Business Leaders Get Smart on Transportation Funding

Kendall Square
Jun 19 · 5 min read
Photo form WBUR article, courtesy of Boston Fire Department

On Tuesday, June 11th at 6:00 am a Red Line train at JFK/UMass Station derailed, and much of the Massachusetts economy got temporarily derailed with it. For days, our workforce has been experiencing the aftershocks of this event with unpredictable and significantly delayed commutes, increased safety concerns, lost wages for hourly workers, and countless lost hours of human capital as we wait on packed platforms and jammed streets.

As our transit infrastructure ages and capital investment lags, events like this will become more common and their impacts more dramatic. So what’s the solution?

Broad and deep investment in our transportation system.

It is estimated that we need $10 billion to fix the existing MBTA system, not to mention our aging bridges and roadways. And this figure doesn’t begin to expand service or add new stops for people and businesses in transit-poor areas. Where will the money come from?

Representative Robert DeLeo, Speaker of the Massachusetts House of Representatives, has called on the business community to partner with him in solving this problem. He asked the business leaders of the Commonwealth to come together and identify new sources of revenue for transportation that make sense for our economy. Senate President Karen Spilka has issued a similar request.

Three months ago, the leaders of a wide range of business associations began meeting to answer this question. As part of this process, we gathered 80 business leaders for a half-day session we called, “Get Smart Forum on Transportation Funding.” This event was an opportunity for the business community to have access to policy experts and to learn about all of the tools available — big and small — that could keep our economy growing while getting our people where they need to be.

The Tools

The forum, hosted by Biogen in Kendall Square, featured four panels of policy experts from the Massachusetts Taxpayers Foundation, Metropolitan Area Planning Council, A Better City, Transportation for MA, the American Council of Engineering Companies, and the Massachusetts Budget and Policy Center.

These experts offered a wide range of information but they all agreed on three facts:

  1. We can solve this problem — and we don’t need to reinvent the wheel to do it
  2. There is no silver bullet that will meet all of our needs so
  3. We need to look at every tool we have

Below is a brief summary of the tools that were reviewed at this forum:

Congestion Pricing

Congestion pricing uses dynamic pricing to achieve two goals: make our roads work better, while also raising revenue for transportation investments. We can use our existing tolling infrastructure to create variable tolls that respond to demand on our roads and keep traffic flowing. We could charge a one time daily fee for people who drive into downtown Boston.

In Massachusetts, we blame our strong economy and the development that it brings for the worst in the nation congestion that all of us experience every day — but it doesn’t have to be that way.

With congestion pricing policies in place, cities around the world have grown while reducing their C02 emissions and their roadway congestion:

All of the 10 largest metropolitan areas in the United States use some form of congestion pricing — except for Boston. It is estimated that these kinds of policies in Massachusetts could generate anywhere from $250 million in revenue to over $500 million:

Gas Tax

Every state levies excise taxes on motor fuel, including gasoline, to pay for transportation infrastructure. Massachusetts is no exception to this — in fact, this is one of the few areas nationally where we aren’t exceptional. Our gas tax is 24.4 cents/gallon, when you buy gas in Massachusetts you pay a total of 44.94 cents/gallon when you add in federal gas taxes, that total ranks Massachusetts as 29th of the 50 states in gas tax.

Source: American Petroleum Institute: https://www.api.org/~/media/Files/Statistics/State-Motor-Fuel-Taxes-Report-April-19.pdf

It is estimated that for every penny we increase the gas tax we will generate nearly $35 million in new revenue. States like Illinois, Alabama, Arkansas, and Ohio all increased their gas taxes this year — Illinois by nearly 20 cents.

TCI

Transportation is the largest source of greenhouse gas emissions in Massachusetts. Currently, the Baker Administration is leading the charge to implement a regional strategy that would both address greenhouse gas emissions and generate new revenue for transportation. That strategy is called the Transportation Climate Initiative and here is how it works:

  • A partnership of state governments will set a “cap” on pollution that the transportation sector could generate.
  • Allowances will be purchased based on the pollution they cause from the limited pool under the cap.
  • Funds generated from the sale of these allowances will then be “invested” in transportation infrastructure.

This initiative is based on the successful model in the electricity sector known as the Regional Greenhouse Gas Initiative (RGGI). RGGI is a similar “cap-and-invest” regulatory agreement put in place a decade ago to reduce emissions from power plants. RGGI has helped contribute to emissions from power plants being reduced by 40%, while the economies of the states in RGGI have grown faster than the national average. According to Governor Baker’s Commission on the Future of Transportation, this market-based approach to emissions reductions has the potential to raise between $150 and $500 million per year for clean transportation investments.

Join our table

A world class transportation system is necessary to build a world class economy. While the problems we face in Massachusetts can’t be solved by business alone, the impacts of our failing transportation system demand our leadership and commitment, and we need your help.

Join our table of business leaders invested in making a transportation system that works for the Massachusetts economy by reaching out directly to C.A. Webb.

Our Members:

Kendall Square Association, The Alliance for Business Leadership, Newton Needham Regional Chamber, ACEC Massachusetts, A Better City, Climate Action Business Association, Brookline Chamber of Commerce.

Kendall Square

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The official channel for Kendall Square, Cambridge. Published by the Kendall Square Association.

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