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CAMPAIGN 2010 | BIG DIG FINANCING

Cellucci, Baker defend 1998 memo on road, bridge costs

By Michael Rezendes
Globe Staff / October 28, 2010

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The Big Dig and Republican Charles D. Baker’s role in the $15 billion project once again roiled the race for governor yesterday, as Baker and aides to Governor Deval Patrick clashed over a memo Baker wrote during his final days as the top budget official under Governor Paul Cellucci.

Baker, during Monday evening’s gubernatorial debate, said he wrote the 1998 memo to his boss at the time, Cellucci. The memo raised red flags about rising transportation costs. “When you write a memo to your boss, you write a memo to raise issues and concerns, which is exactly what I did,’’ Baker said.

Yesterday, Cellucci initially said he did not recall receiving the memo. But later in the day he told the Globe he made his remarks under the mistaken impression that the memo deals primarily with Big Dig costs when, he said, its principal subject is spending on bridge and road repairs.

“The memo has nothing to do with the Big Dig, other than to say, because it’s entering peak years of construction, it’s putting pressure on the road and bridge program,’’ Cellucci said. Cellucci said he had discussed the road and bridge budget with Baker on more than one occasion.

“The point that Charlie knew about the Big Dig cost overruns is just not true,’’ Cellucci said.

The three-page memo, which was addressed to “file’’ and reviewed recently by the Globe, refers to the Big Dig, saying, “Its rate of spending is amazing.’’ It goes on to say that transportation officials relying on federal funding for road and bridge repairs were ignoring a projected deficit in that budget.

Transportation officials, Baker said in the memo, “will propose using these funds to pay for additional road and bridge programming and will only do otherwise if ordered to do so by the governor.’’ In the memo, Baker also said that, after the 1998 race for governor, “someone is going to have to take draconian measures to deal with the transportation spending plan.’’

Baker, in a prepared statement delivered yesterday at the request of the Globe, said: “As Governor Cellucci notes, the memo I wrote was one of many that raised red flags about the overspending within the statewide road and bridge program. I find it amazing that Governor Patrick continues to try and attack me for things that happened 12 years ago when I was secretary of administration and finance.’’

However, Baker’s statement did not answer questions about an apparent contradiction between his memo and a statement he made during a state legislative hearing earlier in 1998, when he addressed concerns about the road and bridge budget, saying, “I don’t see how anybody could argue that the artery will be pulling money away from non-artery projects.’’

During Baker’s tenure as the state’s top budget official, from 1994 to 1998, he had to contend with the Big Dig’s most intense construction years, when project workers were tunneling through downtown Boston. He also had to cope with a drop in federal aid for the project.

To bridge the funding gap, Baker devised a plan to borrow money by issuing so-called Grant Anticipation Notes. The lenders are being repaid through 2015 with federal highway funds that traditionally were used for road and bridge repairs. As a result, the state’s ability to fund those other projects was compromised.

In 2007, a blue-ribbon panel concluded that the state was underfunding its transportation needs by nearly $1 billion a year.

Baker, in a Globe interview earlier this year, said he stands by his Big Dig financing plan. The Grant Anticipation Notes “worked,’’ he said. “They served their purpose as intended. They made it possible to finish the project on an uninterrupted basis. They dealt with the cash flow problem that we would have had otherwise.’’