Entries by Greg Sullivan

Drop in MBTA Commuter Rail Ridership Continues

A recent Boston Globe column by Northeastern University Professor Joseph M. Giglio and our own Charlie Chieppo has drawn the ire of some transit advocates.  In it, Giglio and Chieppo argue that commuter rail trains that provide station-to-station service are poorly positioned to compete with shared, electric, self-driving cars, when they become dominant several decades from now. The advocates seem to have seized on the fact that the authors wrote that MBTA commuter rail ridership is down, and they assert that it has actually spiked in recent years.  But that claim seems to be based more on wishful thinking than fact. The official standard for ridership statistics is the National Transit Database (NTD), which contains data reported by transit agencies […]

Op-ed: Connecticut example argues against millionaires’ tax

This op-ed appeared in The Boston Business Journal on February 7, 2018 It all sounds so simple. Just slap a four-percentage-point surcharge on all annual income over $1 million and use the supposed $1.9 billion windfall to fund education and transportation. It sounds irresistible … until you look at the results just to our south in Connecticut, where the same policies have essentially been in place for years. Over the last quarter-century, Connecticut has endured a series of budget crises. To cover ballooning costs, the state enacted sharp tax hikes, including four income tax hikes in the last 14 years that caused the top rate to jump by 77 percent. In recent years, Connecticut has increasingly turned to high earners and large […]

Understanding the Downgrade

S&P Global Ratings (S&P) recently downgraded Commonwealth and certain other Massachusetts agency bond ratings one notch from AA+ to AA. The AA rating is still considered a high mark in terms of the investment grade of the bonds, meaning S&P believes the state will meet its debt obligations.  While it is fair to say that the downgrade is not a calamity, it is certainly a warning signal as to what could happen should the state continue practices that do not lead to long-term fiscal health.  It’s a reality check to which we should pay close attention. As shown in Figure 1, the state’s S&P rating on Massachusetts bonds is still well above 2001 levels and is now at the same […]

Op-ed: UMass leaders fail Boston campus

By Greg Sullivan Friday, April 14, 2017 The University of Massachusetts at Boston faces seemingly intractable financial difficulties, but it’s wrong to pin the blame on outgoing Chancellor Keith Motley. Many of the problems flow from decisions made by the UMass board of trustees’ and president’s offices. At the direction of the trustees, UMass Boston has grown its enrollment and expanded capital facilities at an historic rate over the past decade, despite projected declines in the number of Massachusetts high school graduates. A 2011 UMass Boston financial task force forecast that the campus would face a $58.5 million shortfall by fiscal 2015 unless new sources of revenue could be identified to pay for additional expenses related to expanded enrollment and new […]

Op-ed: Justification For 40% Legislative Leadership Raises Is Political Voodoo

When doing the people’s will is secondary to legislators’ self-interest, how strong is our democracy? The state Legislature is on the verge of overriding the Governor’s veto of legislation that includes sizable pay raises for state and legislative leaders. Their actions on this front will answer the democracy question. Since legislators can’t raise their base pay, the hikes are limited to leadership positions in the form of increased legislative stipends. Base pay increases are formulaic and tied to the state’s median household income. The Boston Globe reported on several questionable aspects of the bill. It contains an “emergency preamble,” which means the raises would take effect immediately. The legislation also includes pay hikes for the judiciary, which, due to a clause in the state Constitution, makes it challenging at best to reverse via initiative petition. And because committee chairs and other leadership positions have not yet been officially selected, legislators don’t need to worry about violating conflict of interest laws for voting on their own financial interests. […]

Outsourcing bus services is—by now—conventional wisdom

Outsourcing bus services is—by now—conventional wisdom As the Finance and Management Control Board (FMCB) considers further action to address its operating deficit, deferred maintenance backlog, and the demands from riders for higher quality performance, once again privatization of services has come center stage.  During the coming weeks, there will be ample debate on the merits of proposals to outsource ancillary services; there has also been greater focus on whether some core services of the Massachusetts Bay Transit Authority (MBTA) should be competitively bid to ensure higher quality service and lower costs. In situations when there is heated discussion due to the potential impact on the interests of labor, as evidenced by the hundreds of MBTA union members who attended a […]

