Proposed taxes unlikely to solve transportation crisis
The transportation reform debate has gone quiet since the hand-wringing over the wider fiscal crisis pushed state government’s most troubled sector out of the headlines. But expect "reform before revenue" to jump back into the news when Senate unveils its budget in the next week.
From a fiscal standpoint, there is an overwhelming need for two broad-based taxes, one to address the state’s operating budget shortfall and the other to address the transportation crisis. But proposing one tax during the worst economic crisis in recent memory is problematic enough for state lawmakers. Proposing a second could be political suicide.
The fiscal and the transportation problems “are so huge that they have overwhelmed the ability of state leaders to deal with them in meaningful ways,” Massachusetts Taxpayers Foundation’s Michael Widmer told me recently.
The House proposes to increase the sales tax to 6.25 percent and allocate a portion of new revenues, roughly equivalent to a gas tax increase of 10 cents, to transportation. That would do little for the MBTA, the Massachusetts Turnpike, or any other statewide transportation needs. Gov. Patrick supports a 19-cent gas tax increase and has threatened to veto a sales tax increase without a transportation reorganization and other reforms. But House leaders have the votes to override a veto.
It's not clear if the Senate will sign on to the House plan come or if a new gas tax proposal will ever see the light of day again. But there’s certainly no appetite for tax increases of the magnitude required to address both the fiscal and the transportation crises. That means some combination of turnpike toll increases, MBTA fare hikes, and service cuts is inevitable.But the more serious issue is the long-term viability of the MBTA. The turnpike authority may well disappear if reform before revenue becomes a reality. But the specter of MBTA bankruptcy is real. To forestall that development, Massachusetts would have to take on a significant portion of the $3.3 billion in debt that the state transferred to the T nearly a decade ago (still leaving it another $5.2 billion in other debt). A tough sell before the economic meltdown, T debt relief is DOA on Beacon Hill now.
That's what the Bay State gets from an agency that was “born broke,” as a new MBTA Advisory Board report detailing the familiar, sorry tale makes plain.