Is Baker’s commission another delay tactic?

Is Baker’s commission another delay tactic?

Need for more transportation revenues hasn’t changed

LIKE RED LINE TRAINS, the state’s efforts to address transportation funding are constantly bedeviled by fits and starts in a seemingly endless quest to reach the destination.

In the latest iteration, the Baker administration has proposed the creation of a commission to analyze transportation needs and develop a plan to pay for them, though the scope and makeup of the commission appear to be a work in progress.

Time will tell whether this is a serious initiative or simply a delaying action to avoid the question of new revenues, which virtually every independent study of the past 15 years has concluded are essential to maintain and modernize the state’s highways and public transit systems.

The long and sad transportation funding saga really began in earnest 25 years ago with the state’s decision to build the Central Artery. It’s not that the decision itself was wrong but that the price tag was grossly underestimated and state leaders never raised enough tax or toll dollars to pay for it.

The result was predictable. Funding was cut for other important highway and bridge projects across the state and the MBTA’s state-of-good-repair backlog grew ever larger.

With former governor Paul Cellucci opposed to new taxes in the late 1990s, Charlie Baker, his secretary of administration and finance, resorted to a Wall Street concoction — grant anticipation notes borrowed against future federal highway aid — to help pay for the skyrocketing costs of the Central Artery, extending for 20 years the project’s impact on other critical transportation initiatives.

Despite taking office during a fiscal crisis, former governor Mitt Romney had no more interest in new taxes than Cellucci. In 2004, the Legislature passed a transportation reform bill that created a 13-member Transportation Finance Commission, on which I served, to determine long-term transportation financing needs and make recommendations to fund any shortfall. Working over a three-year period, the commission released a detailed analysis of its findings in March 2007 and an equally detailed set of recommendations six months later.

The commission identified an almost $20 billion, 20-year shortfall in funding for basic transportation needs. The recommendations to close that gap included $2.5 billion of reforms and $18 billion in new revenues, including raising the gas tax by 11.5 cents, indexing the gas tax to inflation, and moving to “a system of direct road user fees as the principal source of transportation funding using modern technology.”

No one contested the report’s conclusions, which are just as valid today as they were 10 years ago. Many of the reform recommendations were subsequently adopted, but political leaders have struggled mightily with the call for new revenues.

The tone was set immediately when former governor Deval Patrick, concerned about the recommendation for revenues, conveniently scheduled a competing press conference at the precise moment that the Transportation Finance Commission was releasing its findings. Despite his ploy, the report received wide attention and support gradually built for new transportation revenues.

The key moment came during 2012 when Rich Davey, the secretary of transportation at the time, toured the state to build support for transportation revenues, presumably with Patrick’s blessing. Business, environmental, and transportation groups all joined in support, and then-Senate President Therese Murray and House Speaker Robert DeLeo each announced that transportation would be a priority for the 2013 legislative session.

However, to everyone’s surprise, at the beginning of the 2013 session Patrick undercut the broad consensus when he rejected transportation revenues and instead proposed a major reform of the tax code, including a large increase in the personal income tax and the ending of three dozen exemptions. Patrick’s proposal was dead on arrival, but it put the Legislature on the defensive and undermined support for a meaningful increase in the gas tax.

In the end, the Legislature cobbled together a revenue package that depended on the ill-fated tech tax, which was quickly repealed under a storm of criticism. The package included a paltry 3-cent increase in the 24-cent gas tax, which had lost 50 percent of its value since it was last raised in 1991.

The one important change would have tied the gas tax to inflation. Indexing would have cost the average motorist only $5 more each year, but the power of compounding would over time have generated hundreds of millions of dollars and appreciably closed the gap identified by the Transportation Finance Commission.

However, Republican legislators placed a repeal measure on the 2014 ballot that was supported by then-gubernatorial candidate Charlie Baker. The repeal was narrowly approved by the voters, which left the state effectively back at square one in terms of new revenues for transportation.

