MMA testimony on transporation reform bills

The Honorable Joseph Wagner, House Chair
The Honorable Steven Baddour, Senate Chair
Joint Committee on Transportation
State House, Boston

Re: Transportation Reform Legislation, H. 107 and S. 10

Dear Chairman Wagner, Chairman Baddour and Honorable Members of the Committee,

On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association wishes to offer comments on the two transportation reorganization bills that have been submitted to your Committee for consideration, H. 107 and S. 10.

The MMA wishes to congratulate both the Patrick Administration and the Senate for putting forth bold and thoughtful reform proposals that would provide much-needed cost savings and ensure efficiency within the state’s transportation framework. The MMA also wishes to thank both of you for your leadership and support on behalf of local government over the years, notably in augmenting the Chapter 90 local roads program in the most recent Transportation Bond Act to its highest capital authorization, allocating as much as $175 million in fiscal years 2010 and 2011.

The two plans under consideration today mirror many of the revenue and non-revenue solutions put forth by the Transportation Finance Commission (TFC), many of which have received the MMA’s support. The MMA has also been an active participant in “Our Transportation Future,” a coalition of several stakeholders who have collectively called for consideration of all revenue and non-revenue solutions to address the needs of our crumbling infrastructure and inefficiencies embedded in our transportation system.

In this letter, we are providing comments on (a) the gas tax increase proposed by the Administration, (b) reorganization proposals contained on both plans, and (c) other reforms included in both proposals that would benefit cities and towns.

Gas Tax Increase

One of the most controversial proposals placed on the table is the Governor’s call for a 19-cent increase in the motor vehicle fuel tax. The value of the portion of the Massachusetts fuel tax devoted to transportation – 21 cents per gallon – set in 1991 is now worth only 14 cents in buying power, according to TFC. In the past, the MMA supported these increases in order to support local maintenance of roads and bridges under their jurisdiction, of which 90 percent of the state’s road miles are so classified. The MMA presumes that the increase, as proposed by the Administration, is sufficient to meet the needs of both the state and its municipalities.

However, at the same time, such an increase would double the amount cities and towns spend on diesel and unleaded fuel that runs school buses, police cruisers, fire trucks and public works vehicles that deliver municipal services. For example, the Town of Shrewsbury currently spends more than $29,089 for fuels used for municipal purposes (excluding school buses). The proposed increase would nearly double that expenditure for the town, by as much as $26,319 to $55,408. If we added school buses, this number would increase dramatically. Shrewsbury is but one example and is only of modest size. If we extrapolate this number statewide, we know such an increase would cost our municipalities millions annually at a time when local aid has been cut mid-year.

As fiscal 2009 draws to a close over the next four months, municipal officials are struggling to keep their budgets in balance due to the January loss of $128 million in municipal aid and the tens of millions of dollars in shortfalls in local snow and ice accounts due to the unusually stormy winter. Cities and towns will end fiscal 2009 in severely weakened financial condition. We expect that budget deficits will be widespread, and this fiscal distress will deepen as we enter the new fiscal year.

As is the case for the state, cities and towns foresee large budget gaps for fiscal 2010. There are few available options for closing municipal gaps under current laws and rules, other than imposing significant cuts in core services and personnel. Across the state, service cuts and employee layoffs began this year. Overall, we predict thousands of layoffs of teachers, police officers, firefighters, public works employees, and many other key workers. A near doubling of the tax that all cities and towns must pay for fuel will force cities and towns to make even tougher choices for the aforementioned reasons. Cities and town are public entities, using motor fuels for public purposes, and any additional cost would be a further burden on local homeowners and taxpayers.

The MMA supports augmenting the state gas tax so long as municipalities receive their fair share of these additional revenues that they can utilize for local transportation purposes, such as Chapter 90. In particular, the MMA respectfully and urgently requests that with any change in the tax rate for motor fuels, any proposal that leaves the Committee:

• Guarantee that no less than 15 percent of gas tax revenues be dedicated to cities and towns through Chapter 90 local roads funding;
• Reinstate the so-called Chapter 81 program whereby all cities and towns received 7.5 percent of gas tax revenues for transportation-related purposes; and
• Exempt cities and towns from any increase in the gas tax for those reasons stated above.

