Baker Seeks Arsenal of Tools in $18 Billion Transportation Bond

By Chris Lisinski, State House News Service, State House, Boston, July 25, 2019

Massachusetts businesses would receive a tax credit for allowing employees to work from home and the MBTA would gain a new revenue stream under a long-term transportation borrowing bill the Baker administration unveiled Thursday.

As roadways become more congested and as rider frustration grows over public transit conditions, Gov. Charlie Baker and transportation officials pitched an $18 billion borrowing bill (HD 4396) that would direct another $2.7 billion toward MBTA projects, make hundreds of millions of dollars available for road and bridge improvements, and use a still-in-development state partnership to boost public transit funding.

“We understand that our residents are frustrated by congested roads and that for the MBTA and commuter rail riders, the system is only as good as the last time their trip was delayed,” Baker said at a press conference. “This legislation contains additional resources, new projects and important policy changes that will dramatically improve how people and products get to where they need to go.”

A long-promised congestion study will be released by the end of the month, Baker said, but its conclusions helped inform parts of the borrowing bill.

One of the key proposals is to launch a new program, capped at $50 million per year, that would make a $2,000-per-employee tax credit available to employers who let workers telecommute and therefore avoid traveling on already-clogged roads during rush hour.

Baker said Massachusetts “seems to be a laggard” compared to other states in how frequently employees work from home, which can be a viable strategy to reduce congestion. While other states have floated similar ideas, none have enacted such a policy, according to the governor.

“We’re hoping that by creating a financial incentive to get people to move in this direction, we will get people to play,” Baker said. “A lot of employers have said to us that if there were an incentive in place, they would take it a lot more seriously.”

Close to a third of the funding in the borrowing bill would be directed toward the MBTA, including a new $2.7 billion for reliability, modernization and expansion projects over the next decade not currently included in the agency’s five-year capital plan. The additional money will fund infrastructure improvements, bus and commuter rail network updates and more.

Replacement of the entire Red and Orange Line fleets – already-underway projects that would receive significant funding under the borrowing legislation – would add 85,000 seats to the network by the time both are complete in 2023, Baker said.

The bill would also authorize changes to procurement processes at the MBTA, allowing it to more rapidly advance improvement projects.

“What we have done already is not enough,” said Transportation Secretary Stephanie Pollack. “We have to repair and modernize our transportation system faster and provide our workers with more and better options for getting where they need to go.”

In the long term, Baker wants the T to gain additional funding from a multi-state initiative aimed at reducing carbon emissions from the transportation sector. Nine states continue to negotiate parameters for the Transportation Climate Initiative, and once they determine how it will function — likely via a cap-and-invest program similar to RGGI — half of what Massachusetts receives would be allocated to the MBTA under Baker’s bond bill.

The governor said Thursday it is too early to estimate how much revenue public transit officials could expect as a result of that provision.

“It’s expected that the negotiations going on currently between the states around program design would probably be resolved some time in early 2020, and at that point in time, we would obviously communicate that to the Legislature as they deliberate this legislation,” Baker said. “That’s my way of saying I can’t answer that question today, but we certainly understand we need to answer that question in time for the Legislature to incorporate it into their plan.”

Other components of the borrowing target climate goals, too. The $330 million sought for the state’s 15 regional transit authorities would help them transition to carbon-neutral electric buses, officials said.

Although it does not increase the Chapter 90 reimbursement cities and towns receive for road repairs each year as municipal leaders have long requested, the legislation creates a $100 million Municipal Paving Program to help address locally owned roads in poor condition and a $1.25 billion “next-generation” fund for bridge maintenance. Another new $50 million fund would award grants to municipalities to install bus lanes, modern signals and make other improvements.

“If the Legislature enacts something that resembles this piece of legislation by the end of this session, Massachusetts will have the biggest arsenal of tools and capabilities it has ever had to make our transportation network cleaner, safer and better able to meet the needs of our residents and communities,” Baker said.

Transportation bond bills pass through the Legislature every few years to cover capital spending for major transit needs.

In 2014, the Legislature approved a $12.7 billion, five-year transportation bond bill that included the South Coast Rail construction, which broke ground this year, and South Station expansion, a major project that has not taken hold.

Baker’s bill would distribute funding over varying timeframes, though a spokeswoman for his office said the bond authorization would be for 10 years.

Reactions to the legislation varied. The advocacy group Transportation 4 Massachusetts praised the governor’s work on “ensuring Massachusetts continues to reduce carbon emissions while building a more resilient transportation system,” while the Massachusetts High Technology Council urged lawmakers to focus on increasing the capacity to advance transportation projects.

“Relying solely on revenue-centric ‘solutions’ designed to simply push more funding through the same old systems is both misguided and inadequate and creates serious risk of damaging the economic momentum the Commonwealth enjoys today,” the council wrote in a press release.