Picking up on one of the key Transportation Finance Commission recommendations, the Legislature, in a 2016 transportation bond bill, included a provision directing the Baker administration to seek federal funding for a voluntary pilot program to charge drivers based on vehicle miles traveled, or VMT. Baker vetoed the provision, contending that he needed more information on how the pilot program would work when, of course, that was the very purpose of the pilot in the first place.

The latest effort to generate transportation revenues comes from the so-called millionaires’ tax, a proposed constitutional amendment to increase the income tax on individuals earning more than $1 million by 4 percentage points. If approved by the voters in November 2018, the $1.5 to $2 billion raised by the tax would in theory go to transportation and education, though in reality there is no guarantee that would be the case.

However, a coalition of business groups is filing a legal challenge to knock the constitutional amendment off the ballot. Furthermore, retailers have filed a ballot question to cut the sales tax rate from 6.25 percent to 5 percent, which would reduce tax revenues by an estimated $1.2 billion. So if both tax measures pass, the net effect would be a small increase in tax revenues, not enough to make even a dent in long-term transportation needs. And if the millionaires’ tax is not on the ballot and the sales tax is approved, the state will be thrown into a full-blown fiscal crisis.

Which brings us back to the Baker administration’s proposed commission. Commissions can serve a useful purpose, as the Transportation Finance Commission demonstrated, but they can also be used to delay action or avoid making hard political decisions.

Certainly with all the changes engulfing transportation and society, a commission could do a lot of good work. But the conclusions on revenues would be fundamentally the same as laid out by the Transportation Finance Commission: Massachusetts needs significant new revenues in order to maintain and modernize our roads and bridges and public transit systems; and there are only two direct and meaningful revenue sources to turn to — the gas tax and open-road tolling, or VMT. The pace at which the former declines will determine how rapidly we need to expand the latter.

The reality is that with the uncertainties around the ballot questions and with 2018 being an election year, neither Baker nor the Legislature has any interest in addressing the issue of transportation revenues in 2018.

Meet the Author
The key will be 2019 when the ballot questions have been decided and either Baker will be re-elected or a Democrat will have assumed the governorship. Perhaps then we can finally face the transportation funding realities that one administration after another has steadfastly ignored.

Michael Widmer is the former president of the Massachusetts Taxpayers Foundation.

  • Mhmjjj2012

    What’s going on here? The former president of the Massachusetts Taxpayers Foundation is calling out former Governor Patrick for his “ploy” to “conveniently” schedule a competing press conference “at the precise moment that the Transportation Finance Commission was releasing its findings” when just last week the MTF essentially took similar steps to overshadow the senate transportation report. Now throw in Governor Charlie Baker’s proposed transportation commission which has received extensive publicity even though it came totally out of the blue and still hasn’t been created by an executive order and what do we really have? Basically nothing. If Governor Baker was truly interested in commissions and their findings then he should take action on a commission report that landed on his desk two years ago. The Foundation Budget Review Commission report detailed how the state is not meeting its financial obligations to local public schools as required under the 1993 Education Reform Act. It’s been conveniently ignored and collecting dust since its release. Why add to the pile with another commission, another report and more inaction?

    • J Powers

      “Why add to the pile with another commission, another report and more inaction” they pay for another report to get the findings they want,

      they did the same thing with the first MBTA report which did NOT favor privatization of core services.

      • Mhmjjj2012

        It seems like it’s all about pushing decisions way into the future…the decisions that should be made now. That way the MBTA continues to be treated like a carcass and the only real issue is how the wolves want to divvy it up. By the way, do you have the title of that MBTA report? I’d like to check it out.

        • Beeker

          I have to agree with your assessment.

        • J Powers

          Mhmjjj2012 “Ch2mhill”

    • downtown21

      “Why add to the pile with another commission, another report and more inaction” they pay for another report to get the findings they want,

      The answer to that is right in the headline.

  • QuincyQuarry.com

    The Commonwealth has run up its debt card to its credit limit. As such, it is only reasonable for Beacon Hill to now figure out how to otherwise fund needed vehicular transportation MAINTENANCE efforts going forward, much less build new infrastructure.

