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February 13, 2024

Healey doesn't rule out new or increased taxes to fund transportation efforts

A train parked at a station Image | Courtesy of MBTA An MBTA Commuter Rail train at Boston Landing station on the Framingham/Worcester line

While a new panel of government officials, transportation activists and commuters prepare for another round of investigation into how the state should fund roads and transit, Gov. Maura Healey will keep an open mind -- including around the possibility of new or increased taxes.

Healey neither embraced nor ruled out the idea of pursuing new tax or fee increases to generate more money for the state's transportation sector, a white whale for some lawmakers and advocates that has long been debated but rarely achieved. Instead, she told reporters Monday that she will "wait to see what the task force comes to me with in terms of recommendations."

"I'm not going to comment on hypotheticals until I see things, but what I'll say is I think as governor, I have not been afraid to take this head on," she replied when pressed on how she would respond if the panel explicitly recommends expanding taxes. "This administration is not going to be about kicking the can down the road, which frankly is what has happened for far too long. Years, years, decades, right? It's why we're in the hole that we have been in that we're digging out of."

Healey proposed a string of new funding injections toward transportation needs in her fiscal year 2025 state budget bill, which she highlighted Monday at a press conference at North Station. She also convened a new task force that will be asked over the next year to recommend a long-term plan for making -- and paying for -- the necessary investments.

Transportation funding has long been a thorny topic on Beacon Hill, driven by MBTA budget gaps and service disruptions, local calls for more road and bridge funding, and the expectation that gas tax revenue will decline as motorists shift to electric vehicles.

A broader "Commission on the Future of Transportation" in 2018 rolled out more than a dozen recommendations to improve the sector, starting with prioritizing investment in public transit. In March 2020, the House approved a package of tax and fee increases that Democrats estimated would generate more than half a billion dollars per year for transportation needs, but the measure died as the pandemic took hold without a vote in the Senate, and legislative leaders have mostly avoided reopening the debate since then.

Healey and her deputies argued Monday that their panel, which will host its first meeting before the end of the month, will break new ground.

"We are taking this on in a way that no one has before. This transportation finance committee -- this is really looking at how we engage people who have not been at the table around this," Transportation Secretary Monica Tibbits-Nutt said. She added, "We are going to be talking about all of the options, but at this point, if we had the answer, we would've already used it to help fund the T."

The panel's eventual conclusions could prove key in how Beacon Hill responds to steady financial pressures at the MBTA.

Agency officials are staring down what T Chief Financial Officer Mary Ann O'Hara dubbed "the fiscal cliff," driven by sluggish ridership in the wake of COVID-19, the costs of Big Dig-era debt assigned to the MBTA, and decades of underwhelming growth in the state sales tax that helps fund the agency.

Budget-writers project the T faces an operating budget gap between $567 million and $652 million in fiscal 2025. Larger shortfalls loom in subsequent years, and the most pessimistic projection estimates the chasm could grow to more than $900 million by fiscal year 2029.

MBTA officials believe they can navigate the fiscal 2025 budget by combining a final tranche of pandemic-era federal aid, smart spending decisions and Healey's push for increased state support. But it's still not clear how they will address the same problems in fiscal 2026 and beyond.

Asked about state government's role helping the T navigate its financial crisis in the short term, Healey pointed to the money for the agency in her budget bill.

Her proposal would increase operating assistance for the T by $127 million and direct $45 million toward the costs of launching a new reduced-fare option for low-income riders. It would also use some surtax revenue to backstop $1.1 billion in borrowing over five years, which Healey wants to tap to invest significant money in MBTA track improvement.

"We have not seen this level of support in over a decade," MBTA General Manager Phil Eng said.

MBTA officials have been voicing optimism in recent months about turning a corner at the agency after a blistering federal investigation flagged numerous safety problems and the sudden emergence of slow zones hampered travel. Eng said the T has "a long way to go" but is "making important progress."

Jarred Johnson, a veteran transit advocate who has long argued for new MBTA funding and called out the T's failures, joined Healey and Eng at Monday's event to praise what he described as an "incredible shift in the agency's trajectory."

"Governor Healey's budget is a great downpayment on rebuilding the MBTA's capacity, both on fixing critical infrastructure and delivering more service," he said. "This important increase to the operating budget helps avoid dire service cuts."

The T is also on the verge of launching a new discount program for low-income riders who do not qualify for one of the existing reduced-price options, an idea that has been floated since at least 2017.

Taking a different approach, Boston Mayor Michelle Wu's office announced last week that the city would tap into its own pandemic relief funding to keep three T bus routes running free of fares into 2026.

Healey said Monday that she supports the city's move while signaling there might not be much appetite for replicating the fare-free model more widely.

"It's just about the dollars," she said. "I saw that the mayor is going to continue with the program using some [American Rescue Plan Act] funding that is available. I think that's great, I support that. The question is, what can you do statewide? When you sit in our shoes, you have to look at the reality of the operating budget and where revenue sits within that, in terms of fares."

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