Mass. Senate adopts $800 million tax plan for transportation
During a rare Saturday session, legislators yesterday cleared a transportation bill that would raise gas, tobacco and business taxes in Massachusetts by $500 million and eventually dedicate as much as $800 million a year in new revenues for transportation.
According to a report by the State House News, Senate President Therese Murray led the charge to pass the tax bill as the Senate roared through more than 100 amendments to the legislation before approving it with all but two Democratic votes.
During yesterday’s discussion, the Senate also called on the MBTA to consider selling naming rights for subway and commuter rail stations.
The measure was one of dozens of proposed amendments to the transportation finance bill, and asks the MBTA to name a private contractor to sell naming rights and other advertising on the transit system.
Supporters of the measure predicted it could generate about $20 million for the T, and said naming rights could be sold creatively without infringing on tradition.
Gov. Deval Patrick, who criticized the House for a similar tax bill that he vowed to veto, was more supportive following the final vote at 8 p.m.
“Experts agree that we need approximately $1 billion more a year — in addition to further operating efficiencies — to give our citizens a safe, functional, modern transportation system to keep pace with a growing economy,” Patrick said in a statement. “Today’s Senate bill is a significant step in that direction and I commend them for their work.”
Supporters of the bill said it would prevent a second major MBTA fare hike in as many years, deliver funds to address regional transportation needs and expedite construction projects, and over three years end the longstanding practice of paying about 1,900 state transportation employees with borrowed funds.
Critics of the bill said the Patrick administration was failing to meet cost saving benchmarks under a 2009 transportation reform law and argued the legislation would further burden taxpayers by pulling more of their money into a problematic and inefficient transportation.
Without reforms, they said, the new revenues will not be enough to keep up with MBTA spending patterns.
The push to pass the bill, which cleared the House just before midnight Monday on a 97-55 vote, underscored the pressure that Murray and House Speaker Robert DeLeo are under since the House has already proposed a budget spending revenues from the still unapproved tax hikes and the Senate plans to do the same in May. Differences in the House and Senate tax bill remain to be ironed out by the branches.
The House bill fell just short of the vote required to override a potential veto. The Senate vote cleared the two-thirds threshold required.
After Patrick threatened to veto the original bill offered by DeLeo and Murray, saying it didn’t provide enough new revenues to meet transportation system needs, the Senate pulled money from other areas of state government into the bill to bolster planned new revenues closer to the $1 billion sought by Patrick.
On the tax front, the House and Senate bills raise new revenue from a $1 per pack increase in the cigarette tax and increases on cigar and smokeless tobacco products, new sales taxes on computer design services and software modifications, the removal of a tax exemption for utilities, and a three-cent increase in the gas tax, which would also be indexed to inflation under the legislation.
A contingent of liberal senators attempted to include a trigger that would raise the gas tax an additional three cents if projected revenue falls short in 2015, but that vote garnered the support of only 10 members.
“The rest of the body was very careful in how much they wanted to raise, and how much they wanted to tax,” Murray told reporters after the final vote. Asked how it would match up with the House version, Murray said, “It’s the same framework as the House, for taxes, and we just did other revenues that we moved over from other accounts, so I’m hoping that the House will look on this favorably. Hey, the House did the heavy lifting first, and they are our partners, and hopefully the governor will be our partner in this also.”
During a speech in opposition to the gas tax trigger, applause erupted from the gallery, and Murray directed court officers to clear the crowd, during which time “Don’t tread on me” flags were displayed and criticism rained down on the senators as some chanted “No new taxes.”
On her way out, a woman wagged her finger at the chamber below and said, “Think about your children and your grandchildren when you take these votes, you idiots.”
“You might not have seen what was going on, but we were getting Nazi salutes from the people in the corner and some really vulgar language before they disrupted,” Murray told reporters afterwards.
Another amendment, sponsored by Sen. Karen Spilka (D-Ashland) enabling state officials to start discussing with the federal government the idea of establishing tolls on the state’s borders, won approval by a 19 to 15 margin, with some senators who represent border areas saying tolls would hurt their constituents.
Spilka had said that removing increases in current tolls from the formula the Legislature is using to move the transportation department toward more fiscal self-sufficiency was an essential condition to win her vote on the bill. That amendment passed on a voice vote after the Senate voted down on a voice vote a Sen. Sonia Chang-Diaz (D-Jamaica Plain) further amendment that would have also exempted fares for MBTA riders.
“So we can have perpetual gas tax increases, but we can’t look at tolls,” said Sen. Robert Hedlund (R-Weymouth).
Senate Ways and Means Committee Chairman Sen. Stephen Brewer (D-Barre) said the bill also makes $160 million in new tax revenues available to spend in the fiscal 2014 budget he plans to roll out next month. The House budget plan unveiled on Wednesday steers some of those new revenues to education and local aid.
Hedlund said reforms included in a 2009 law were intended to produce $6.5 billion in savings over 20 years, but so far had delivered only $500 million. Of that, Hedlund said, $320 million was attributable to ending interest rate swap practices that were not a focus of the 2009 law.
“Obviously we have discarded the concept of reform before revenue,” said Hedlund.
Rafael Mares, staff attorney at the Conservation Law Foundation, said that the final Senate version devoted more money to transportation than what Senate Ways and Means had proposed by indexing a 2.5-cent-per-gallon underground storage tank gas tax to inflation, and devoting those revenues to transportation.
On Friday night, before some changes were made to the bill in session, Mares calculated that the average amount of money over five years designated for transportation in the Senate bill was $602 million, compared to $504 million in the House plan and $858 million in the governor’s plan.
Kristina Egan, executive director of Transportation for Massachusetts, said the roughly $800 million in transportation revenues the Senate projected to raise by 2018 is “optimistic,” and hoped the bill would be modified to include more gas-tax hikes before reaching the governor.
Six of the more liberal members of the Senate, who all supported the final bill, praised the process and signaled that if substantially changed it would lose their support.
“Through both the work of the Senate Ways and Means Committee and the amendment process, the transportation finance bill passed by the Senate today reaches a level of revenue that allows for meaningful investments in a fiscally-sound, 21st century transportation system. It is for this reason that we vote yes on this bill today,” the six senators wrote in a joint-statement. “We look forward to the bill continuing to the joint House-Senate conference committee. Should the bill be reported out of the conference committee having lost the revenue gains we made, it will also lose our support.”
“There’s definitely more money in this bill,” Somerville Mayor Joe Curtatone told the News Service. “I appreciate the work the House did. A week before the House bill, we were at zero. We went from zero to a half a billion. While I appreciate that work it wasn’t enough… This is a huge step forward in that direction.”
Curtatone said he was hopeful that the revenue would be enough to enable matching federal funds for the Green Line Extension to his city, and said it would provide a needed investment for transportation through the whole state.
Among amendments adopted by the Senate were proposals to enable transportation agencies to collect more property taxes from private parties using public land, to require better reporting by the MBTA on its capital projects, and requiring the MBTA to gather information from 23 companies that opted against bidding on the commuter rail operations contract after submitting statements of interest.
Among the amendments rejected by the Senate were calls for a larger gas tax hike, for universities to play a greater role in funding transportation through student pass programs, and to eliminate the indexing of the gas tax to inflation. While Hedlund argued against locking the state into incremental gas tax hikes, Senate Transportation Committee Chairman Thomas McGee said the gas tax would be 9 cents higher per gallon if an indexing measure had been adopted in 1991, with each penny of tax worth $32 million.