Governor’s speech, $3.8b bridge proposal seek to calm economic jitters
(AP Photo/Josh Reynolds)
By Matt Viser, Globe Staff
CAMBRIDGE -- Governor Deval Patrick tried to calm fears of a looming recession with a speech today that highlighted the strengths of the Massachusetts economy and outlined his $3.8 billion bond proposal to put people to work by repairing 411 deteriorating bridges.
While emphasizing restrained spending and budget cuts, Patrick also warned that government must take action that will move the state's economy forward.
“By acting now, we can cut that deficient bridges backlog in half in eight years, avoid construction inflation, and create thousands of jobs,” Patrick said. “Our plan to address deficient bridges will have shovels in the ground and people at work in 90 days.”
The address at MIT's Sloan School of Management was the first economic outline Patrick has presented since the Legislature defeated his plan to create tens of thousands of jobs by licensing three casinos around the state. House Speaker Salvatore F. DiMasi and Senate President Therese Murray attended the speech, giving at least symbolic support to the governor’s plan.
Patrick also announced the creation of 16 regional districts throughout the state where his administration will help streamline new developments, a plan based on the redevelopment of Fort Devens in Ayer.
The massive repair and reconstruction of bridges in virtually every corner of the state would create 23,000 direct construction jobs, according to a preliminary draft of the governor's plan, which is significantly higher than the 5,000 employed at the height of the Big Dig.
The move could prove controversial. It would add to a state debt burden that is already the highest per capita in the country. Patrick plans to pay for the projects by floating bonds in the next eight years, which would need legislative approval and would renew debate over how deeply the state should go into debt, and how vital the bridge repairs are.
There are already several other major bond projects before the Legislature, including $2 billion targeted for higher education and $1.4 billion for environmental projects. In addition, a $3.5 billion transportation bond bill that the House approved Tuesday would help fund 397 additional bridges.
Lawmakers, reacting with caution Tuesday in advance of Patrick's speech, said they will closely scrutinize the proposed debt plan -- but the idea of spreading money in legislative districts around the state for safety projects is sure to have a certain political appeal.
"My initial reaction is actually very favorable," said Senator Mark C. Montigny, a New Bedford Democrat and chairman of the Joint Committee on Bonding, Capital Expenditures, and State Assets, who normally opposes similar bonding plans. "It's dealing with a public safety issue where there could be great peril if we don't deal with it."
The administration argued that embarking on the projects now will save money in the long run, because construction costs are escalating. The borrowing plan would front-load state indebtedness, resulting in an accelerated schedule for new debt that would restrict the ability of future state leaders to borrow, according to sources briefed on the proposal by administration officials.
"The governor has put forward a thoughtful proposal to help finance a reconstruction of the state's bridges," said David Guarino, spokesman for House Speaker Salvatore F. DiMasi, who was briefed on the proposal Tuesday. But, he added, DiMasi will "fully analyze it and look at the financial impact it may have on our bond rating and future capital projects."
Fixing bridges has been a perennial problem in Massachusetts, which has one of the oldest transportation infrastructures in the nation, with 200 bridges that were built in the 19th century.
The Globe reported in August that approximately 10 percent of the 5,500 bridges in Massachusetts are classified under federal standards as "structurally deficient," including 65 well-traveled bridges with such serious defects that they may need to be replaced. The Longfellow Bridge over the Charles River is among the most high-profile of the spans, as well as the Merrimack River bridge in Haverhill and the bridge that carries the Fitchburg commuter rail over Route 62 in Concord.
The Pioneer Institute last year released a report titled "Our Legacy of Neglect," documenting a lack of funding for transportation infrastructure in Massachusetts.
There are 608 structurally deficient bridges right now, according to state officials, but that figure grows each year. Under the governor's proposal, and current spending plans, 808 bridges would be repaired over the next eight years, bringing the number of structurally deficient bridges down to 450. If no work were done over the next eight years, there would be 1,264 problem bridges.
The debate over fixing bridges will come at a time when the state has been struggling to find enough sources of new revenue to keep existing services and fund several ambitious spending programs. The state is facing a budget gap of $1.3 billion. DiMasi yesterday postponed a much-anticipated debate on Beacon Hill over several tax proposals that are intended to help balance the budget.
Amid a flurry of last-minute lobbying and uncertainty over vote counts, DiMasi put debate off until Thursday on whether to implement $379 million in tax increases on smokers and the state's largest corporations. The House was expected to vote on the plan Tuesday, but business leaders and a cadre of Republicans offered a preemptive strike in the debate around noon, charging that the plan would hurt businesses amid a looming recession.
"We have a fundamental problem with the timing, scope, and nature of the bill," said the House minority leader, Bradley H. Jones, a North Reading Republican. "This tax package will be nothing but the death knell for the state's economy."
The proposals would tighten corporate tax laws -- bringing in $204 million next year -- and would raise $152 million by increasing the state's cigarette tax by $1 per pack. The cigarette hike would give Massachusetts the second highest cigarette tax behind New Jersey, although New York is planning to trump both states with a $2.75-per-pack increase.
DiMasi outlined the proposals two months ago in an effort to compromise with Patrick, who since taking office last year has called for closing so-called corporate tax loopholes.
Patrick and DiMasi have both backed a plan to tighten the corporate tax codes, but they have significant differences over how deep corresponding reductions in corporate tax rates should be.
Overall, DiMasi's plan would mean that businesses would pay about $204 million more next year, but by 2011 would be back to what they pay now. Because Patrick's plan does not lower the tax rate as quickly or dramatically, businesses would still end up paying $280 million more once his plan is fully implemented in 2012.
