Greater than expected motor vehicle sales tax receipts helped carry transportation funding in fiscal year 2014 as other anticipated revenues failed to materialize and expenses outpaced projections, according to a report released Thursday.
Less than two years after the Legislature raised gas and tobacco taxes to help support transportation and other spending areas, record levels of snow have recently swamped the MBTA and slowed traffic to a crawl, bringing renewed attention to transportation system financing.
When the Legislature wrote the 2013 tax law aimed at financing transportation, it sequestered sales tax revenues from motor vehicle purchases to be used exclusively for transportation spending, expecting $129 million from the revenue stream. The actual revenues were $161 million, helping to make up for the lack of any gaming revenue, after lawmakers anticipated $25 million in gaming receipts, according to the report from Transportation for Massachusetts.
In fiscal year 2015, which ends June 30, it is likely that motor vehicle sales taxes "will end up in a similar range," the report said, cautioning that the "surge in sales" might not last. At the MBTA, higher-than-expected fare revenues were offset by a $29 million increase in wages in fiscal year 2014.
Snow and ice removal went $90 million over-budget in fiscal year 2014, according to the report, which expected spending in that category would be "significantly higher" than budgeted in years ahead. Recent snowstorms have pushed the state's snow and ice budget into the red this year.
Spending overall was $55 million above budget, while revenues came in $14 million above expectations. The report said the $41 million shortfall is "a small difference for a budget of over $2 billion."
The report was written by Rafael Mares, a senior attorney at the Conservation Law Foundation, and produced by Kirstie Pecci of the MASSPIRG Education Fund.
"Our second progress report measures actual revenues and expenditures against projections for the first fiscal year complete since passage of the 2013 legislation, and finds we fall short a small amount," Mares said in a statement. "Watching some of the trends closely, it becomes clear, however, that in future years this gap will grow. Overall, there still is not enough revenue to cover important transportation needs."
The report says voters' repeal of a 2013 law linking the gas tax to inflation means the foregone revenue will "need to be replaced."
The gas tax indexing had been set to go into effect this year. The report said indexing was expected to raise $27 million in revenue in fiscal year 2016, the first full year of implementation, and "could have been more than $60 million" by fiscal year 2018.
Lower than expected costs on a commuter rail contract, paratransit services and the procurement of Red and Orange line cars have primed the MBTA to meet targets set by the Legislature for raising a portion of its own revenue, according to the report.
The eight-year contract with Keolis is $93 million cheaper in fiscal year 2015 than the document the Legislature used to develop the 2013 tax bill. Contracts to provide the MBTA's The Ride paratransit service are $64 million lower over three years than the MBTA pro forma the Legislature used, and replacement of Red and Orange line cars by CNR MA "appears" as though it will be almost $200 million below the original estimate.
An effort to boost MBTA revenues through naming rights has turned up flat, so far. The T received no bids for the nine stations offered, and Jet Blue's interest in paying $800,000 to rename the Blue Line was below the $1.2 million minimum bid amount, the report said.
The report credits the tax law with allowing regional transit authorities to receive their state money early, meaning they do not need to borrow in anticipation of state reimbursement. Worcester's RTA has started downtown trolley service, the Berkshire RTA tested wifi on certain routes and the Merrimack Valley RTA added Sunday service "throughout the system for the first time since 1959," the report said.
The report also says the Massachusetts Department of Transportation and the MBTA failed to meet an Oct. 1 deadline for filing reports about savings, and said a required meeting between state officials on transportation finances failed to take place by last summer.
Last April the Legislature passed a five-year transportation bond bill authorizing $12.7 billion in spending, though the state's "self-imposed debt-ceiling" means it cannot issue bonds "anywhere close to this amount," the report said, noting the state's five-year capital investment plan for transportation includes $6.3 billion.
Transportation for Massachusetts said the Legislature's relatively late passage of the transportation bond bill was detrimental to certain projects, including a proposed rail line connecting Fall River and New Bedford to Boston.
"Based at least in part on the lack of authorization, it appears that South Coast Rail will see almost $48 million less spending in FY15 than originally planned ($4 million instead of $52 million)," the report said.