Pike rescue plan raises questions at Statehouse hearing

July 17, 2008 01:36 PM Email| Comments (0)| Text size – +

By Eric Moskowitz, Globe Staff

The Patrick administration's plan to help out the Massachusetts Turnpike Authority, which is laboring under a crushing $2.4 billion debt, received a lukewarm reception today from the chairman of a legislative committee at a Statehouse hearing.

Senator Mark Montigny, a New Bedford Democrat who is chairman of the Committee on Bonding, Capital Expenditures, and State Assets, said he had questions about the proposal, under which the state would essentially act as a co-signer on the authority's debt. He wondered if the plan could hurt the state's credit rating.

"I'm at best [a] deep skeptic," he said.

Treasurer Tim Cahill said the move might not hurt the state's credit rating, but it certainly wouldn't help it.

Jay Gonzalez, undersecretary of administration and finance, said the bill would not put the state at high risk but would give the authority badly needed help in avoiding a "financial calamity." Gonzalez also said those opposed to the option have not yet proposed alternatives.

The Globe reported Wednesday that the governor is engineering a large-scale financial rescue of the authority.

The House, acting at the administration's request, gave initial approval Tuesday to legislation that would allow the authority to refinance $800 million in debt to avoid potentially ruinous repayment terms. The plan calls for the authority to use the state's higher credit rating to refinance its debt to lower its borrowing costs.

Michael Widmer, president of the Massachusetts Taxpayers Foundation, a business-backed budget watchdog group, said a gas tax increase and tolls on Interstate 93 heading into Boston are needed and inevitable because of the Turnpike's financial problems, even if lawmakers don't acknowledge it yet.