    Turning ALL MA road into virtual toll roads via implementing a Vehicle Mileage Tax is a DOA proposal. If you think the later repudiated by voters inflation indexing of fuel taxes raised a stink, endeavoring a VMT is likely to result in the mother of all feedlots.

    So too are implementing all manner of transfer tax proposals (e.g., the so-called Millionaire’s tax) if for no other reason that the Legislature will play games with how these new revenues are spent. At the same time, some of these proposals could provide some enhanced funding for public transportation.

    As such, we are stuck with revisiting the use tax that is the fuel tax as regards roadways.

    Granted, wear and tear usage versus mileage rates have changed given higher mileage new conventionally powered vehicles, hybrids and EV’s as well as will continue to do so; however, at the end of the day a fuel tax is the easiest, cheapest cost to collect, most equitable and most reasonable way to fund transportation infrastructure going away.

    NOTHING comes even close in second place.

    With fuel prices at near historic lows on duly inflation adjusted bases, Beacon Hill – meaning especially the legislature as ultimately only it has the power to tax – is just going to have to buck up and show some stones by boosting motor vehicle fuel taxes as well as perhaps also tweak motor vehicle registration fees and motor vehicle excise taxes a bit.

    That and also begin the effort to figure out what to do in the future if and as the nature of fueling motor vehicles changes and as most everyone is convinced is coming down the road.

    That and concurrently ratcheting down on all manner of less than well-managed and fiduciarily-prudent government operations.

    • Beeker

      otherwise fund needed vehicular transportation MAINTENANCE efforts going forward, much less build new infrastructure.

      First of all, the state has taken on responsibility maintaining roads that are normally done by locals (counties) in other states in addition to the state highway and bridges hence why spending on repairs have outstrip the revenue. Baker’s CIP FY2017-FY2021 reflects that priority which is why 90% of the funding goes to SGR (state of good repair) at the expense of modernization. What you don’t realize that many of the roads are functionally obsolete for today’s traffic and in many areas of the state the roads have not been up to date in 40 years. It is a travesty that the legislature decided not to follow the 2007 commission recommendations knowing full well the members of the Republican legislature and groups intend to undermine it by pushing “legislating by ballot” because they don’t know how to articulate how to pay for these things except to lower taxes. Many of the initiatives was done this way. This is why the legislature agreed to the .03 cent tax which funds the Rail Enhancement Fund- revenue cars for the RL, OL and GLX that is expected to take delivery in 2019.

      While I agree about the millionaire’s tax which the legislature would not be providing new money for these initiatives simply by rearranging the deck in its current funding. One of the problem points to Speaker DeLeo, he thinks he runs the state instead of being co leaders of the three branches of the government.

      The gas tax may be the easiest way to get the revenue needed but at some point they won’t provide more money because of the changes in way we drive and many of auto manufacturers are now pushing to have hybrid EV in the roadway come 2020 and beyond.

      • QuincyQuarry.com

        I have no clue what time frame you are using, but State Chapter 90 money to local municipalities for road maintenance has been trending DOWNWARD, net of duly adjusting for inflation.

        Are you perhaps also including bond-funded state transportation for local projects?

        Next, and with all due respect, you are beyond merely presumptuous in stating that I don’t realize “… that many of the roads are functionally obsolete for today’s traffic and
        in many areas of the state the roads have not been up to date in 40
        years.” Granted, I have only lived in MA for 20 years; even so, such is more than long enough to know that MA roads suck.

        Even so, say what you may, but Beacon Hill did fund – in fact, it more than funded – the 2007 Transportation Finance Commission’s ask. Output for the money spent, however, does not appear to have come anywhere close to meeting the TFC’s benefit/cost projections.

        And on a related note, that Beacon Hill ran up the state’s debt burden instead of going with a simple fuel tax increase at a time when oil was cheap is whole other matter for another thread.

        At the same time, it is only fair to note that fuel prices are again at historically lows on an inflation adjusted basis.

