Proposed Transit Reforms May Drive Up Costs

When the Massachusetts Senate approved a hike in the sales tax this week, it earmarked $275 million for spending on transportation. The state's system is in debt and disrepair and both the House and Senate have proposed measures to fix it.

Members from both chambers are currently hammering out final details of a major transportation reform package.

A key goal is save money over time, but a growing number of transportation experts are worried that the reform bill might actually end up costing the Commonwealth more money.

WBUR's Meghna Chakrabarti spoke with Deborah Becker about the transportation system and proposed reforms.

The House and Senate are now discussing their transportation reform bills in conference committee. Both bills proposed consolidating state transportation agencies into one super-authority that would be more efficient, but there are concerns that it might end up costing more?

MEGHNA CHKRABARTI: Right. Back in 2007, the Transportation Finance Commission identified $2 billion in cost savings with the greatest part of those savings in personnel — in other words, reducing the workforce, lowering wages, or trimming benefits. The problem now is that neither the House nor the Senate bills as they currently stand specify how many transportation workers they would cut. On top of that, the bigger worry is that the consolidation might actually have the effect of increasing wages overall.

Why is that?

CHKRABARTI: Both bills call for the Massachusetts Highway Department and the Turnpike Authority to be fused into one agency, as you mentioned. The problem is, engineers, for example, get paid more at the Turnpike Authority than they do at the Highway department — sometimes thousands more for the same type of job. Each agency has its own unions, so if you bring everyone under one roof, theoretically, you could save money by leveling wages downward. But Mike Widmer of the Massachusetts Taxpayers Foundation says that's wishful thinking.

"It would have the opposite effect, namely driving the highway department wages up closer to the Turnpike Authority wages, and in the end we'd be paying more through this transportation reorganization," Widmer said.

The problem, Widmer and others tell me, is that unions have no incentive to bargain down, of course. And the specifics around collective bargaining in the new super-agency just aren't clear. Also, by not specifying how many jobs the state would cut in this big consolidation, we could end up in a situation where we have the same number of employees getting paid more.

We've heard a lot about benefits. Governor Patrick has called for MBTA employees to be pulled into the state health care plan. Wouldn't that be one way to help cut costs?

CHKRABARTI: Yes, it would. However, the House and Senate reform bills are actually divided on that. The House wants to pull all MBTA employees into the state Group Insurance Commission. The Senate just calls for a feasibility study. Beyond that, there's a tremendous long-term issue of retiree health care benefits, specifically at the MBTA. Right now, T retirees don't pay anything for "preferred provider" plans — or PPOs. Finance experts say, if retirees were moved into an HMO plan and had to pay some kind of premium, it could save the state $1 billion over the next 20 years. But right now, both neither reform bill tackles this issue.

How about the actual condition of roads and bridges. Any cost savings there?

CHKRABARTI: This was really interesting. You'd think with all our transportation agencies under one roof as these bills propose, we'd have a more streamlined planning, bidding and construction process that could actually save money. But people in the construction industry are worried that the exact opposite might happen — that a super-agency might be less efficient than some of the agencies we have now. For example, Mass Highway has reduced the time it takes to award contracts from 200 days down to 50 days. John Pourbaix of Construction Industries of Massachusetts says they're worried that a new super-agency might take longer to award bids.

"Our industry is a very capital intensive one," Pourbaix said. "We like to know exactly when, and how much it's going to cost. Without that certainty, the industry has to put in protections to protect itself."

How would that affect costs?

CHKRABARTI: Well, contractors say they'd be forced to push their bid prices up to account for uncertainties in future materials costs. Meanwhile, Pourbaix' concern centers around the governing structure of the proposed super-agency. The House reform bill calls for a 5-member surface transportation board. The senate wants an 11-member board to run the agency. There are worries about accountability and inefficiencies that might come through political infighting, which we've already seen, for example, with the Turnpike board.

Speaking of the Turnpike Board, State Transportation Secretary James Aloisi is the head of that board. He has said that the Pike is going to raise tolls on July 1st if some kind of reform and revenue package isn't before the governor. So, basically the clock ticking.

CHKRABARTI: It is. Not only do drivers face a toll increase, but the MBTA says riders could face severe service cuts and fare increases as well. So lawmakers are feeling the pressure to enact significant reforms and come up with new revenue. Senate and House leadership and transportation committee members didn't respond to my interview requests. It's important to note that the two transportation bills we've been discussing are still in conference committee and everyone I spoke with — lobbyists and advocates who are in contact with lawmakers — also said they feel "hopeful" that their concerns have been heard.

What does it look like in terms of a looming solution, is there one?

CHKRABARTI: Yes there is. Even though this is an incredibly complicated issue, it seems that everyone I've spoken with say the solutions rest around dealing with personnel, collective bargaining, health care benefits and the number of employees working for transportation agencies.