Op-ed: Time for UMass system to implement needed fiscal reforms

As University of Massachusetts President Marty Meehan considers raising tuitions yet again, his institution is at a crossroads. On the one hand, the University of Massachusetts has many achievements of which to be proud. Under the leadership of Meehan and his predecessors over a quarter century, the average grade point average of entering UMass Amherst freshmen shot up from around 2.9 to 3.8. In just the last five years, the flagship Amherst campus rose more than 20 spots in U.S. News & World Report rankings. While impressive, the strategies that produced such advances have compromised the university’s financial health and its mission of serving Massachusetts students. Read the rest of this op-ed in the Worcester Telegram & Gazette, Salem News, […]

Inconsistencies in UMass’ Reporting of Deferred Maintenance

In assembling the data for Pioneer’s UMass at a Crossroads series, which covers the improving academic profile of UMass students, the strategy of recruiting more out-of-state and international students to generate additional revenue, and the fiscal implications of UMass’ ambitious capital expansion, Pioneer identified inconsistencies in UMass’ reporting of deferred maintenance. Below is a brief overview of the disparate deferred maintenance numbers UMass has provided over the last several years, accompanied by discussion of the implications of these inconsistencies. (Note: endnotes/citations can be found in the papers, available here.) Disparities in UMass’ reporting of deferred maintenance Deferred maintenance refers to the postponement of maintenance of capital assets that are in need of replacement or renewal. It includes delayed repairs on […]

The Real Source of UMass R&D Spending

UMass issued a report and a press release Tuesday citing a record level of research and development spending at UMass in fiscal year 2015. “Despite the tightening of the funding environment, the University of Massachusetts saw sponsored research increase by 4.3 percent during the past year, reaching a record $629 million, President Marty Meehan announced today.” What might not be immediately evident from the UMass announcement is that all of the 4.3 percent increase in UMass R&D spending in FY2015 was attributable to funding provided by the state and UMass itself, which amounted to an increase of $26.5 million, a 14 percent increase from 2014 to 2015.  Externally-funded research, from federal, business, nonprofit, other sources, actually declined by $670,000 from […]

How to Save the MBTA Over $100 Million a Year

The first step in reforming the MBTA has been taken by the Legislature and the Governor. It included the establishment of a Finance and Management Control Board focused on the Authority’s operations as well as the new power to contract out services over a limited period of time. The second step for the MBTA has to be addressing the issues of immediate and short-term concern such as transit safety and the maintenance, upgrade and repair of assets that will allow the MBTA to function throughout even a difficult winter. Even as the work is underway, in order to ensure that the MBTA can address operational finance issues and make further investments and progress in addressing its multi-billion maintenance backlog, the […]

Guest Opinion: Reinstate the SNAP work requirement

Massachusetts, once a national leader in welfare reform, needs to reinvigorate its commitment to helping recipients succeed in the workforce. A good first step would be for Governor Charlie Baker to instruct the Department of Transitional Assistance (DTA) to reinstate the work component of the Supplemental Nutrition Assistance Program (SNAP), formerly known as the food stamp program. Under federal rules, SNAP recipients between 18 and 50 without dependent children can get benefits for only three months within a three-year period if they do not work or participate in a workfare or employment and training program. With some exceptions, able-bodied adults between 16 and 60 must register for work, accept suitable employment, and take part in an employment and training program […]

Welcome News from the New Team at the MBTA: Getting Serious About Savings

The Boston Globe reports today that MBTA officials briefed MBTA union officials last week about their forthcoming plan to request information from outside companies on running about 30 of the T’s 170 current bus routes, representing approximately 17 percent of its total routes. This should be welcomed news to state taxpayers and local property taxpayers in the cities and towns of the MBTA district. MBTA employees unions have held a virtual monopoly on T bus operations and bus maintenance services since passage of legislation adopted in 1993 that effectively handcuffed T management from outsourcing these and other services.  The protectionist Pacheco Law was adopted five months after then-Governor William Weld proposed privatizing some of the MBTA’s bus operations and maintenance […]

