Op-Ed from State Representative Denise Provost

Many
people were shocked last week to read media reports that the state
proposes scaling back the Green Line extension. Most of us in
Somerville were feeling fairly confident about our hard-won commitment
to build this long overdue project. It wasn't just the Green Line,
either. The state, through its Executive office of Transportation (EOT)
also proposes to cut Somerville (and Medford) from the Urban Ring
project, and to delay construction of the Community Path.

Although
EOT says that it is still "committed" to building the Green Line
extension to Route 16, its official plans call for a scaled-back
project, and is conditioned on federal grant funding. Other communities
have seen their projects cut, both transit and highway. What could have
happened? Were these grim headlines just another sign of the world wide
economic collapse?

The answer is that transportation funding in
Massachusetts has been in a long, slow collapse of its own, that long
predates the current crisis in the wider economy. It's a story that
goes back for decades. For the sake of simplicity, I'll start telling
this tale from the beginning of a recent chapter.

2007: The Sad State of Transportation Finance in Massachusetts

In
January 2007, Massachusetts greeted a new Democratic Governor into
office. Many had high hopes for fundamental changes in state policies
and priorities. Those concerned about the state's transportation system
looked for action on the new administration's theme of "fixing what was
broken" in our Commonwealth.

The Governor had inherited a
transportation system which was, by 2007, in a sorry state. Most
investment in public transit had gone for years into expanding commuter
rail service, at great expense, to a relatively low number of riders.
The soaring cost of the Central Artery Tunnel project (CA/T or "Big
Dig") absorbed most available federal highway funding; the state
covered its growing share of Big Dig costs by issuing debt in the form
of bonds.

The state did have a strategy for repaying principal
and interest (the latter is called "debt service") on the billions it
was borrowing. Part of its plan was to use future federal grants as a
revenue stream – a kind of collateral – to repay this debt. As
Secretary of Administration and Finance for Governor Paul Cellucci,
Charlie Baker – now a Republican candidate for governor – promised to
forego $1.5 billion in federal transportation funds which Massachusetts
had not yet received, an obligation of about $150 million a year until
2015
[http://www.boston.com/news/local/massachusetts/articles/2009/07/17/bakers_role_in_big_dig_financing_may_test_for_his_campaign/]

Another
state tactic for avoiding Big Dig costs was to transfer this debt to
the Massachusetts Turnpike Authority (MTA) and to the MBTA. In
refinancing its CA/T debt, the MTA in 2001 entered into an unfortunate
"credit default swap" agreement with the firm UBS. The collapse of that
deal reduced the Turnpike Authority's bonds almost to "junk bond"
status, putting the Authority into precarious financial condition.

The
MBTA, by the start of FY 2007, was bearing $8.1 billion in debt, $2.9
billion in interest alone. Much of this amount was Central Artery debt
transferred by the state to the MBTA. The MBTA's debt service costs for
2009 consequently reached $436 million, requiring MBTA to spend a
higher proportion of its operating budget for debt service than does
any other transit authority in the nation http://www.boston.com/news/local/massachusetts/articles/2009/07/17/bakers_role_in_big_dig_financing_may_test_for_his_campaign/.

Complicating
the picture, the Governor had made a campaign promise to bring a new
rail line to New Bedford and Fall River. He had also taken a position
against increasing the gasoline tax. The administration clearly had
challenges ahead.