The legislature is tying up the last loose ends of the budget process. The year’s debate about taxes and spending is coming to a close.
The final flurry came when the Governor vetoed the legislature’s transportation plan, expressing concern that tolls on the turnpike outside of 128 might come down. Under existing law, there is a possibility that the tolls could come down in 2017, reducing revenues available to fund transportation improvements. The Governor feels that this possibility undermines the certainty necessary for transportation planning, effectively reducing the number of projects that MassDOT can start in the plan.
I’m sympathetic to the Governor’s perspective. My effort through the entire debate has been to provide the largest, longest and most certain commitment of funds possible to support the transportation plan.
That said, I voted with the overwhelming majority in both branches to override the Governor’s veto and implement the legislature’s plan. There is a time in the legislative process to accept half a loaf and move on. Continued confusion over the tax plan and budget would have been very bad for state and local government.
In voting for the final package notwithstanding the Governor’s concerns about the tolls, I took consolation in the following observations:
First, it is not clear that the Governor’s concerns about the western tolls are valid — the tolls can only come down if a future Secretary of Transportation certifies that the Mass Pike is in a state of good repair. It is, in fact, in a state of relatively good repair, but it needs constant attention, so the tolls could stay up.
Second, the legislature included language in the bill encouraging the exploration of open road tolling on other routes. It is, in fact, unfair for those who ride the pike to work to pay while many others who ride other interstates don’t. There is no certainty that new tolling will work out, but the legislature has opened the door to it and a broader tolling approach could more than offset the possible loss from the western Pike.
Third, the transportation plan depends not only on the statutory dedication of funds to transportation that many of us in the legislature fought for, but also on an allocation of annual borrowing proceeds from the state’s multipurpose general obligation borrowing program. The state’s general capacity to borrow is a function of the state’s total revenue. The tolls on the western pike are well under 1 percent of that total. Looking forward to 2017, the arguable uncertainty about the tolls adds little to the intrinsic uncertainty of future revenues or the state’s total capacity to borrow.
Finally, allocations of the state’s general borrowing capacity are controlled by the Governor — the durability of the transportation plan depends inescapably on the commitment of future administrations to making it work.
So, now, the action turns to the question of what categories of projects will be included in the state’s transportation program. The legislature will play a role in determining those broad categories through language in a transportation bond bill that we will work on the fall. My goal in that conversation will be the goal that I have had throughout the session — to secure adequate funding for public transportation.
Will, I’m a little dubious about plans to do open-road tolling (which is license-plate readers, right?). My understanding was that tolls were generally prohibited on interstate highways, so that’s one difficulty, and the other is that it might divert traffic onto alternative routes where the traffic is more annoying, more dangerous, and perhaps more destructive to surface roads not built to interstate standards.
It seems to me that one compromise on dropping tolls might be to change the cutoff to 495 instead of 128.
I also read, just today, of successful implementation of a revenue-neutral carbon tax in British Columbia. There are obstacles to doing that here — the ease of hopping over the border to buy gasoline in any of the 5 neighboring states, for example — but it worked quite well for them, with no knock on their economic growth.
With all due respect will Senator, I applaud the efforts of the Governor to take a stand and address the deplorable and embarrassing state of our Commonwealth’s infrastructure. I think the actions of the legislature are as always pandering to the most vocal segments of their constituents, not courageous, and perhaps most importantly, short-cited. Our infrastructure is in dramatic disrepair and dangerous from bridges, to sidewalks,to highways, MBTA tunnels, parking structures, and beyond. No one seems to care partly because the impact is more of a constant trickle rather than a dramatic, newsworthy event. But residents are impacted and it is in the long run much more costly to maintain poorly made structures on constant basis than to make the investments in well-built safe, long-term structures. I am not naive (frustrated for sure) of the complicated context and the politics that exist, perhaps a half loaf is better as you say, but the legislature needs to band together with the governor and convince the Commonwealth of the long-term importance of our infrastructure. I would have liked you to take a stand rather than band together with your colleagues. Of all our Senators, I’d expect you to be near the top championing what is clearly right and prudent in the long run.
If I understand the plan correctly, there is one quite important element that isn’t focussed on much. We are a service economy, but we tax products, not services. The legislation breaches that, and taxes some computer services – though I’m not sure how broad this is, or how much revenue it will produce. There were attempts to tax services about a generation ago – but because advertising and public relations are services and didn’t want to be taxed, the attempts were in vain. Along with getting revenue from internet sales, a certain amount of service taxing will help avoid cutbacks in government service provision, take pressure off property taxes, and more realistically reflect the actual economy.
Thanks, David. These are valid concerns — that’s the kind of thing we need to study carefully before moving forward. But we should be looking to move forward.
Thanks, Alec. I did fight for more — offered an expanded gas tax that was defeated soundly. Believe me we didn’t just lie down on this. I understand your disappointment.
Thanks, Naomi. There is a lot of controversy about the software tax. It may get further examined to make sure it doesn’t impact export business. But I agree it advances a concept worth further considering, i.e., that services could be taxed.
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