Straus: Transportation revenue debate starting now

THE LONG-AWAITED legislative debate over how to fund improvements to the state’s beleaguered transportation system will kick off Tuesday, according to one of the key players.

Gov. Charlie Baker himself will appear before the Transportation Committee to pitch lawmakers on his five-year, $18 billion bond bill financing transportation construction projects. Questions over how the governor proposes to pay for all the borrowing and spending envisioned by the bill should lead naturally into the revenue discussion that House Speaker Robert DeLeo has anticipated for months, according to Rep. William Straus, a Mattapoisett Democrat and the House chairman of the Transportation Committee.

“This bond bill really becomes the start of the public and legislative debate on revenue because bond bills have to ultimately have money behind them,” Straus said in a phone interview. “We owe it to the public to talk about how we’re going to get the money for the projects the public knows that we need.”

The last time state lawmakers took up a big transportation revenue bill was in 2013 when they raised the gas tax by 3 cents per gallon and hiked tobacco taxes by $1 per pack of cigarettes.  A year earlier, the MBTA had jacked up fares by 23 percent. That transportation revenue bill became law over a veto by Deval Patrick, who was then governor and didn’t think the bill went far enough.

This time the dynamic is reversed, as the Democrats who control the House and Senate sound more enthusiastic about raising transportation taxes and fees than the governor, a Republican.

Baker has devoted time and attention to the state’s transportation woes, and during his tenure the T has for the first time expended $1 billion per year on capital improvements. The governor is plotting new road configurations to mitigate traffic and accelerating repair work at the MBTA to fix the creaking transit system. But Baker is cautious about the idea of raising taxes, and has mostly avoided backing broad-based tax increases.

Straus said the governor’s $18 billion bond bill includes $6 to $7 billion in financing via grant anticipation notes, or GANs, a financial arrangement where borrowing is secured against future federal funding. That type of borrowing was used to pay for some of the Big Dig, the notoriously expensive highway tunnel project through downtown Boston. But the amount of GANs proposed in the governor’s bond bill far exceeds what was used for the Big Dig, according to Straus.

“Is this an alternative to not raising new revenue?” Straus asked. “That’s the key question. If this is how we’re going to pay for transportation – by just borrowing against our future revenue – is that really a smart thing to do?”

The governor also hopes to raise revenue for public transit improvements through the Transportation Climate Initiative, or TCI, a multistate effort underway on the East Coast that would add a price to the carbon emitted by motor fuels to fund greener mobility alternatives.

“The problem is we don’t have a TCI program yet, and the administration has yet to say how many cents on a gallon of gas they want to add as a fee,” said Straus.

Straus said the TCI program is similar to a gas tax, but is not as straightforward or as easy to implement as a hike in the actual gas tax. With TCI, Straus said, “All states raise their gas tax the same amount at the same time and agree not to call it a gas tax, but I think the public is smarter than that.” 

Under the state constitution, bills raising taxes must originate in the House before going to the Senate for amendment, and DeLeo has tapped Straus, House Ways and Means Chairman Aaron Michlewitz, and Rep. Mark Cusack, the House chairman of the Revenue Committee, to work on the issue.

Straus would not say whether Michlewitz and Cusack share his views, nor would he say how much more money he thinks a new transportation revenue source should raise annually, but he said the scale of the needs is significant, and he strongly favors using a mechanism such as a gas-tax hike that would be relatively easy to implement and would create thematic consistency.

“The kinds of revenue options that are related to transportation itself are the ones that are easiest to explain and justify to the public,” Straus said. “The gas tax has the virtue of being explicit, clear, and placed into the Transportation Trust Fund, which under the state constitution can only be spent on transportation.”

It is an “open question” whether the bond bill itself would be the legislative vehicle to boost transportation revenues, or whether another piece of legislation would be used for that purpose, according to Straus.

Bond bills focus on capital improvements, and concrete and steel structures are a big component of the state’s transportation system. But the MBTA and the regional transportation authorities also have significant operating costs, and Transportation Secretary Stephanie Pollack wants to take a more active role in managing the highway network to reduce congestion – an initiative that suggests a potential bulking up on the highway division’s operational side.

The transportation revenue debate has already been well underway in some corners, but the full debate in the Legislature has yet to begin. MBTA Fiscal and Management Control Board Chairman Joseph Aiello said the board would likely create a list of programmatic options for lawmakers to consider as they debate whether to raise revenue and how. Once the discussion begins in earnest, outside groups are likely to ramp up their advocacy for and against new taxes.