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Transportation Plan Would Lead To Sales Tax Hike

This article is more than 10 years old.

The Massachusetts Senate and House approved a transportation reform bill Thursday that would sidestep an immediate increase in Turnpike tolls, MBTA fares and the state's gasoline tax and all but assured a 25-percent increase in the sales tax.

Under the proposal, the Massachusetts Turnpike Authority would be abolished as of Jan. 1. The Massachusetts Port Authority and Massachusetts Bay Transportation Authority would remain intact, but nearly all other state transportation functions would be consolidated under a new Massachusetts Department of Transportation.

Massport would be tweaked by shifting its Mystic Tobin Bridge to the new department as of Nov. 1, while lucrative perks at the MBTA would also be scaled back. The transit agency's employees and retirees would be forced into the state's group insurance program as of Jan. 1. T workers in many cases would also have to pay the same insurance premiums as other state workers, and future employees would lose a pension provision that allows current workers to retire when they have 23 years of service.

The future T employees will be able to retire only after they work for 25 years and reach the age of 55.

In addition, the plan calls for consolidating Troop E of the state police, which has operated semiautonomously as it patrols the turnpike, into the remainder of the agency.

Members of the conference committee projected the overhaul could save taxpayers $6.5 billion over 20 years, in part by consolidating planning, oversight and back-office operations such as accounting and legal services.

"It is reformed. It is rebuilt. It is renewed," said Sen. Steve Baddour of Methuen, a Democrat who co-chairs the Joint Committee on Transportation. "The transportation system going forward is a much better transportation system than the one we have today."

Critics complained on procedural grounds, saying the final bill did not include turnpike worker provisions that had been included in bills previously approved by the House and Senate.

The bill includes no financing mechanism, but the conference committee completed its work Wednesday in tandem with a similar panel working out differences between fiscal 2010 budgets proposed by Gov. Deval Patrick and the House and Senate.

The budget panel is expected to complete its work Thursday, and members were expected to vote on a budget Friday that called for increasing the sales tax from 5 percent to 6.25 percent. A percentage of the new revenues - estimated at $600 million to $900 million annually - will be used to stave off a turnpike toll increase slated for July 1, as well as any immediate hike in subway, bus and commuter rail fares.

The budget will take effect July 1, although the sales tax would not take effect until Aug. 1. The budget deal is also expected to implement a 5 percent tax on satellite TV, end the sales tax exemption for alcohol and allow cities and towns to levy their own hotel tax of up to 2 percent as of Aug. 1. A provision allowing cities and towns to levy their own meals tax of up to 2 percent would take effect Oct. 1.

"We appreciate the movement on this critical piece of the governor's reform agenda," Patrick spokesman Kyle Sullivan said in a statement. "We look forward to analyzing it to determine whether it meets the long-term needs and interests of the commonwealth."

One possible sticking point for the administration was the provision eliminating the so-called "23-and-out" pension only for future employees.

Legislators said that would conform with court cases outlawing changes for people already paying into a pension system, but a pension overhaul Patrick signed into law Tuesday for the rest of state employees applied to both current and future workers. The Harvard Law School graduate said he was confident the new law could withstand legal challenge.

Otherwise, the bill appears to meet many of the criteria he laid out in a confidential May 7 letter he sent to the transportation conferees.

In the letter, obtained by The Associated Press, Patrick said, "Any final bill must result in a system that is simpler, accountable and regionally equitable, and that saves money."

He demanded a small board led by a gubernatorial appointee, which the new MassDOT would be. He also sought an integrated work force, a reduction in health benefits for current and future employees, the integration of the state police, consolidated MassDOT control over nearly all bridges, support for existing bond obligations and legal tort reforms.

A presentation released Thursday morning by the conference committee showed the new plan covering most of those points.

This program aired on June 18, 2009. The audio for this program is not available.

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