November and January are critical months for Ch. 90 road funds

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From The Beacon, October 2014

It’s no secret among local officials that state government needs to increase its investment in the “bricks and mortar” underpinnings of our public infrastructure at the local and state level to ensure that we can sustain and expand a modern economy and vibrant communities.

In particular, our transportation system must be first-rate if we want Massachusetts to be competitive in today’s and tomorrow’s global economy.  And the reality is that because state law imposes a strict cap on local property taxes and revenues, the Commonwealth must be a full partner with cities and towns, and it must provide the financial support necessary to ensure that all of our public infrastructure systems are adequately maintained and expanded.

Communities are responsible for maintaining and repairing 30,000 miles of roads in Massachusetts, representing 90 percent of the roadways in the entire state. In 2012, the MMA released a report documenting that cities and towns need to spend at least $562 million every year just to bring local roads into a state of good repair, the industry standard for ensuring well-maintained roads in good condition. Due to inflation, that amount has increased to $568 million in fiscal 2015.

Currently, municipalities spend far less because of inadequate resources and because, for most cities and towns, the $200 million Chapter 90 program is the only source of funds for road construction and repair. Funding the Chapter 90 program at $300 million annually, with an inflation-based adjustment each year, will close a portion of this huge gap between current spending and the actual need.

Investing more in Chapter 90 funding to improve the quality of local roads will actually save taxpayers millions of dollars a year. According to the U.S. Department of Transportation, once a local road is in a state of good repair, every dollar invested to keep it properly maintained will save $6 to $10 in avoided repair costs that become necessary to rebuild the road when it fails due to a lack of maintenance. Yet Chapter 90 has not kept pace with the needed investment to prevent our roads and bridges from crumbling, and over the long term this will drive repair costs even higher. In fiscal 2014 and 2015, the Legislature voted unanimously to increase the Chapter 90 authorization from $200 million to $300 million, but the current administration has withheld the additional funds each year.

The MMA has called on all of the candidates for governor to indicate whether they would, if elected, immediately release the $200 million in Chapter 90 authorizations that have been held back as one of their first actions when they take office next January, and to swiftly file a transportation bond bill for legislative enactment in early 2015 that includes a five-year Chapter 90 program, with a minimum annual appropriation of $300 million, adjusted for inflation each year. The major candidates for governor have each pledged to take this action, which is very good news for cities and towns.

But even before the next governor takes office in January, the future of transportation funding faces another hurdle that must be cleared: the November ballot box. The voters of Massachusetts will determine the fate of Question 1, the referendum question that will decide whether to keep or jettison the new state law to annually adjust the gas tax to keep pace with inflation.

The transportation reform and funding package enacted by the Legislature in 2013 raised the gas tax by 3 cents, the first rate change in more than two decades, and incorporated the important provision to index the gas tax in the future in order to establish a predictable and adequate revenue stream that will keep pace with the rise in material and labor costs each year.

Estimates are that indexing the gas tax will cost consumers very little – only about $5 per year. But the funds will add up, and over the next decade the indexing provision will generate approximately $1 billion for transportation programs and projects, including Chapter 90. It only makes sense to index the gas tax if we want Chapter 90 funds to grow with inflation every year, too.

Because Question 1 seeks to repeal the gas tax indexing provision, the MMA’s official position is to oppose the ballot measure. In November, if voters render a “No” decision, the indexing provision will remain in law. A “Yes” vote would eliminate indexing, and remove $1 billion that cities, towns and the state are counting on to invest in critical transportation needs over the next decade.

And thus, the future of Chapter 90 funding for the repair and maintenance of 30,000 miles of local roads faces two tests: first, the November vote to affirm or reject indexing the gas tax, and second, the January decision by our next governor to release all of the withheld Chapter 90 funds and deliver on the Legislature’s commitment to provide a 50 percent increase in state funding for local roads.

A “No” outcome on Question 1 in November to preserve gas tax indexing, and a “Yes” decision by the next governor in January to distribute the full $300 million Chapter 90 funding level are both essential for our state’s economic prosperity.