Business group says Mass. transportation needs independent review
Grant Welker
A commuter rail train pulls into Worcester's Union Station.
The state needs a new blueprint to address its transportation infrastructure, which faces new threats and remains in problematic condition despite major investments in recent years, according to a business-backed foundation that is recommending a new independent review.
"What is clear is that the state lacks the requisite information to make profoundly difficult choices," the Massachusetts Taxpayers Foundation concluded in its report. "Questions such as which projects to fund and when, and how revenue sources should be allocated must be included as part of a long-term sustainable transportation finance plan to address our transportation needs. Unfortunately, the state has not yet adopted such a plan."
Referring back to the 2007 findings of a high-level Transportation Finance Commission (TFC), the foundation, which represents the state's largest employers, concluded the challenges facing Massachusetts are "broader and more intractable than imagined by the TFC, and cannot be resolved by additional funds alone."
For instance, about $2.2 billion in state taxes and fees are at risk due to the evolution of ride-for-hire companies and electric vehicles. Two ballot questions that could be settled in 2018 - a sales tax reduction and an income surtax on high earners - may force a major restructuring of state finances. And climate change is adding substantially to the costs of infrastructure maintenance and preservation, although its exact impacts are unknown.
Beyond fiscal questions, the report identifies other challenges facing the Baker administration and Democrat-controlled Legislature including "an incomplete inventory of assets and their conditions, inconsistent project management and/or inefficient spending, and a lack of metrics to monitor progress."
The independent review of financing and capital needs should account for revenue risks, asset conditions, project prioritization, and changes in climate and technology. "While the scope of the work is a tall order for any single commission, the state must undertake such a robust planning process. Failure to do so will lead to an inadequate transportation system and a weaker economy in the Commonwealth," the foundation concluded in its report.
The report also offers a fresh look at the MBTA, an agency Gov. Charlie Baker has been trying to turn around both internally and in terms of service.
The state tried to address major budgetary shortcomings at the T by reducing benefit cost growth, making pension system changes, and enabling the MBTA to more freely pursue privatization, but lawmakers did not restore management rights at the T, as recommended by the commission, and expenses at the agency have grown faster than revenues, according to the report.
"Unable to wring sufficient savings from operations, the MBTA reduced capital spending and postponed principal payments on its debt that pushed hundreds of millions in debt obligations to the future," the report said. "When these measures fell short, the state provided $2.1 billion in aid for operating budgets for fiscal years 2010 through 2018. This action perpetuated a problem ... and diverted resources that otherwise could have gone to capital investments."
After the TFC raised concerns about unsustainable debt at the T, MBTA debt service costs have since fallen from 27 percent of total expenses in fiscal 2007 to 22 percent in fiscal 2017, while the total T budget has grown from $1.3 billion to $2 billion in part because the state has increased its own debt by $6.6 billion to $25 billion "without raising sufficient revenues to cover the additional debt service."
"The TFC raised concerns about the MBTA's crushing debt burden," the MTF report said. "A decade later, the debt picture has reversed with the state facing constraints ... While the MBTA has the capacity to borrow more, the state is nearing its statutory debt limit. The debt limit and slow revenue growth impede the state's ability to ramp up capital investments for transportation infrastructure, particularly when other capital needs are extensive."
The report also concluded a 2013 transportation finance law "fell well short" of its $800 million annual objective with the state's funding woes exacerbated by the increased debt it has taken on over the past decade, slow tax revenue growth, and the need to begin repaying debts already incurred in anticipation of receiving federal funds.
The report also features some sobering passages on climate change.
"The Northeast has experienced the greatest U.S. increase in heavy precipitation events over the past five decades and the trend is quickening. The number of days with precipitation exceeding two inches is expected to increase from 37 to 46 percent in the Northeast by mid-century. Massachusetts' existing storm water and transportation infrastructure is not designed to withstand these higher volumes," the report said. "Investments in storm water retention and repair of flood-damaged roads, culverts and other transportation infrastructure will be required to prevent harm to people and property."
New England states are expected to experience the impacts of climate change earlier than other regions, according to the report, with research showing that average temperatures in the Northeast could rise by 2 degrees Celsius by 2030 while Boston and neighboring communities are expected to experience a 25 percent higher rise in sea level than other areas around the world.
Noting a rise of up to 7 feet projected by the end of the century would flood 30 percent of Boston twice daily at high tide, the report warns of "severe" impacts on transportation infrastructure, with pavement softened by high temperatures more susceptible to rutting and potholes, rail tracks expanding and buckling in the heat, culverts and roads washed out by heavy rains, and subway tunnels inundated by rising sea levels and storm surges.
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