Post-Olympic Real Estate Implications of the Boston 2024 Proposal

Two weeks ago, a series of documents published by a number of sources, including the Boston Business Journal, Boston Magazine and the New York Times, revealed development plans for the Boston Olympics that give the public greater information and raise new questions about the effort to bring Boston the 2024 Olympics. Of great interest to Pioneer, the “bid book” disclosed some of the post-Olympic real estate implications of bringing the games to Boston.  What it made clear to us is that there is much more to the proposal than the Olympics—it’s also about post-Olympics real estate development rights. The Boston 2024 Olympics plan includes an expansive post-Olympics private real estate development proposal for the Olympics site, facilitated by a combination […]

There Is Little Appeal to the Current Use of Binding Arbitration at the T

Eliminating final and binding arbitration at the MBTA is key part of Governor Baker’s reform proposal.  His bill does not call for ending collective bargaining and arbitration at the T, but instead for applying the same collective bargaining/arbitration law that applies to other public employee unions at state agencies and municipalities, including at police and fire departments. The Governor’s task force explained it this way: The MBTA has the only public union in the Commonwealth with binding arbitration settlements which are not subject to approval (i.e. by legislative, board, or municipality). The current collective bargaining process creates inefficiencies and has delayed recent legislative reforms.  Many existing labor contracts are automatically extended until a new agreement is reached (‘evergreen provisions’), exposing […]

Status Report on the Job Creation Impact of the Life Sciences Act of 2008

This is the second in a continuing series of status reports published by Pioneer Institute on the Massachusetts Life Sciences Act of 2008 (LSA). This report presents an analysis of job growth in the life sciences industry in Massachusetts and other states utilizing data from the Quarterly Census of Employment and Wages (QCEW) published by the U.S. Bureau of Labor Statistics (BLS). The data presented in this report are for the 69-month period (23 quarters) beginning with the first quarter of fiscal 2009, the effective date of the Massachusetts Life Sciences Act of 2008 (LSA), through the third quarter of fiscal 2014, the most recent quarter for which BLS data are available. The LSA (Chapter 130 of the Acts of […]

What if “The Ride” operated like the best big paratransit systems in the US?

OK, let’s cut straight to the answer.  If The Ride had operated as cost-efficiently as the ten most cost-efficient large-scale paratransit systems in FY2013, it would have saved between $48.2 million and $60.3 million in FY2013. If the MBTA can bring its costs per passenger trip going forward to the level of the average of the ten most cost efficient large scale paratransit systems in other U.S. cities, it will generate savings of $373 million between FY2016 and FY2021, the end of its current paratransit provider contract. Here’s the analysis to back up those claims. Pioneer Institute published a report yesterday concerning The Ride, the MBTA’s demand response paratransit service, comparing its cost per trip to that of other Massachusetts […]

Guess Who Runs the Best Paratransit System in the MBTA’s District? Hint: It’s Not the T

Pioneer Institute’s ongoing analysis of the MBTA’s operations, finances, and performance aims to inform the public debate about the true problems plaguing the T and the most effective ways to improve the commuter experience for Massachusetts’ 1.2 million public transit system riders. In recent weeks and months, Pioneer has published reports using Federal Transit Data to compare the MBTA to other, similar systems across the US. Recent reports found that: Contrary to accepted wisdom, the MBTA has not been cash starved relative to its national peers, whether in terms of its capital or operating budget. The MBTA has added more commuter rail miles than any other commuter rail system operating in the nation since 1991 The often-cited notions that the MBTA commuter […]

