By Priscilla Yeon
STATE HOUSE NEWS SERVICE

STATE HOUSE, BOSTON, JUNE 7, 2007

A pair of bills aimed at improving public transportation, and wrought with controversial financing and taxation provisions, competed for attention Thursday at the State House.

Cambridge Democrats urged members of the Committee on Transportation to have state taxpayers shoulder $2.9 billion of the MBTA's $5.2 billion debt so the agency can direct more revenue toward services and prevent additional rounds of fare increases. Meanwhile, committee members received, with some uneasiness, a bill that calls for new taxes to help pay for seven commuter rail projects and address global warming concerns.

Sen. Jarrett Barrios and Rep. Alice Wolf, chief sponsors of the debt-related legislation, said the Legislature's MBTA "forward funding" system, under which the state directs 20 percent of sales tax revenue toward the MBTA, has insufficiently funded the MBTA, which has been bolstering its revenue base with fare hikes and ad revenues.

Barrios said sales tax collections have not met projections in place when the Legislature passed the funding law and the MBTA spends about 30 percent of its annual budget, or $360 million, on debt service. Committee co-chair Rep. Joseph Wagner (D-Chicopee) called forward funding an "unfinished job" in properly addressing the MBTA's finances.

"We need to finish this business because if we don't we will be facing bankruptcy," said Barrios.

Another bill seeking to solve the MBTA's funding problems, co-authored by Sen. Marc Pacheco (D-Taunton) and Rep. Antonio Cabral (D-New Bedford), calls on the state to issue a $2.1 billion bond, raise $175 million in new greenhouse gas "emission fees" levied upon vehicle registration, earmark one cent of the existing gas tax, re-direct existing Registry of Motor Vehicle fees used to pay for Big Dig costs and create local fees to pay for seven projects. The funding would go toward commuter rail improvements to Worcester and Fitchburg, extensions to Springfield, Hyannis, and Lynn, and the South Coast line, along with more parking spaces at station lots.

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After leaving the hearing room, Cabral said he expected members of the committee to raise questions and concerns about such a "comprehensive bill." Pacheco said he expects the committee to make changes and welcomes additional ideas.
In a crowded hearing room with people holding bright yellow signs that said: "Debt relief = fair fares," Jonathan Davis, MBTA general manager and CFO, highlighted the MBTA's financial restraints to deliver service to more than 1 million customers every day.

He said the MBTA depends on sales tax, local community assessments, fare collections and other non-fare revenue to pay for operating and capital investments. Davis said the sales tax revenue "has not met even the most pessimistic minimums anticipated at the time forward funding was enacted."

Davis said the MBTA was left with an accumulated debt of some $4 billion issued prior to July 1, 2000. He said as an analogy, all revenues collected from fares are used to pay for debt service.

"This debt burden is certainly one of the highest for any transit agency in the United States," said Davis, who did not testify either in favor or against the bill and suggested changes to it. He said the authority hasn't been able to address its $2.7 billion backlog in "infrastructure reinvestment and system modernization."

"At some point the backlog needs to be addressed," Davis added.

In response to Wagner's question, Wolf said she estimates her proposal would cost the state $270 million annually and it would come from the state operating budget. "There may be some other ways to pay for that," Wolf added.

Barrios said fixing the T's debt is the state's responsibility. "The MBTA is actually part of the Commonwealth of Massachusetts. This is our debt," said Barrios, adding the T "unfairly" inherited debts associated with the Central Artery Project.

Wagner said he would not separate debt responsibility incurred from the Central Artery Project and the MBTA.

"Public transit is public transit is public transit," said Wagner. He said he agrees the current system is not working and the state needs to fix it. Wagner said he had some concerns about the bill and questioned whether it properly addressed the rest of the MBTA's finances related to operating and capital budgets.

During a press conference prior to the hearing, Carrie Russell, attorney for the Conservation Law Foundation, said the state should look at the MBTA's debt relief first before expanding commuter rail services.

Lee Matsueda, community organizer for the Alternatives for Community & Environment, said riders are not getting the quality service they deserve. He said residents who are on fixed incomes and living in low-income communities are the ones "feeling the impact" of the T's "massive debt."

Wolf told the committee the T's finances had to be looked at first before talks about commuter rail expansions.

"You can do those expansions and the T won't be able to operate those expansions," said Wolf.

"I'm aware of that," responded Wagner.