GOV. MAURA HEALEY says she won’t be relying on new taxes and fees to balance her budget proposal for the coming fiscal year, but it seems new taxes and fees are not far away on the horizon.
On Friday, Healey said she would be filing legislation to allow cities and towns to raise existing lodging and meals taxes and assess a new 5 percent surcharge on the value of motor vehicles that would be added to the existing motor vehicle excise tax.
In her State of the Commonwealth speech, she promised to double support for MBTA operations, address deferred maintenance, cut fares in half for low-income riders, and come up with a new way of financing transportation in the “clean energy era.”
No details were provided, but it appears the governor will address the T’s forecasted shortfall in the coming fiscal year with a nearly $190 million infusion of additional cash and set to work on a longer-range plan to replace the gas tax, which is expected to shrink as more and more drivers shift to electric vehicles, and provide new taxes and fees to support the MBTA.
MBTA officials on Friday warned that a stark choice lies ahead – either cut service dramatically without new taxes and fees (as the Washington, DC, transit system is doing) or put the T on sound financial footing with new taxes and fees (as New York’s Metropolitan Transportation Authority has done). New York hiked a transportation mobility tax, boosted a corporate tax, tapped casino revenues, and increased fares and tolls.
“There are challenges and there’s a lot that needs to be done,” Healey said of transportation in her State of the Commonwealth speech. “But I promise, under my administration, we will not kick the can down the road any longer on anything difficult.”
On The Codcast, former state transportation secretary James Aloisi and Brian Kane, the executive director of the MBTA Advisory Board, generally praised Healey’s approach while reserving judgment until more details are released.
“The message is right, the objective is right, the means of executing it we don’t know yet,” said Aloisi.
“I applaud the governor for saying the right thing,” Kane said. “I’ve heard governors say things like this before. I heard Deval Patrick say the era of kicking the can down the road at the MBTA is over about 11 years ago. And I heard the governor last night say we’re not going to kick the can down the road. We’re now down the road — at least we are from 2013 — and I just want to see what happens.”
The two transportation experts had more questions than answers after the governor’s bold but vague statements during her speech. Kane, for example, said he initially thought Healey was going to double the T’s take from the state sales tax when she said she was going to double support for MBTA operations. But then he realized she must be talking about doubling the $187 million the T receives in the state budget, not the billion dollars it receives from the sales tax. “I just don’t see how an extra billion is possible at this time,” he said.
Kane liked Healey’s push for half-off fares for riders aged 26 to 64 making less than 200 percent of the federal poverty limit — $29,160 for an individual and $60,000 for a family of four. The program would cost an estimated $23 million to $26 million in the coming fiscal year and $52 million to $62 million fully phased in.
Aloisi said he would like to see the program tweaked, eliminating fares entirely on buses and going with the half-off fares on the rest of the system — subways, ferries, and commuter rail. He said the T is developing a new automated tap-in and tap-out fare system that will be enforced with spot checks by fare enforcement officers. He worries that that system will lead to charges of racial profiling on buses and not be worth the cost and hassle.
Regarding Healey’s announcement that she intends to come up with a new way of financing transportation, Kane and Aloisi – both of them big transit fans — were supportive.
As the nation shifts toward electric vehicles, gas tax revenues are likely to shrink and some alternative funding approach is needed, they said. Aloisi said the main options for replacing gas tax revenues are charging more for ownership of a vehicle, charging more for vehicle use (tolls, congestion pricing, a tax on vehicle miles traveled), or some combination of the two.
Kane said one thing to keep in mind as the transportation funding debate progresses is that the T needs to be an attractive alternative to getting people out of vehicles all together, something it isn’t currently.
Aloisi praised Healey’s willingness to tackle the funding question, which he said former governor Charlie Baker refused to do. Baker refused to experiment with a tax on vehicle miles traveled, even if the experiment was funded by the federal government. Aloisi referred to Baker’s “electoral ostrich approach, put your head in the sand and hope it goes away.”
Aloisi said Healey is not afraid to embrace the reality that revenues from the gas tax – the key funding source for transportation – are going to shrink as the state and the federal government prioritize reducing tailpipe emissions.
“It was inevitable and the governor recognizes that real world inevitability,” Aloisi said. “I applaud her for doing this. It’s sad that in Massachusetts it amounts to a profile in courage for a governor to tell people the truth.”