        And as for legislating by ballot, I grew up in California and can speak at length as to abuses perpetrated via voter initiatives, but such are the rules as well as adverse votes are typically the result of bad policies, legislation and/or other shortcomings inflicted by state government officials.

        Case in point, I initially liked the idea of an inflation-indexed fuel tax – in fact, I personally encouraged it to then Governor Patrick; however, enough of the electorate disagree. Such is the way of politics.

        That and how the General Court is far more focused on legerdemain than showing a spine.

        And as for Speaker DeLeo, what Massachusetts Speaker of the House hasn’t thought he was King – at least until he was indicted, tried and then sentenced to prison.

        Finally, I clearly noted that the governor’s proposed commission should both figure out a near term funding plan as well as work on developing a longer term one as vehicle use and their fuel usage change in the coming years as are anticipated.

        • Beeker

          but State Chapter 90 money to local municipalities for road maintenance has been trending DOWNWARD, net of duly adjusting for inflation

          While it is correct, you should realize in many communities where numbered routes is considered state responsibility. Take Rte.53, it is considered state responsibility not local nor county and yet many people work and live along the route. I have talked to DPW administrators and they have complained to the point that they had to write a letter to area’s representative to get the state to fix the potholes instead of the DOT Secretary as it would normally be the case and I had my share of calling to district 5 to get them to do something that he would hang up on me after stating that it was town responsibility which the DPW head stated otherwise.
          I used to live in Jacksonville, FL the county spent $2.09B in fifteen years to modernize the roads while the state redeployed their resources in other projects within the county including the replacing the Fuller Warren bridge. At this point, you can go point A to B to get somewhere faster than it was done previously and it was all within the master plan the City (county) put out. Yet here, I see many towns reacting to things rather planning it for the future.

          I supported the inflation index but as the article stated the Republican legislators put on the ballot to strip it with the idea of punishing someone wanting to raise taxes for political reason rather practical.

          What you should know is that Chapter 90 is doled out on the basis of mileage within the individual towns for their own roads. The towns are interested in what they get at the expense of the next town even though they are within the same county.

          • QuincyQuarry.com

            Help me out. I noted that Chapter 90 funding to municipalities has been declining as well as that MA roads suck.

            You then go off on how the state is not keeping pace on the upkeep of state routes. Isn’t this ultimately at the core of problem, meaning that even given that the state did fully fund – and then some – the 2007 TFC ask but that the end product fell short of what was promised?

            Oh, and as for Chapter 90 money, let’s not forget that some local officials tend to play favorites as to where this and other local road moneys are spent.

            For example, redoing two blocks of perfectly sound streets and concrete sidewalks, along with replacing underground utilities, was wrapped up last fall and surely but by coincidence my mayor lives on one of these blocks.

          • Beeker

            I noted about the Chapter 90 funding is in the fourth paragraph and noting that it is correct in the first paragraph that the funding has gone down. It is in the content of everything been going on for a long time which I state the state has taken on too much responsibility for maintaining the highway including local ones. Let me give you a good example, in FY2014 and FY2016 the state “supposedly” replaced the bridge on Rte. 28(as noted by the DOT report) but left the sidewalk and barrier crumbling when they really “refurbished” the bridge. There is two different things when you actually see it versus what the report state is the crux of the problem.

            The state fully fund by borrowing against future revenues to pay for it as I have read the MTF’s reports and other reports over the last few years.

            Give it a few years in 2020.. Stay tune…

          • QuincyQuarry.com

            I see no differences of substance. And yes, borrowing without also sufficiently taxing has put the state in a bind. As for the ”supposedly” redone work, such is part of the problem: crappy standards (and performance metrics). At this point, we can only hope that Baker will press for a real funding plan – meaning basically a fuel tax increase now and something new for not all tha far down the road given vehicle use and vehicle fuel changes – and without a VMT as such will surely result in another voter initiative rebellion at the polls.

          • Beeker

            Given Baker’s opposition to taxes, I don’t see that happening. I’ll wait and see..

