Keeping On Track
Our Progress in Reforming and Funding Transportation since Passage of the Massachusetts Transportation Finance Act of 2013
This is the first of a series of regular progress report issued by Transportation for Massachusetts, Conservation Law Foundation and MASSPIRG to evaluate the health of the Commonwealth's transportation system and the implementation of the Transportation Finance Act. Clearly, available funds cannot meet all of the state's pressing transportation needs. Therefore, full and timely implementation of the Act is imperative for this law to achieve its goal of addressing the most burning needs of the state's transportation system and to set the stage for future legislatures and administrations to continue their work to fund the transportation needs of all our residents.
MASSPIRG Education Fund
It has been almost eight months since the passage of the historic Transportation Finance Act of 2013. The Act was an excellent step towards a modern and safe transportation system for the Commonwealth of Massachusetts. It is projected to raise an average of $600 million per year for the next five years. These new funds will help fill a gap in transportation funding that has repeatedly been estimated to be over $1 billion per year over the next 20 years. Clearly, available funds cannot meet all of the state’s pressing transportation needs. Therefore, full and timely implementation of the Act is imperative for this law to achieve its goal of addressing the most burning needs of the state’s transportation system and to set the stage for future legislatures and administrations to continue their work to fund the transportation needs of all our residents.
Transportation for Massachusetts will issue regular progress reports evaluating the health of the Commonwealth’s transportation system and the implementation of the Act to help ensure the success of the new law. In its first seven months, the Legislature and administration have met the expectations of the law in most respects. And, small, but significant additional transit services have come online as a result of this new law. The actual transportation budget for FY13 has matched last year’s projections fairly closely, but fell about $84 million short.
ACHIEVEMENTS OF THE TRANSPORTATION FINANCE ACT TO DATE
New Funding: The three-cent increase in the gas tax and reinstatement of tolling on the westernmost portion of the Massachusetts Turnpike has already started to bring in some important new funding for the state’s transportation system. In addition, the Massachusetts Bay Transportation Authority (MBTA) launched a Corporate Partnership Program and issued a request for proposals seeking to sell station naming rights and associated sponsorship opportunities.
Sounder business practices: Massachusetts Department of Transportation (MassDOT) is shifting operating expenditures from the capital budget, though somewhat more slowly than anticipated. The regional transit authorities (RTAs) are beginning to develop comprehensive regional transit plans. The MBTA plans to increase its fares by 5% on average in FY15, beginning a pattern of smaller, planned fare increases every two years, which should be more predictable for both riders and the MBTA.
Capital Improvements: As required by the Act, MassDOT has released a financially constrained five-year Transportation Capital Investment Plan (CIP) that includes many, but not all of the transportation projects originally outlined in last year’s transportation needs assessment, The Way Forward. Examples of investments included in the plan are new Red and Orange Line cars for the MBTA, the conversion of tolls on the Massachusetts Turnpike to an electronic tolling system, the Green Line Extension, the I-91 Viaduct in Springfield, reconfiguration of the I-93/I-95 Canton Interchange, 76 additional road and bridge projects, and early action items for South Coast Rail.
Operational Improvements: This month, the MBTA is launching a one- year pilot to reintroduce late night bus, subway, and light rail service. A dozen of the RTAs have or will soon expand service as a direct result of the increased funding in the Act.
THREATS TO THE SUCCESS OF THE TRANSPORTATION FINANCE ACT AND THE COMMONWEALTH’’S TRANSPORTATION SYSTEM
Funding is inadequate, some has already been repealed, and some funding is under siege. While the Act has raised significant new revenue, some of the new revenue sources have already been reduced or targeted for repeal. Specifically, the computer and software service sales tax was repealed two months after the Act was passed, and a question that will likely be certified for the November ballot will, if passed, repeal the indexing portion of the gas tax. Other financial changes that were not projected by the architects of the Transportation Finance Act of 2013 include the rollback of MBTA paratransit fares and the MBTA labor arbitration decision that will likely increase the MBTA’s labor costs annually by approximately $26.4 million and include a retroactive payment for previous years in the amount of $27 million.
Many projects do not have funding, or sufficient funding, to go forward. Many of the projects included are funded at a lower amount and slower pace than previously proposed—so much so that some important projects are practically left out. For example, replacement of Green Line cars was estimated in The Way Forward to cost about $732 million, but only $2.6 million has been reserved for
that purpose. In a similar vein, the 15 Regional Transit Authorities are now slated to receive $170 million instead of $200 million for capital improvements—alarmingly, however, 48% of the money will only become available in FY18. So, instead of receiving $40 million next year, they will receive about $20 million, most of which will be needed for infrastructure improvement, leaving little money, if any, for bus replacement. These differences will have a significant impact on the Green Line and on the RTAs’ ability to deliver safe, reliable service.
MassDOT, the MBTA, and the RTAs have made admirable progress over the last six months. As you will see below, however, the state’s transportation system is still underfunded and unable to meet the needs of its citizens. Over the next few months, the Commonwealth will have to maintain this pace and catch up on a few of the deadlines imposed by the Transportation Finance Act to keep us on track. It is our hope that this progress report will enable transportation advocates, the administration, and the Legislature to clearly identify the unmet needs of our transportation system and then take action that addresses them.