Speaker Deleo Throws Out Some Cold Water

Governor Deval Patrick has put out a very ambitious agenda for his last two years, with a centerpiece being his proposal to raise $1.9 billion in additional revenue to bring new resources to education and transportation. With Speaker Robert Deleo refusing to take his traditional “no new taxes” pledge and the transportation system buckling under a severe financial burden the time does look right for some deal on revenues. The Speaker appeared “On the Record” this past weekend, and certainly seemed to throw some cold water on the expansive plans of Governor Patrick. The Speaker pointed to the two obvious holes in the transportation budget: the annual deficit at the MBTA, and the financing of the Department of Transportation workforce via the capital budget. He pegged those two combined as being in the $400 million range, saying they needed to be dealt with. He did leave a bit of room for some additional finance beyond that, and although he did not specify I would venture to guess he would allow some growth in local infrastructure assistance.

The Governor has not simply laid out a standard tax package. It has a lot of moving parts, and rather than trying to just deal with ongoing transportation deficiencies the Governor has put forward a package large enough to finance projects long talked about, but stalled due to lack of financing. What are they? South Coast Rail at $1.8 billion, Green Line Extension at $674 million, South Station Expansion at $850 million, a Boston-Springfield rail connection at $364 million, and several other projects. I still believe that the Governor’s proposal manages to flush these transportation issues out, with no funding meaning no projects. We have traditionally managed to do big infrastructure projects without worrying either about construction costs, or ongoing maintenance. As I see it the Governor, at least on the construction cost side, is saying to the Legislature that hard finance choices need to be made. The Speaker seems ready to do just that. In addition to his appearance on OTR he spoke today to the Greater Boston Chamber of Commerce, where the State House News Service reports he will say:

“I’m worried that the administration’s proposal places too heavy a burden on working families and businesses struggling to survive. We want to minimize the pressure on Massachusetts citizens as we find ways to meet our goals. If we are to pass a new revenue package, I believe it should be far more narrow in scope and of a significantly smaller size,” DeLeo plans to say.

Significantly the Speaker looks to be ready to undo the Gordian Knot developed by the Governor by separating a transportation finance package from the rest of the budget, and bringing that forward in advance of the House Ways and Means proposal.

The House appears to be moving toward addressing transportation financing with separate legislation ahead of the April 10 release of the House Ways and Means budget, a path that would require details of the House revenue plan to be released very soon.

Just based on his comments I would be willing to guess that a transportation finance package worth about $500-$750 million will be coming forward. He needs $450 million to just solve existing problems, and a bit of growth beyond that (forward funding for regional transit, Chapter 90) should bump that number a bit. But it will not solve all of the transportation issues facing the State. Where will the money come from, if not from an income tax hike?

It appears as though the Speaker will be looking towards some additional “user fees”, which could be additional fare and fee hikes on users. Will all revenue increases come from “users”? Hard to see how that is possible, but we will have to stay tuned. For now it looks like the Governor can expect a substantially downsized revenue package from the Speaker.

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