Patrick raises state's bond cap
Critic says hike will increase taxes
Governor Deval Patrick is raising the state's borrowing limit, saying that Massachusetts needs to be able to raise more money for transportation projects, public safety improvements, and repairs to the university system, beaches, and parks.
The so-called bond cap, the amount the state can borrow each year to pay for capital projects, will increase from $1.25 billion to $1.5 billion. The last time the bond cap was raised was in 2002.
"Our public assets have endured a long period of neglect that has put many of them in serious need of repair," Patrick said. "We must begin reversing that pattern."
Patrick made the announcement ahead of the release of his five-year capital plan, which is typically used to pay for bigger projects outside the regular state operating budget.
The governor has already proposed some ambitious, big-ticket projects, including a $1.4 billion commuter rail line from Boston to Fall River and New Bedford.
The administration can change the cap without legislative approval, but Wall Street pays close attention and will punish the state with high interest rates if borrowing gets out of control.
Raising the bond cap drew immediate criticism. Barbara Anderson, executive director of Citizens for Limited Taxation, said doing so will lead to higher taxes.
"If we borrow too much and spend too much, we end up raising taxes to cover it," she said.
But Patrick said that even with the extra borrowing, the percentage of the budget the state will be spending to cover the debt in 2012 will be smaller than in 2007.
Two recent reports found that the state is facing huge deficits to maintain its existing infrastructure.
One, by the Boston-based Pioneer Institute, found the state is facing at least $17 billion in immediate deferred maintenance costs, from roads and bridges to jails and universities.
Earlier this year, a blue ribbon commission forecast a budget shortfall of up to $19 billion over the next two decades to maintain the state's roads and rails, with no additional money to expand transportation systems.
