on what the system should look like in the future. Price estimates of the six proposals currently under consideration run as high as $29 billion in 2020 dollars. Most analysts think it will take a couple of years to translate the T’s commuter rail vision into concrete bidding documents, and years longer to do the actual work. By then, lawmakers may be talking about another bond bill.