It is important to note that Chapter 90 is currently the only share of the state’s gas tax that all cities and towns receive for transportation purposes. In many cases, Chapter 90 is the majority of local aid that municipalities receive, especially in western Massachusetts. Further, it is important to note that because of certain federal restrictions, local resurfacing and reconstruction projects, such as those funded by Chapter 90, are not in receipt of millions in new stimulus authorizations pursuant to the recently enacted American Recovery and Reinvestment Act of 2009. Lastly, the MMA would be remiss if we did not add that this year Chapter 90 is funded at the same level, or $150 million annually, as in the mid-1990’s. As the TFC and others have noted, such a level is not sustainable especially provided that since this level of investment was initially established, inflation and the cost of labor and materials, notably asphalt, have increased exponentially. We appreciate the Federal Stimulus Transportation Task Force for recommending as part of their final report a Community Investment Program that would invest greater resources into Chapter 90 and other local transportation resurfacing programs, since these programs are not receiving any federal aid.

Reorganization Proposals

Besides proposals to increase the state gas tax, several other initiatives being offered by both the Senate and Administration deserve attention, notably proposals that reorganize the state’s transportation administrative system itself.

The MMA welcomes the many changes both proposals would offer to significantly reform the state’s transportation bureaucracy while also providing a new dedicated State Transportation Trust Fund used to finance maintenance and expansion of our transportation network. Further, the MMA thanks the Senate and Administration for maintaining the current language within Chapter 81 of the General Laws that provides for further local transportation opportunities. Lastly, MMA truly appreciates both the Senate and Administration for maintaining the Chapter 90 language currently in effect, as recently amended by Chapter 303 of the Acts of 2008, governing the use of allocations.

With respect to the Senate plan, the MMA respectfully asks that local government be represented on the proposed Surface Transportation Authority that would make critical funding decisions and control a great number of state parcels. As you know, the Authority shall have control over the proposed Trust Fund that shall be used to provide critical Chapter 90 monies statewide. Local leaders should have a voice with respect to how those monies shall be spent and authorized. Additionally, for these same reasons, the MMA respectfully asks that local government representatives be included as members of the Senate-proposed Road and Bridge Commission.

Finally, MMA asks that the Senate proposal relative to the disposition of state surplus land be amended to allow for a municipal right of first refusal at a reduced price.

New Proposals the MMA Supports

Finally, the MMA supports the following new, local-friendly proposals contained within the Administration’s framework:

• STRAP reform. The Governor’s proposal removes the restriction of one grant every five fiscal years while also augmenting the cap of the grant amount by $250,000, to $750,000.

• Public Works and Intermodal Transit Center Economic Development Program. This program would encourage economic development through transit oriented project development.

• Gateway Cities Program. This program would provide grants to improve roads and bridges in larger cities and towns experiencing higher unemployment than the state average.

• Regional Mobility Assistance Program. This critical program would assist cities and towns with (a) development and rehabilitation of tourism expansion corridors, (b) protection of historic centers (c) promotion of improved mobility and access from neighboring states and (d) promotion of local economic growth and reliability for transportation facilities in rural and less accessible regions.

• Private Project Ombudsman. As recommended by the TFC, this position would assist municipalities and private entities to develop and advance projects critical to the economic development of a community and connecting to the state transportation system, and to ensure regional equity in the transportation system.

In conclusion, the MMA applauds both plans since they would go further than any proposals in recent memory to provide the necessary resources and tools to ensure that our transportation infrastructure is safe, passable and meets the needs of current and future users.

Thank you very much for the opportunity to provide you and your colleagues with our comments.

Sincerely,

Geoffrey C. Beckwith
Executive Director, MMA