State House News Service
Tuesday, February 22, 2000
MTF's Big Dig-Plus Plan Involves
more Borrowing, Gas Taxes, Fees
By Elisabeth J. Beardsley
STATE HOUSE, BOSTON, FEB. 22, 2000 ... With a fiscal watchdog
group warning the state needs to plan for even more Big Dig cost overruns, Gov. Paul
Cellucci today insisted that the recent $1.4 billion spike in the price tag is the
"worst case scenario."
The Cellucci administration's plan for addressing the overrun --
referred by the House this morning to the Transportation Committee -- pulls together
precisely $1.4 billion, mostly through borrowing, but doesn't address the potential for
cost increases beyond the project's revised $12.2 billion price tag.
Massachusetts Taxpayers Foundation President Michael Widmer said
today that the state needs to be thinking in terms of a $2.5 billion plan that would
include contingencies in the event of further overruns, and would also address
shortcomings in the statewide road and bridge repair program.
Speaking to reporters on his way to the weekly leadership meeting,
Cellucci said the mammoth project is two-thirds complete and construction problems -- like
the ones in Fort Point Channel that contributed to much of the current overrun -- are
"less likely" from here on out.
"I think the $1.4 billion is kind of a worst-case
scenario," Cellucci said. "Let's not put more money on the table so the people
who are building this thing can find other ways to spend it. Let's not try to create
something that's not going to happen."
Responding to comments from US Rep. Joseph Moakley that the
federal inspector general thinks the price could go as high as $15 billion, Cellucci said,
"I don't know where they're coming up with those numbers." Keeping the project
on track is the best way to avoid increases, he said.
But Widmer said the state should "deal with this once and for
all." As a "possibility worth exploring," Widmer proposed borrowing $2.5
billion, which would cover the $1.4 billion overrun and create a $500 million contingency
fund to cover unanticipated costs in the future. The remaining $500 million-plus could be
used to bolster local infrastructure projects, he said.
"They have focused on the shortfall alone," Widmer said.
"What we're saying is that we think it's best to deal with the overall transportation
problem and take advantage of the strong economy and the strong revenues to try to deal
with this once and for all."
Widmer estimated that the debt service on $2.5 billion would be
between $225 million and $250 million per year. The debt service could be paid for through
a combination of reinstating all Registry of Motor Vehicle fees and dedicating four cents
of the existing gas tax to the Central Artery, Widmer said. The former would raise $100
million; the latter would raise $120 million.
"We're saying that the state is in a strong economic
position, and that the kinds of revenues we're raising to support this program, while
politically difficult, do not require additional taxes and are standard ways of paying for
highways," Widmer said.
On the gas tax, Cellucci said, "I'd be willing to take a look
at that, but if you take it, something else has to make up its place. I'm sure it's
already being applied somewhere."
House Speaker Thomas Finneran (D-Mattapan), said the MTF proposal
is buttressed by a history of "taking credible and responsible positions" and by
a sense among lawmakers that "piecemeal solutions" are a bad idea. Finneran said
he doesn't know whether the $1.4 billion overrun is the full extent of the problem, but he
said the goal should be to address the "totality of it."
"To come back in another year to the taxpayers and motorists
of Massachusetts and say, 'Oops, we missed it in the year 2000, this time we think we're
closer to the mark' -- that doesn't add any credibility to the institution," Finneran
said. "It's very, very important that we show and demonstrate institutional capacity
While approving of the governor's decision to reinstate drivers
license fees, Finneran indicated that other auto fees might also have to be brought back.
House Ways and Means Committee Chairman Paul Haley (D-Weymouth) last week told
Administration and Finance Secretary Andrew Natsios that Registry fees or an equivalent
revenue stream had to be put on the table. "We think there may be another step to
take on license and Registry fees," Finneran said.
Finneran also said he's considering an "intelligent use"
of the state's surplus, estimated at between $200 million and $500 million, as a way of
filling the Big Dig's funding hole. "Some type of very intelligent use of whatever
this year's surplus number might be might allow us to demonstrate to Wall Street as well
as to the federal authorities that we're serious and we're sober and we're capable of
solving this problem," Finneran said.
Finneran said he needs to consult with the members of the House
Ways and Means and Long Term Debt committees, Senate President Thomas Birmingham, the
administration and Treasurer Shannon O'Brien. Together, he said, they will "pick a
number" as a surplus estimate.
"If you had a particular number, how do you best use
that?" Finneran said. "Do you use it as a cash payment on the gap that was
revealed, or do you set it aside and commit yourself to living off the interest and use
that interest to support a bond? I don't have any particular ideas at the moment, and
those that I have, I'm not sharing with you today."
Massachusetts Teachers Association
Tuesday, Feb. 22, 2000
MTA Releases Education Reform "Blueprint"
Cellucci Tax Cut Would Damage Schools
Gorrie said that the greatest threats to the second phase of
education reform are two massive tax cuts that will appear on the November ballot coupled
with huge cost increases from the Big Dig. The first tax cut, supported by Gov. Cellucci,
would roll back the state income tax to 5 percent at an annual cost of $1.2 billion. The
second, the so-called "Free the Pike" initiative, would require the state to
reimburse drivers for toll fees and auto excise tax expenses at an annual cost of $750
To put these two ballot initiatives in perspective, an annual
state revenue loss of nearly $2 billion is equal to more than two-thirds of state
education aid to local school districts -- spending that totaled $2.8 billion in fiscal
"Public schools and higher education are among the first
services to be cut whenever the state has a budget crisis," said Gorrie. "And if
these tax cuts are enacted, a budget crisis is inevitable.
"If Gov. Cellucci wants to be remembered as 'the education
governor,' he must explain how students will be able to meet higher standards with fewer
resources," Gorrie continued. "Just setting the bar higher won't do it. Through
this Blueprint, teachers are expressing their views about what resources and strategies
are needed. We entered this profession because we care about students and care about
education. We intend to speak loudly and work hard on behalf of the nearly one million
Massachusetts students we teach each year."