The MBTA’s Problem is Not Lack of Funding

Background Since the mid-1990s, Pioneer has participated in the public debate concerning ways to improve the operations and financial footing of the MBTA through reports, events, public testimony and participation on a state-appointed commission.  Our principal interests have been the Authority’s operations, finances, pension system and governance (leadership and accountability) model.  With the crisis this winter, the Institute has redoubled its efforts to provide insights on these topics.  As part of that work, we have examined various aspects of the MBTA’s funding picture, especially as many have responded to the crisis by simply calling for more funding from the state. Even as the Institute has called for debt relief for the MBTA, we believe it is important to underscore the […]

The Myth of the Underfunded MBTA

When the MBTA collapsed last month under the weight of snow and frigid temperatures, former General Manager Beverly Scott and countless others were quick to blame the problems on years of underinvestment in the system.  But a comparison to other large transit systems reveals that the MBTA is not underfunded.  In fact, as measured by both passenger miles traveled and vehicle revenue hours, the T received the most capital funding of any of the nation’s 10 largest transit systems between 1991 and 2013, the last year for which data are available. Previously, we demonstrated that MBTA commuter rail capital spending per 1,000 passenger miles traveled was the highest of any major American commuter rail system between 1991 and 2013.  This […]

Setting the Record Straight on MBTA Expansion

Pioneer has previously written that rapid expansion was a major cause of the MBTA’s recent meltdown.  More recently, we wrote that MBTA is the only American commuter rail system that lost ridership between 2003 and 2013. In a recent blog post, the Frontier Group questioned Pioneer’s assertion that the MBTA “has expanded more than any other major transit system in the country over the past 25 years.” This table, which is based on National Transportation Database data, demonstrates that, since 1991, the MBTA has added more than twice as many rail miles, counting commuter rail, subway, and trolley lines, than any of the other 28 other transit systems operating at that time. FIGURE 1:  Rail miles added by transit authority, 1991-2013 The […]

Why wasn’t the T funding snow storm preparation?

Canceled commuter trains are becoming the norm leading to continued paralysis of our city.  It is truly a hard thing to imagine—people standing on platforms for hours, often without information.  And this in sometimes frigid temperatures. How did we get here? Between 2003 and 2013, the MBTA was the only one of 18 commuter rail transit systems in the U.S. to suffer a net decline in annual passenger trips, a drop of 5,341,272 trips per year, representing a 13% loss in annual ridership, according to data reviewed by Pioneer Institute from the National Transit Database.  The following graph compares the MBTA commuter rail loss of annual passenger trips to the commuter rail transit systems with the biggest gains in trips […]

What Was Omitted from the Special Advisory Commission Report on Public Officials’ Pay

Data left out of the report of the Special Advisory Commission Regarding the Compensation of Public Officials [Click to download a Word version of this post.] On November 30, 2014, the Special Advisory Commission Regarding the Compensation of Public Officials published a study concerning the compensation of the state’s constitutional officers and members of the state legislature. In my view, the information presented in the report is insufficient to allow a meaningful comparison of legislative pay levels in Massachusetts with those of other states because it excludes from its analysis 39 states in total, including six states with populations greater than that of Massachusetts: Texas, Virginia, Georgia, North Carolina, Washington, and Arizona.  The report also excludes eight of the ten states […]

The MBTA’s $23 Million 11th-hour Sweetheart Deal with Gillette Stadium

$23 million 11th-hour sweetheart deal by the MBTA will stick taxpayers with a jaw-dropping $10 per one-way ride subsidy on a new full-service Gillette Stadium commuter rail line As the curtain falls on Governor Patrick’s administration, officials at MassDOT have been rushing furiously behind the scenes to pull off one of the most egregious and secretive taxpayer abuses in state history: the execution of a binding $23 million contract to purchase a CSX freight line to provide full-service daily commuter rail service to Gillette Stadium in Foxboro. If the new commuter rail service is provided, the financial benefit to the owners of Gillette Stadium and Patriot Place will be enormous. The MBTA has been offering additional train service for Patriots […]

