Entries by Greg Sullivan

Congress should fix aid, provide block grants

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This op-ed by Greg Sullivan and Charlie Chieppo appeared in the Boston Business Journal on March 27, 2020. While passage of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Actis surely good news, it will come nowhere near fully addressing the pandemic’s impact on the commonwealth’s finances. Large block grants would be the best way to provide states with much needed relief. Thanks to the virus, state revenue sources from sales taxes to pension fund receipts are plummeting. At the same time, expenses connected to the outbreak are rising sharply. Just look at unemployment insurance. Weekly state unemployment claims rose from 4,712to 147,995in just two weeks. And while the new stimulus bill will add $600 to each unemployment check for up to four months and […]

Accountability for casino revenue targets needs to be “in the cards”

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Co-authored by Andrew Mikula and Greg Sullivan Everett’s Encore Boston Harbor has entered its third quarter of business with two pieces of good news. First, there has been renewed interest in the construction of a footbridge connecting the Orange Line to the shimmering resort casino, a major step towards improving accessibility and reducing traffic congestion in the vicinity. Second, USA Today named Encore as one of the best casinos outside of Las Vegas.   But there is also some bad news. The most recent Massachusetts Gaming Commission revenue report indicates that state revenue from Encore Boston Harbor will fall far short of the $201 million that the casino owner projected for fiscal year 2020 when it was vying for a […]

The $8.5 Billion Marshall Plan for MBTA Needs

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Going from much larger capital budgets to delivering the actual projects needed to repair and modernize the MBTA will require a “Marshall Plan” that includes improving T hiring practices and internal organization, as well as the strategic use of external resources.

The MBTAs Capital Spending Crisis

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The Massachusetts Legislature must free the MBTA from overly restrictive procurement methods and the T must dramatically increase its project and contract management capacity if it is to reach aggressive capital spending targets aimed at upgrading the system and accommodating more riders.

Williams and Markopolos Were Proven Right: MBTARF Was Underreporting Its Unfunded Pension Liabilities Just as the Whistleblowers Said in Their 2015 Report

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In a new brief, Pioneer shows that whistleblowers’ 2015 claims that the MBTA Retirement Fund (MBTARF) has been underreporting its unfunded pension liabilities was correct. In their study, Boston University Professor Mark T. Williams and Bernie Madoff whistleblower Harry Markopo­los outlined three specific ways in which the T pension fund was misrepresenting its liability, by a total of $280 million. At the time, MBTARF vigorously refuted the validity of the findings, but a new Pioneer brief presents in-depth analysis vindicating Williams and Markopolos.

Drop in MBTA Commuter Rail Ridership Continues

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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 […]

What Ever Happened to Flagger Reform?

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The unusual way in which Massachusetts determines prevailing wages and the fact that civilian flaggers are subject to state prevailing wage law explain why a 2008 law that ended the Commonwealth’s status as the only state to require police at road construction projects has failed to generate substantial savings.

UMass Has a Spending Problem

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The University of Massachusetts claims admissions policies that favor out-of-state students over in-state residents are required as a result of insufficient state funding growth, but the data tell a different story.

Housing & Who’s a ‘Millionaire’ according to Proposition 80

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The tax hike on those with annual taxable incomes of $1 million or more that would result from a proposed amendment to the state constitution scheduled to appear on the Commonwealth’s November ballot would likely ensnare an ever-increasing number of taxpayers because the index used to adjust the million-dollar threshold has historically grown at a far slower rate than the taxable income of Massachusetts taxpayers and increases in state home values.

Op-ed: Connecticut example argues against millionaires’ tax

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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 […]

Back to Taxachusetts? Lessons from Connecticut

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This report urges proponents of a 2018 statewide ballot initiative that would add a surcharge on the state taxes of those earning over $1 million annually to look at the experience of Connecticut, where multiple rounds of tax hikes aimed at high earners triggered an exodus of large employers and high-earning individuals that resulted in declining tax revenue.

Back to Taxachusetts Series: Capital Gains

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This report shows that if Massachusetts voters approve Proposition 80, scheduled to appear on the statewide ballot next year, Massachusetts’ top capital gains tax rate would go from 30th highest in the nation to fourth and the commonwealth’s highest combined state and federal rate would move from 25th to second.

Is it time to expand water transportation in Greater Boston?

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A comprehensive study of the MBTA ferry service’s performance as a transit mode and how it compares to other ferry operators nationwide offers useful insights for policy discussion on future water transportation in Massachusetts Bay, according to a new study published by Pioneer Institute.

Understanding the Downgrade

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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 […]

The Bay State’s Public-Pension Complex: Costly and Unaccountable

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This report finds that Massachusetts’ 102 local systems (84 municipal, 12 regional and 6 “special” such as MHFA and Massport) have average per-member administrative costs that are at least triple those of the Massachusetts State Employees’ Retirement System (MSERS), with many that are far higher.

Op-ed: UMass leaders fail Boston campus

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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 […]

2015 MBTA Bus Maintenance Costs Were Nation’s Highest

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This report compares MBTA bus maintenance costs with those of five transit agencies identified as peers by the Integrated National Transit Database Analysis System. In 2015, the MBTA had the highest vehicle maintenance cost per hour of bus operation of the six transit agencies identified as peers by INTDAS.

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

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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. […]

Recommendation to the FMCB: Retain an Independent Auditor and Actuary to Review the MBTARF

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The present policy paper argues that FMCB must conduct an independent audit and actuarial valuation of the fund, because of specific failures and omissions even in the limited work that FTI did. In doing so, we find that in opposition to the claims of FTI, the claims of potential malfeasance and poor management by the MBTARF Board, which came from noted whistleblower Harry Markopolos and Boston University Professor Mark Williams, were likely accurate.