Rich Davey’s attempt at recreating the magic of Steve Jobs missed the mark in presenting the policy reasons for lots more transportation spending. At the release of the new transportation plan, his Jobs-like headset masked just how over-miked and overstated were the opportunities within our reach if we just put more fuel in the transportation accounts, as well as the too-good-to-be-true “multiplier” effects that will come with the new government spending.
No, there was no discussion of the negative (even regressive) nature of much of what is being proposed. Payroll tax increases, no worry. Gas and green taxes, no problem. Then, of course, all of the projects cited – every last one of them – is a “need.”
There was lots of art in the presentation, but little science in the new transportation proposal from the executive branch.
Before getting into the details, let’s frame the discussion. First and foremost, let’s be clear that we do need new revenue for transportation and infrastructure. Pioneer has said this since 2007 when we made the case for thinking hard about infrastructure needs with numerous reports, including Our Legacy of Neglect, Beyond the Gas Tax, Getting There and other reports.
We do want to see a full reform effort concluded first. Some reforms have come – but nothing close to the $6.5 billion promised by legislators at the time of the 2009 Transportation Reform law. Still, recognizing that those were overblown estimates of cost savings, with a few more steps, we recognize that it is time to start thinking about funding. The questions are how much, how to realize the new revenues and where to spend them. Those are important and thorny questions – and questions that the Transportation Plan has completely sidestepped. Here’s how I look at those issues in reverse order:
(1) We still lack all kinds of transparency (and also a few other reforms) promised in the 2009 Transportation reform Act. MassDOT has a puzzling reluctance to providing real public transparency on performance – even though, after the Big Dig, transparency has to be the cornerstone for any new revenue. A possible bad outcome of not providing accountability to the public on old AND new revenues is that we will no longer be able to go to the public for additional investments if they are needed.
Pioneer developed the basis for a strong accountability system, and the staff at MassDOT has a worked on a scorecard of transportation measures. They have presented the scorecard at hearings (it’s not visually attractive…), but to date nothing, to my knowledge, has been released to the public outside of these hearings.
(2) Stop calling the same old projects transportation needs. When I heard and read the comments of proponents of more transportation funding during the past months talking about “strategic investments” even as they talked about the South Coast Rail Link and the Red/Blue Line Connector projects, I got a sense of what was to come. To stick with the theme of transparency for a moment, there has to be greater transparency about how the money will be used for old and new projects, and we need clarity about how decisions will be made on any new projects (they must be focused on high-ridership projects and ones that clearly deal with key issues like congestion).
(3) We must continue to emphasize maintenance. The Governor’s team deserves praise for delivery of the 14 bridges north of Medford. But there is much more maintenance work to be done. Still more than 10 percent of bridges last I looked are deficient. That’s right around the national average, but we can do better. The MBTA certainly needs help (though, not a free ride) with signalization, track work and new cars. Our view is that an 90-10 split in favor of maintenance and repair projects and in disfavor of new projects must stay in place until we hit key performance metrics such as bringing the percentage of deficient bridges down to half the current level, until road quality improves, congestion metrics are hit and the MBTA reaches a state of good repair.
(4) We must review the level of transportation-related employees being paid out of the capital accounts and ensure that not only are they reduced now, but as new revenues are put into capital projects, the number of employees paid through those accounts does not rise.
On how to raise new revenues, let me comment on each of the proposals by the MassDOT:
(1) A new payroll tax. There are few job-killing ideas as murderous as a payroll tax. Bad in reality, bad as a precedent. Drop it.
(2) An increase in motor fuel taxes. I am perhaps one of the few human beings on the face of the earth who still considers the gas tax one of the best ways to raise revenues (that’s saying a lot because it is not something I am fond of…). The negatives of the gas tax are that it disproportionately affects the working class (with older cars, vans and pickup trucks) and especially those that don’t live in the relatively affluent inside 128 and 495 belts and therefore tend to drive longer distances. The benefit is that, unlike taxes on vehicles miles traveled, etc., it is an incentive to purchase fuel efficient vehicles.
(3) An increase in the state sales tax. We’ve seen that movie before and it did not help a lot of retailers in the state.
(4) An increase in the income tax. Are we seriously thinking about raising the income tax? In a recession, really? Who wrote this report anyway?
(5) A new “green” fee. Funny how the adjectival use of “green” is used by retailers and the government to package up and put a smiley face on price increases. Again, such a fee disproportionately affects less affluent drivers who own older cars. It’s another form of a gas tax but it has nothing at all to do with how much you use the car. Again, the gas tax is far preferable to this.
(6) A vehicle miles traveled tax. In theory this is a “user” fee and therefore better than the gas tax or green fee, but it removes the price incentive to buy more fuel efficient cars. I prefer the gas tax.
(7) Routine, Regular Increases in Fees, Fares and Tolls. Lots of stuff is stuffed in this category (RMV fee increases, etc.) but the one that makes sense is to have modest fare increases for the MBTA on the order of 5% every couple of years.
(8) New Tolling Mechanisms. Revenues are achievable through the use of HOT lanes, congestion pricing on new projects as well as on major highways (I-93 would require federal approval).
All “tolled,” I would suggest $180 million from a 6-cent increase in the gas tax (to 27 cents a gallon), modest fare increases for the MBTA to provide another $15 million a year (on average), and revenues through new tolling mechanisms. In 2017, the state should either start getting rid of the tolls on I-90 or distribute tolling more widely across the system to include I-93. It’s good when the state actually keeps its word. If the state got rid of the tolls as it said it would, I’d support another 5-cent increase in the gas tax to more than make up for the lost revenue.
That tells you where my head is on how much is needed. The $1.02 billion annual number is hyperinflated. The inclusion of over $40 million a year for bike and pedestrian projects, twice the amount needed for Chapter 90 local projects, and the inclusion of the South Coast Rail Link and the Inland Route (Boston to Springfield) as “needs” tells you a lot about how bloated this plan is. Flush with cash, perhaps the Springfield line would be a kind of cool idea to think about, together with lots of other cool gizmos. But raise taxes when so much of the state still has high unemployment to build these projects? And the South Coast Rail Link always makes me wonder: If you plunked $2 billion on the desk of the Mayor of New Bedford, would he really ask first and foremost for a rail link to Boston? I really can’t believe he would.
Finally, the offer of $3.1 billion in state funding to the MBTA is off the charts. Reality check: That’s a lot of money to give to an agency whose current level of efficiency is at least questionable. The funding should come not in 10-year horizons but in chunks and only on the basis of delivery of promises.
Yes, yes, the report tells us all about the incredible, supercalifragilistic multiplier effects of government spending on transportation. But not once does it recognize that raising taxes has the reverse effect on the economy.
I understand the need to raise infrastructure funding given the right focus and the right accountability for delivery of reasonable projects – especially to keep our roads safe and to reduce congestion.
But this plan smacks of highway robbery.