CLT Update
Friday, August 17, 2001

A new tax increase cry is heard

"I think I have been pretty clear that we won't be raising taxes during my tenure in the governor's office."

Gov. Jane M. Swift
Swift rules out gas tax increases to fund Artery
The Boston Globe
Aug. 17, 2001

Grab your wallets, here they come again!

My goodness, the Big Pig, the Central Artery/Third Harbor Tunnel Project, finds that its price-tag is increasing ... again, will wonders never cease.

When I think back to the '80s when CLT was belittled as one of the doom-and-gloom naysayers for predicting that the project would never be completed for the predicted $2.8 billion, or on time, I could laugh ... if taxpayers weren't being held hostage for the typical and fraudulent manipulations of the pols.

I mean, when is the last time a government project has ever come in on-budget and on time? But this is getting ridiculous!

As Worcester's Telegram & Gazette noted in its editorial "Big Pig" yesterday: "[T]he costs of the Big Dig have soared to heights far beyond our imagination -- from the original lowball guesstimate of $800 million in the early 1980s, to $5 billion in the early 1990s, to $10 billion in 1997, to $13.6 billion last year and now, maybe, to more than $14 billion."

Do you see the storm clouds darkening overhead?

So how are the pols' proposing to bail themselves out of this fiasco? Why with another tax increase of course, as if you didn't guess.

Does anyone out there feel a sprinkle yet?

Increasing the tolls on those who'll hardly ever use the Central Artery isn't enough. We need to raise the tax on gasoline now ... we need more revenue, you know. "Just a penny a gallon," they promise today.

Yeah, but forever.

Open the umbrellas (and your wallets), we're about to be soaked by a cloudburst!

So why not use some of that $1.7 Billion squirreled away in the state's alleged "rainy day" fund, and the additional $500 million-plus Beacon Hill is scrambling to add to it instead of returning this year's revenue surplus to taxpayers as promised?

Oh right, that's "THEIR" money now. They want to spend OUR money, which means raising taxes and taking more of it from us.

If this isn't a fiscal downpour, then what is?

Thank goodness for CLT's "No New Taxes" pledge taken by Governor Swift, and her fortitude to keep it. It's our only life-preserver in this rising flood.

Chip Ford

The Boston Globe
Friday, August 17, 2001

Swift rules out gas tax increases to fund Artery
By Thomas C. Palmer Jr. and Ralph Ranalli
Globe Staff

Acting Governor Jane M. Swift yesterday ruled out raising gas taxes -- even though a key legislator says the increases may be needed to cover escalating costs on the Big Dig.

"I think I have been pretty clear that we won't be raising taxes during my tenure in the governor's office," Swift said in response to a suggestion made Wednesday by Representative Joseph C. Sullivan, a Braintree Democrat who is cochairman of the Legislature's Transportation Committee.

Swift's predecessors, Governors William F. Weld and Paul Cellucci, also Republicans, both had ruled out tax increases as well. But then the public cost estimates for the Central Artery/Ted Williams Tunnel never went beyond $10.8 billion.

The project is now estimated at $14.4 billion or more, and managers appear less certain than ever that the cost won't climb further.

Sullivan's Senate counterpart, Senator Robert A. Havern 3d, blasted Swift and Big Dig management yesterday, saying they had not adequately addressed the cost overruns.

"This project is out of control," said Havern, an Arlington Democrat and Sullivan's cochairman on the Transportation Committee. "It's like a drunk. The worst thing you can do is either buy them another drink or hand them some cash."

Swift also said that better management is needed by the public officials and the private consultants who answer to J. Richard Capka, chief executive officer of the Massachusetts Turnpike Authority.

"I have directed Rick Capka that they should be looking for efficiencies within the Big Dig and minimizing the impact to toll-payers and taxpayers of Massachusetts," Swift said.

"I think he needs to do a thorough review and figure out how he can achieve cost savings within the Dig -- to try to control the costs that are within his power to control," she said.

She added: "I am ruling out any new taxes."

With project cost estimates having increased $300 million or more this summer, and with turnpike users unhappy about an impending increase in tolls, Sullivan said this week that the Swift administration should consider increasing the state's 21-cent gas tax.

"If the administration's position is no new revenue streams, then we await their plan," Sullivan said yesterday. "When the governor talks about 'they,' the Turnpike Authority, I hope she realizes that 'they' is her. This administration appointed the Turnpike Authority."

Havern said Swift should consider replacing Big Dig managers with people who can control costs and give the public a reasonably accurate figure for the final cost.

The project is managed by Bechtel/Parsons Brinckerhoff, a joint team of noted design and construction consultants.

"I'd feel better if somebody told me Bechtel won't get paid until the last vendor is paid," Havern said. "They haven't been right on an estimate yet."

