Massachusetts governors file borrowing bills every few years outlining spending priorities on large-scale issues such as housing and the environment, but with several sections aimed at new revenues and policy changes, Gov. Charlie Baker's $18 billion transportation bond bill is, in the words of a committee chair, "more than a typical" version.
The bill (H 4002) would authorize a range of projects to receive funding over roughly the next five years, including a total of $5.7 billion on the MBTA. It also calls for reforms to contract and procurement practices to speed up projects, aims at reducing congestion through local programs and tax credits, and outlines a new revenue source that could direct tens or hundreds of millions of dollars every year to public transit.
"In some ways, we have enviable problems: our economy is growing, our population is growing, and the economic activity that dominates our commonwealth is constrained by the limits of our current system," Baker said at a Tuesday committee hearing, adding that the bill will "allow us to create the transportation infrastructure we need to continue to grow and serve our people."
The Transportation Committee hearing, which came about two and a half months after Baker unveiled the bill, underscored tensions between lawmakers and the administration over how to pay for investments in public transit and roadway repairs.
Baker told the committee that funding is "the easiest of the critical paths we face" and that the bigger issue is completing projects, but as the House prepares this fall to debate additional revenue options, committee chairs disagreed.
Rep. William Straus and Sen. Joseph Boncore, the committee's two chairs, told reporters after the hearing that they believe the state needs to bring in new money to pay for its wide-ranging infrastructure needs.
"This committee has an awesome responsibility to not do what previous governors and Legislatures have done in ensuring we're just borrowing against our future," Boncore said. "Our responsibility is to ensure we have the revenue to pay for that. It's an issue that our concern is this bond bill doesn't address adequately."
The one major revenue proposal in the bond bill — which traditionally has been a vehicle for borrowing and not for new taxes or fees — comes from the still-in-development Transportation Climate Initiative, a multi-state partnership to impose a cap on motor fuel emissions set to begin in 2022.
Under Baker's bond bill, half of the revenue Massachusetts collects from that effort would be earmarked for public transportation.
There is no clear indication yet of how much more drivers will pay at the pump, though Baker said Tuesday they will face higher prices once TCI goes into effect, and the emissions caps will be proposed in December. The revenue potential remains unclear, too, with previous Baker administration estimates ranging from $150 million to $500 million.
Lawmakers are cautious about what they can expect, and Straus told reporters after the hearing he believes 100 percent of revenue generated from the transportation initiative should go to transportation needs, not the 50 percent Baker suggested.
Another wrinkle with the TCI plan is that, as several lawmakers and speakers pointed out, the amount of money brought in would likely decrease over the years if the program succeeds — if fossil fuel use decreases as is the goal, so, too, would revenue from a fossil fuel cap.
Straus, who after the hearing declined to offer details about how the House's revenue debate might unfold, asked Baker if he had a suggestion for "replacement revenue" if money from TCI dwindles.
"Do you mind if I do a little bit of modeling on that one and get back to you?" Baker told Straus.
Transportation Secretary Stephanie Pollack said the state needs additional forms of capital funding, and the bill calls for additional use of grant anticipation notes. But on the operating end, where the MBTA faces a $53 million mid-year deficit that's about $16 million higher than projected after years of running structural deficits, she does not see a need for new revenue.
Pollack said in December 2015 that the T was projected to run a $427 million operating deficit in fiscal year 2020, but after reforms by the Fiscal and Management Control Board, the mid-year estimate is now $53 million. That amount, she said, "is well within the size of deficit problems that have come and gone over the last four years and have been handled within the T's existing operating sources."
Baker's bill drew opposition from the Massachusetts Fiscal Alliance, which claimed that there was not enough focus on "how we spend the money" and addressing the state bureaucracy.
The bond bill, which is the first filed for transportation since former Gov. Deval Patrick signed a $14 billion version five years ago, would authorize a range of projects to receive funding.
About $10.3 billion included would go toward roads and bridges, according to a Massachusetts Taxpayer Foundation analysis, including a $1.25 billion reauthorization for a "next-generation" bridge maintenance fund.
The MBTA would receive about $5.7 billion, according to the MTF, with several already-under-construction projects such as the Green Line Extension and South Coast Rail included.
Baker's bill also includes $250 million that could go toward a large-scale reimagining of the commuter rail system. A commission is studying several substantial options, including increasing service to every 15 or 30 minutes or electrifying the system, and while it remains unclear which option they will select, the MBTA's oversight board will take up the topic in the coming months.
Pollack said the money would start the process of investing in one of those plans with procurement and early design work. She stressed, though, that a public-private partnership — which the bill aims to promote by abolishing an existing commission overseeing the process and shifting the duties to the MassDOT and MBTA boards — will be necessary for any of the potential multibillion-dollar projects.
Announced two weeks before the administration published a study of roadway congestion, the bill includes several components aimed at reducing traffic. One suggestion is a $50 million local bottleneck fund, which would pay for infrastructure improvements on locally owned roads where specific choke points slow cars down.
"There are a number of places around Massachusetts, not just in Boston but in other parts of the commonwealth, where by doing some relatively modest work on some of the worst bottlenecks we have, we've actually been able to free up traffic," Baker said.
The bill would create a $50 million new tax credit program, offering employers $2,000 per employee permitted to work from home. Baker said Massachusetts and the Boston area lag behind similar areas in telecommuting rates, and by getting cars off the road, he hopes to see a reduction in congestion.
However, several transportation advocacy groups criticized the idea during Tuesday's hearing.
"This investment could be better spent improving our transportation system," said Chris Dempsey, director of Transportation for Massachusetts. "The credit as proposed would provide a higher per trip subsidy than is provided to the MBTA."
