State Senator Bob Hedlund on Transportation Financing

 Bob HedlundA Broken System Financing a Broken System

By Senator Robert Hedlund

For the second time in just over two months I have led debate and voted against the latest misguided attempt at Transportation Financing in the Massachusetts Senate.

The first time was in a rare Saturday Senate session in mid-April, when it was apparent to me that many Legislators were not fully informed on the consequences of the bill. The Bill passed by a 30-5 margin. The second time was Thursday, less than 24 hours after the final bill was released from the Conference Committee. Again, the Bill easily passed the Senate, by a 34-6 margin.

Both times the Senate pushed through a variety of new taxes, totaling a half billion dollars, which will do nothing more than throw a short-term band-aid on the MBTA’s debt burdened and aging transportation infrastructure.

Despite the impact on taxpayers, the bill never received a public hearing.

The most odious example of the taxes in this bill is raising the 23.5-cent-a-gallon gas tax by 3 cents a gallon. As part of this increase, the Senate approved a provision that indexes annual gas tax increases to changes in the Consumer Price Index (CPI), a measure of inflation. This means every year the gas tax will likely automatically increase.

Elected legislators should vote and be accountable for any future tax increases. Passing a perpetual annual tax increase now allows legislators to avoid any accountability when these tax hikes go into effect.  If these legislators want to see the gas tax increase every year, then they should vote on it every year and be held accountable for those votes.

Over the last ten years, CPI has increased 28%. That would have meant an additional 28% increase in the gas tax over a period when the price of gas already nearly tripled. Instead of a one-year, 3-cent increase, this is a perpetual tax increase which lawmakers will not even have to vote on in the future. 

Under the mantra of “Reform before Revenue,” I was significantly involved in the passage of a meaningful Transportation Reform bill in 2009.  At the time the promise was that the Commonwealth would be on track to save $6.5 billion over 20 years, which equates to about $300 million a year in savings. It has since been revealed that we have only recovered about $500M in savings in the three plus years since this reform, and of that, $320M in savings is due to renegotiating a terrible deal involving “swaptions” that the former Turnpike Authority had entered into years before. So, in fact, we have only realized actual savings due to the 2009 reform of about $180 million, well below projections.

We are nowhere near achieving the savings that we promised taxpayers in 2009, yet the Governor and others in the Commonwealth have already made a successful push to burden citizens with increased taxes to finance our transportation system, rather than follow through with the promised reform and savings.

One such reform was a public-private commission that was supposed to be appointed under the 2009 law to oversee and vet proposals from private companies seeking to develop transportation infrastructure. These proposals generally involve a privately financed project that the Commonwealth could not afford to undertake, such as the recently proposed add-a-lane on Route 3 South. Unfortunately, this commission was not appointed until very recently, and only after I contacted the Patrick administration to inquire about the status of the commission.

Another unexplainable cost that will come from this recent bill is the much debated South Coast Rail, which remains a priority of the Governor and will likely be funded through the new revenues contained in this legislation. As I have said before, the South Coast Rail project is a boondoggle waiting to happen. The cost to build this line will likely be two to three times the Patrick administration’s estimate of $2 billion once all is said and done. After it is built, the South Coast Rail will require a massive operating subsidy, likely in the neighborhood of at least $35M-$50M per year. Asking citizens of the Commonwealth to shoulder a larger tax burden to pay for a line that is guaranteed to contribute to the operating deficit of the MBTA for many years to come is negligent at best.

As the Pioneer Institute pointed out in a recent report, The MBTA’s $3 billion maintenance backlog can be traced to new transit lines diverting funds from maintenance to expansion. Today, nearly half the MBTA’s $8.6 billion debt comes from building, operating, maintaining and paying debt service on expanded/new transit lines.

The Senate Republican Caucus offered an alternate transportation financing plan which would have included no new tax increases and a moratorium on capital projects unless the administration could show how the project would be funded. Unfortunately, this plan was rejected early in debate.

I would like to think that the Commonwealth’s transportation system would be on steady financial ground after this latest transportation finance effort. Unfortunately, even proponents of the plan will agree that this is not the case. Unless reforms are embraced and implemented, and wasteful capital projects such as the South Coast Rail are stopped, I am certain that there will be additional calls for tax increases in the near future, further impacting our overburdened taxpayers.

© Copyright 2013 Tanna K, All rights Reserved. Written For: Tinytown Unleashed