Pushing debt to the limit
Massachusetts is about to hit its debt ceiling, which will set off a whole new round of under-the-radar maneuvering on Beacon Hill.
Debt financing is a topic that is inscrutable to the average taxpayer. But all sorts of projects that send Bay Staters’ hearts aflutter are made possible by generating tons of state debt.
Like rail for starters. Five of the six projects that are pushing the Bay State up to its debt limit are MBTA projects: new Orange and Red Line cars; the long-delayed South Coast Rail line to Fall River and New Bedford; Fairmount Line improvements; South Station expansion plans; and the notorious Green Line Extension.The lone non-MBTA project is the Pioneer Valley Knowledge Corridor improvements linking Springfield and western Massachusetts towns to Vermont.
State lawmakers did not sidetrack the rail projects into a funding path that would have no impact on the debt ceiling the way they did with the $300 billion Accelerated Bridge Program. Patrick administration officials set up the structurally deficient bridge emergency repair program in a way to avoid $1 to $2 billion in inflation and deferred maintenance costs. The program was financed by borrowing against future federal highway funding and gas tax revenues. There are limits on how far special funding arrangements like that can go, so the Legislature pursued a different route for the rail projects.
Last session, state lawmakers failed to pass legislation to confront a pile of important issues, including solar energy policy, transgender rights, and the opioid crisis. Add the debt ceiling fix to the mix and Speaker Robert DeLeo may find himself wishing that he had joined forces with Senate President Stan Rosenberg to move along some of those other pieces of legislation to clear the air for what are certain to be some very difficult conversations.
They’ll have to proceed with caution since Wall Street is always watching. The Bay State continues to enjoy a strong position there. Moody’s assigned an Aaa rating to the bonds for the rail program but noted that “additional leverage or decline in the pledged revenues that materially weakens debt service coverage” could make the rating go down.
What Wall Street thinks doesn’t matter much to backers of individual transportation projects. Expect them to put on a full court press as legislative leaders ponder whether to raise the debt ceiling to accommodate big-ticket projects that grow more expensive with each passing month or to pare the list down to what the Bay State can afford in existing tax dollars. Because voters have made it very clear that they will not contribute any more than they already do.
A Globe editorial wades into the tension between the House and Senate that slowed the movement of legislation this year and sides with the Senate in its call for clear deadlines for moving bills through the committee process and allowing time for considered deliberation.
Thousands of auto and home insurance discounts may lapse in January unless the Legislature takes action on a bill to ease rules on how many customers must participate in the discount programs. (State House News)
State regulators, in an unusual move, rejected a rate request by Mapfre, the state’s largest commercial homeowner’s insurer, to charge customers a deductible of as much as $10,000 on ice-dam damage. (Boston Globe)
Senate President Stanley Rosenberg says his partner is free to run for an open Senate seat. (CommonWealth)
The Attorney General’s office ruled West Bridgewater selectmen violated the state’s Open Meeting Law by discussing employee competence in closed meetings and ordered the board to watch a training film on the statute. (The Enterprise)
Swampscott raises the age to purchase cigarettes in the town to 21. (Salem News)
Staff at a Roxbury elementary school are upset that a vehicle with profanities spraypainted on it was allowed to sit for days in front of the school before finally being towed away. (Boston Globe)
Gloucester signs on to the state’s “complete streets” program and will receive funding for street work. (Gloucester Times)
Boston City Hall’s internet service was “clogged up” in what officials say was more of a “nuisance attack” than full-fledged hack. (Boston Globe)
Revenue continues to fall at the Plainridge Park Casino, the state’s first foray into the casino world. (Boston Globe)
Congressional negotiators have reached agreement on a budget bill that includes lifting the 40-year ban on oil exports, extending a number of tax deductions, and implementing a two-year delay on a controversial pair of Obamacare taxes, the medical device tax and the tax on so-called “Cadillac” health plans. (U.S. News & World Report)
Los Angeles schools reopen today after being closed yesterday following an email threat that was determined to be bogus. (Time)
Governing examines how politicians across the country are getting into trouble using their campaign funds for personal expenses.
The debate within the debate — Sen. Marco Rubio vs Sen. Ted Cruz — took center stage in Las Vegas Tuesday at the final televised Republican forum. (National Review) To a man — and woman — the GOP contenders assailed Donald Trump’s plan to bar Muslims from entering the country based solely on their religion. (New York Times) Time says Trump’s challengers finally figured out a way to get under his skin.
Self-made billionaires in the United States give on average six times more to charity over their lifetime than your normal uberrich person worldwide. (Fortune)
UMass president Marty Meehan has handed out big pay raises to already high-salaried employees in his office and elsewhere in the system, despite the tough fiscal straits that prompted the university to raise student tuition rates. (Boston Herald)
State officials are considering a takeover of the Southbridge school system. (Telegram & Gazette)
Schools are increasingly foregoing homework for students during vacation to allow them a complete break from studies and more family and social time. (Patriot Ledger)
A Lowell Sun editorial says the victims of the Chelmsford school budget fiasco finally receive vindication.
Pharmaceutical companies are testing a new protocol in Egypt to provide an expensive miracle drug to cure hepatitis C at a fraction of the cost while placing tight restrictions to protect Western markets. (New York Times) CommonWealth examined the controversy over the $84,000 cost of the drug in the Fall 2014 issue.
The operator of the runaway MBTA train is likely to be fired, but his lawyer insists he did not tie a rope around the throttle to keep it in an open position. (Associated Press)
A Herald editorial says the T is leaving sorely needed revenue on the table with its ban on alcohol advertising on the system, a policy the paper says should be scrapped.
The MBTA Retirement Fund will have an outside consultant provide a review of its operations and finances. (Boston Herald)
Residents of Charlton near the Casella Waste Systems landfill in Southbridge say they aren’t getting any information about their contaminated wells. (Telegram & Gazette)
The National Oceanic and Atmospheric Administration announced $5 million in grants for studies in the Northeast on the impact of climate change on fisheries. (State House News)
CRIMINAL JUSTICE/COURTSPhilip Chism is found guilty of first-degree murder and rape in the death of his teacher, Colleen Ritzer. The jury in the case deliberated eight hours and rejected Chism’s insanity defense. (Salem News)
The number of executions in the country in 2015 fell to its lowest level in 25 years, with Texas accounting for nearly half of the deaths. (New York Times)