By the Associated Press, 04/12/00
BOSTON - The Senate today announced a $2.4 billion plan that would use driver's license fees and most of the expected budget surplus to pay for the latest Big Dig cost overruns.
Gov. Paul Cellucci said he liked the Senate proposal, calling it an improvement over his own administration's plan to cover cost overruns of a project federal officials now say could cost around $13.6 billion.
Cellucci's endorsement will speed approval of a state plan to pay for the overrun that the federal government requires by the end of the month.
The process of coming up with a Big Dig bailout was thrown into disarray Tuesday, when a federal audit said the state would need to come up with as much as $1.9 billion to cover overruns.
Lawmakers and the Cellucci administration had been using a $1.4 billion estimated overrun as they worked to devise financing plans in time for the federal deadline.
The federal deadline was set -- and the federal audit launched in February -- after Big Dig project officials failed to report the $1.4 billion overrun to federal transportation officials who were overseeing the project. The audit that was released Tuesday criticized project managers for attempting to hide cost overruns, and Cellucci fired project head James J. Kerasiotes.
The Senate plan would raise about $600 million from $33.75 license renewal fees that drivers have to pay every five years. The fee was slated to be phased out this year.
"If the Legislature passed the plan that the Senate put out, I would sign it," Cellucci said.
The House devised its own plan last month, but it relied more on short-term borrowing than the Senate plan. The two houses will have to reach a compromise before a version is sent to the governor for approval.
A key difference between the two chambers is the House plan calls for reinstatement of $30 registration fees that car owners would have to pay every two years, in addition to the license renewal fee. The Senate plan calls only for the license fee.
Like the House, the Cellucci administration's proposal relied more heavily on borrowing than the Senate plan.
The Senate plan would pay for $500 million over the next five years in road and bridge work around the state, a key provision for those who said other projects would be delayed because the Big Dig was draining construction resources.
"Everyone knows the statewide road projects are being compromised by the enormous cost of the Big Dig," said Senate President Thomas Birmingham, D-Chelsea.
The Big Dig -- or as it is officially known, the Central Artery/Third Harbor Tunnel Project -- will construct a three-mile highway beneath downtown Boston.
The Senate plan also uses $500 million from the state's surplus and $150 million from money reserved for capital projects to buy back old debt on which the state was paying high interest.
That buyback of high-interest debt is expected to save the state nearly $700 million over the next five years.
The Senate plan also calls for $800 million over the next five years directly from the state budget; $200 million from the Massachusetts Turnpike Authority; and $65 million from MassPort.
Even as he spoke Wednesday about the newly risen Big Dig cost projection, Cellucci repeated his support for a cut in the state income tax from the current 5.85 percent to 5 percent by 2003.
Cellucci said the tax cut, which will be on the ballot in November, would spur more than enough economic activity to offset the expected $1.4 billion decrease in state revenues.
Birmingham said the proposal would hurt efforts to improve education and health care within the state. He called the governor a "zealot" for sticking to the tax cut pledge despite overrruns at the Big Dig.
"Nobody gets a chapter in `Profiles in Courage' for promoting a tax cut," Birmingham said. "It's the easiest thing politically to do."
Former Big Dig chief James Kerasiotes.
New Big Dig chief Andrew S. Natsios, former state Administration and Finance Secretary.
