Transportation Finance
October 10, 2017
At A Better City, we maintain a constant focus on our transportation system and the resources supporting it because the condition of our roads, bridges, and performance of the MBTA is directly related to the health of our economy. In the past few weeks, the conversation on transportation revenue reemerged both inside Massachusetts state government and within the stakeholder community. The stars are aligning for a larger debate and possible public action in 2018. A Better City is prepared to lead this discussion once again through our work on potential statewide ballot questions and an upcoming report on the transportation finance at the MBTA and MassDOT.
Upcoming Ballot Questions
In November 2018, two different ballot questions will likely be placed before statewide voters. One is a proposal to allow a new 4% income tax surcharge on annual household incomes above $1million per year. This is commonly referred to as the “millionaire’s amendment." Proponents of this question are officially demanding this revenue to be used exclusively for two priorities: transportation and education. A separate ballot question will ask voters to reduce the sales tax rate to 5%, from the currently level of 6.25%. A specific portion of the sales tax in Massachusetts is automatically dedicated to the MBTA, so this ballot question could result in additional budgetary challenges for our public transit agency. The combination of these two questions will certainly stimulate public debate over the amount of revenue we need in Massachusetts for transportation.
The voters were almost given a third ballot question, but A Better City worked to disqualify a specific proposal that would eliminate all tolls on Massachusetts roads and highways. We submitted an official comment letter to Massachusetts Attorney General arguing the toll question was unconstitutional, and we cited recent case law to support this claim. Attorney General Maura Healey and her office agreed with our position and they prevented this question from being placed before the voters.
The correct level of transportation funding
Next November, there are a few possible results from Massachusetts voters on our tax code and funding levels for transportation. Many outcomes could send mixed messages. They could choose more revenue by approving the 4% income tax surcharge and rejecting the cut to the sales tax. Alternatively, they could reject the income tax surcharge /millionaire’s amendment, while at the same time reducing the sales tax and thereby reducing revenue for transportation. Also, one question could pass, while the other fails. What would that outcome say on how we value the relationship between taxes and support for transportation investments?
This debate would be better informed - and the public would be better served - if we could properly define the current need for transportation revenue. There is certainly a transportation finance gap at the MBTA and MassDOT, but how large is this deficit? What are the choices we face to close this gap? What are the tradeoffs to our way of life and regional economy if we choose to do nothing? What are the benefits to a properly maintained system?
These questions and more will be examined in A Better City’s next edition of the State of the Built Environment Report, which will be announced in the next few weeks. An additional report nearing completion is a joint effort with the Boston Foundation to examine the economic impact on the MBTA. In addition, the Mass Taxpayers Foundation recently released a transportation report that declared, “The State Needs a New Comprehensive Blueprint” and called for an official state commission to inspect transportation-funding issues. A Better City is already working on this subject and will be delivering its perspective soon.
Choosing The Future of Boston
Transportation finance is an issue that has plagued Massachusetts for decades, but 2018 will be a different year as elected officials, the business community, and general public will together define the future of transportation in metropolitan Boston. It is hard to imagine the City of Boston of today if we had rejected the bold investment decisions of the past. We would be without the Rose Kennedy Greenway parks, the growth in South Boston Waterfront area, and the Southwest Corridor along the Orange Line. We are beginning the next chapter of the region’s potential, and A Better City is again ready to shape this debate. Our goal will be to see the MBTA, MassDOT, and our entire transportation network supported with the appropriate level of funding to deliver the mobility services and economy we all deserve.
By: Tom Ryan, Director of Public Policy & Gov. Affairs
tryan@abettercity.org