          • QuincyQuarry.com

            Building the necessary level of consensus to do the inevitable or suffer the consequences of not doing so takes time.

            Such also includes developing a compelling plan, especially as the state budget is currently stuck in a structural deficit that is only likely to become worse before it might become better.

          • Beeker

            Like I said, I’ll wait and see. If Baker does exactly what I think he will do, I’ll say I told you so.

          • QuincyQuarry.com

            How is it bad thing that Baker has largely done what he said he would do and/or was expected to do even if we are not used to same from an elected official?

            And where is there a basis for I told you so from you for me?

            I noted that Baker is insisting on a deliberate process, developing sound metrics and a fiduciarily responsible funding plan. With state budgets mired in structural deficit status as well as for likely years to come as health care cost increases are sucking up every available pfennig, there is only so much maneuvering room near term – as in essentially slim to none – and Baker will likely thus only agree to a fuel tax increase (or some TBD Plan B) AFTER the 2018 election AND given clear guarantees by the legislature as to where any such tax increase funds can only be spent.

            If, however, the economy catches a cold any time in the next few years, all bets are off following an only to be expected declaration of force majeure.

          • Beeker

            It sounds like you are Baker supporter. I take a hard nose look at both the executive and legislature branches. This is the last of the response.

          • QuincyQuarry.com

            Compared to Martha Coakley or – say – Setti Warren, the choice is clear.

            That and in this particular instance Baker is doing everything he can to develop a sound action plan so that he can then endeavor to work with the legislature to figure out how pay for it all as well as all address all of the other pressing problems with state revenue vis-a-vis spending. After all, the state budget is mired in structural deficit status as well as the state’s bond rating was somewhat recently downgraded.

            If, however, you view this as no way to do things, feel free to offer up your proposal.

          • Beeker

            Coakley was nobody choice back in 2014 . The three, Gonzalez, Warren, and Massi who are running this election cycle are not going to win.
            You keep regurgitating the same talking points over and over something I already know….
            I will… when Baker is termed out if he is reelected. Stay tune in 2020.

          • QuincyQuarry.com

            Martha Coakley was the Democratic party’s choice in 2014, so at least one
            party boss choose her.

            We could do worse than Baker – a lot worse if one looks to his early
            contenders.

            Next, there is no gubernatorial term limit in MA.
            See https://ballotpedia.org/Governor_of_Massachusetts

            That and Baker’s likely second term will run through 2022, not merely 2020.

            And finally, at least my talking points are valid even if you do find them boring. Do you prefer instead – for example – flaming Trump tweets or perhaps more storytellings by Senator Warren while at the same time she hides from the press?

          • Beeker

            So far, he’s been doing things exactly what I expect him to do over the last 3 years.

  • Beeker

    The only reason Baker is pushing for the Commission is that he knows that something needs to be done money wise but is sticking with the no tax increase pledge he originally signed when he ran in 2010 but lost.

  • Mhmjjj2012

    Speaking of the MBTA, today’s Boston Herald’s article, “Baker defends T’s contractor despite theft arrests,” is about two subcontractors for Mancon Inc. charged with stealing copper wires, cables and other materials from the T’s warehouse. So the MBTA has a contractor running the warehouse and the contractor subcontracts work out to individuals? I’d like to know what that’s all about. The story goes on to say “under Mancon, service has also improved…orders that, on average, took 68 hours to be delivered when the T ran its warehouse have now been slashed to 10 hours.” Did everything take 68 hours to get delivered? Was it materials that needed to be ordered from suppliers that took that long? Were the warehouse employees the problem? Was it the systems in place? Was is due to poor management? Anyhow, the MBTA wasn’t capable of fixing it’s own warehouse operations so it outsourced them, the extent of the theft done by those hired by the private company is “unclear,” and I’m left wondering if those employed by the private company to run the warehouse have workers comp.

  • downtown21

    This seems two-faced and disingenuous coming from the man who spent all those years deliberately making any discussion of raising tax revenue completely toxic.