The Health Connector Authority Protesting Too Much

In FY2011, the year prior to passage of the Affordable Care Act, the administrative budget of the Massachusetts Health Connector Authority was $29 million.  By FY2013, while the Connector Authority struggled to implement its change to ACA, its budget had risen to $55 million.  By FY2014, it had risen to $118 million.  In FY2015, its budget is $98 million.  These whopping annual increases in administrative expenditures have paid for converting to the new Affordable Care Act system. Pioneer Institute issued a report today adding up these and all other administrative costs of converting from our pre-ACA connector system, stating “there has been little transparency about the full taxpayer cost of the state-based exchange. Estimates often have been released piecemeal, and […]

6 Reasons Gov. Patrick Should Veto the Convention Center Expansion Bill

Pioneer Institute’s Research Director, Greg Sullivan, sent a letter today to Governor Patrick asking him to veto the Boston Convention & Exhibition Center expansion bill. He outlined six reasons why Governor Patrick should do so: The BCEC expansion will saddle the next administration with hundreds of millions of dollars in deficiencies as a result of Massachusetts Convention Center Authority’s overly optimistic revenue projections. The Massachusetts Convention Center Authority assumes that hotel tax receipts will increase over the next 30 years at an average annual rate nearly three times greater than the historical growth rate of the statewide hotel tax.  If its rosy projections are wrong, as they have been in the past, the legislation authorizes statewide taxes to be used […]

New Life Science Industry report: Mass. gained only 55 life science jobs between 2010 and 2012

Last week, Pioneer Institute issued a report calling for Massachusetts to adopt two enhanced research and development tax credits, pointing out that research and development expenditures by Massachusetts industries dropped by 19% between 2007 and 2011 while California’s increased by 16.9% and the rest of states by 9.2% on average.  We also pointed out that California, which offers R&D tax credits vastly superior to Massachusetts’, has outpaced the nation in R&D growth.  Over the past two decades, the growth of industrial R&D expenditures by California business was greater than that of its top seven competitor states combined, Massachusetts included. But the part of our report that generated the biggest controversy was the calculation that Massachusetts had added only 571 life […]

Biotech job creation estimates don’t add up

Pioneer today released a new report entitled “Regaining Massachusetts’ Edge in Research and Development.”  The report focuses on three important takeaways from the job creation and investment data as related to R&D-related companies: A broader tax credit strategy put into place in the early 1990s worked quite well in advancing Massachusetts’ R&D-related job base and expanding R&D investments in the Commonwealth Since then California has put into place a more cutting edge tax credit strategy that has helped the state become a category killer – truly the first among equals in the hunt for expansion of R&D-related sectors While Massachusetts’ life sciences initiative was much ballyhooed as having the potential to create 250,000 new jobs in a decade, after five […]

Open Letter to the Commissioners of the Massachusetts Gaming Commission

Gaming Commission’s Enhanced Ethics Code On October 24, 2013, Dierdre Roney, General Counsel of the State Ethics Commission, responded to a request for advice from Stephen Crosby, Chairman of the Massachusetts Gaming Commission, about whether Mr. Crosby should recuse himself from participating in matters concerning the awarding of a casino license in Everett Massachusetts.  Chairman Crosby had previously filed disclosures on August 22, 2013 and October 25, 2013 stating in relevant part that “[Paul Lohnes], a part owner of a property in Everett that would be purchased by a casino developer if that property is awarded a license” had “invested in my company about 30 years ago; that business relationship ended 23 years ago.” General Counsel Roney’s letter in response to Chairman […]

Gaming the Gaming Commission’s “Enhanced Code of Ethics”?

The Boston Globe published stories on November 21st and December 8th revealing that Steve Crosby, Chairman of the Gaming Commission, had a previous seven-year business partnership with Paul Lohnes, part-owner of a land parcel in Everett that is the proposed site of a casino in competition to win the sole casino license in Eastern Massachusetts. According to the Globe stories, Chairman Crosby and Mr. Lohnes have had a forty-year relationship and Mr. Lohnes had provided crucial investment money to Crosby’s company when it was struggling. According to the Globe stories, a partnership including Crosby’s former business partner purchased the Everett site in 2009 at a price of $8 million. Subsequently, according to the Globe stories, the property was put under […]