Havern said Swift should come up with a plan to pay for the current overruns and any additional costs that come up in the final 3 1/2 years of construction.

"If it's raising tolls to $7, let her tell us that," Havern said. "We'll have our opinion."

"The Weld-Cellucci-Swift administration have been managing this project for 11 years," Havern said. "Let me hear their solution to a shortfall of what may be another billion dollars."

The Boston Globe
Thursday, August 16, 2001

Key legislator considers boost in gas tax
Money would fund Big Dig overruns

By Thomas C. Palmer Jr.
Globe Staff

To cover the rising cost of the Big Dig, the state needs to consider increasing the gas tax and restructuring the Turnpike Authority's tolls, the co-chairman of the Legislature's transportation committee said yesterday.

"We're in a predicament that's going to take some additional creative thinking," said Representative Joseph C. Sullivan, committee co-chairman and a Braintree Democrat.

"There needs to be an acknowledgment from the administration that a gas tax needs to be discussed," he said. "I would not be promoting a gas tax, but I don't think the subject can be considered taboo."

Sullivan, an influential figure in state transportation matters, said that turnpike tolls -- already scheduled to rise in January to help pay for the project -- should be restructured for fairness. He said that discount programs for toll-payers, similar to the discounted monthly passes offered to MBTA riders, would ease the burden on tunnel and Turnpike Extension users.

There are no concrete plans for changes in the gas tax or the toll structure. But Sullivan's willingness to discuss such controversial subjects reflects the increasing concerns of public officials faced with 3 1/2 more years of construction and a price tag expected to continue to rise.

Sullivan made his comments, in light of reports this summer of three increases of $100 million, bringing the project's total cost to as much as $14.5 billion.

Sullivan said he and other transportation officials will meet with Turnpike Authority chief executive J. Richard Capka on Monday to try to develop ways to make tolls fairer.

Turnpike officials and their state's private management team, Bechtel/Parsons Brinckerhoff, will be called to a legislative hearing on Sept. 18 to answer questions about cost increases that never seem to end, Sullivan said.

He called for tougher oversight of Bechtel/Parsons, with a goal of avoiding any unnecessary future cost increases.

"This management by disclosure is not the answer," Sullivan said. "It's a new number every day."

Richard Dimino, president of the Artery Business Committee, yesterday approved Sullivan's idea of raising the gas tax to pay for the overruns.

He also suggested adjusting turnpike tolls so they are higher during peak-use periods than at other times, and possibly charging drivers for the use of the Central Artery itself.

"The gap in revenue for additional costs of the Central Artery project is going to require some ambitious thinking," Dimino said. "Are there other legs of the highway system that operate without tolls that technology will allow us to look at in the future?"

Sullivan, however, said putting tolls on I-93 to spread around the pain of paying for the Big Dig is probably not possible in the near future.

On the question of the gas tax, Dimino said that with gasoline prices falling and still low compared to some past years, now may be the time to increase it. "Not only as it relates to the Central Artery but to the larger picture of transportation projects, I think we're nearing the time to seriously consider an increase," Dimino said. He quickly added: "A modest increase."

The state gasoline tax, last raised in 1991, is 21 cents per gallon. Sullivan said a 1-cent hike in the tax would raise about $30 million a year in cash. If the state borrowed money to be paid back with that extra gas tax revenue, even more money could be raised for transportation projects.

The Turnpike Authority is paying about $2 billion of the total cost of the project -- which is now officially $14.4 billion -- and the planned toll increases would hit cities and towns near the toll plazas particularly hard. Residents at public hearings last week in Winthrop and Framingham unanimously opposed increases, saying they were being unfairly singled out to pay for the Big Dig.

Sullivan said that a gas tax increase has been an option for years but was rejected by the administration of then-governor William F. Weld in 1997.

"The gas tax was clearly discussed," Sullivan said. "The administration said no. Weld said, 'I will not sign a gas tax.'"

The estimated cost increased from $10.8 billion to $14.1 billion last year, after top Big Dig managers were dismissed for withholding news of cost growth from the public. Turnpike officials then increased their estimate by $300 million early this summer.

The Globe reported this week that an independent consultant's estimate has added another $100 million to that total.

The federal government originally planned to cover about 85 percent of Big Dig costs. But in 2000, after years of skyrocketing costs, the federal share was capped at about $8.5 billion, or just under 60 percent of the total.

In the current Big Dig financial plan, Turnpike Authority toll payers are scheduled to cover 8.7 percent of Big Dig costs. Additional Turnpike Authority contributions, from sources such as land sales, bring the authority's share to 12.5 percent.

The Commonwealth of Massachusetts is paying for 22.3 percent of the project, in the form of taxes or fees. "The bottom line is the balance sheet," Sullivan said. "There's an expense side that we know is rising. You need to offset that on the revenue side."

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