BOSTON – Senator Brian A. Joyce testified before the Joint Committee on Transportation today that, while he applauds the Patrick administration focusing public and legislative attention on the state’s serious transportation infrastructure needs, as Chair of the Senate Committee on Bonding, Capital Expenditure and State Assets, he has serious concerns over the administration’s proposed borrowing authorizations in seven different bond bills filed in the past week. Those bills in total would authorize an additional $21.9 billion in debt, some of which future taxpayers would be paying until the year 2053.
Joyce expressed his belief that the Patrick administration’s proposed bonding exceeds the amount of debt the Commonwealth is legally allowed. According to Joyce, at the end of Fiscal Year 2012, the Massachusetts General Laws allowed the state to carry $17.07 billion of direct debt, of which $16.7 billion is already committed. U.S. Census Bureau statistics and a recent study by the Taxpayer’s Foundation indicate that Massachusetts has the highest state debt per capita in the nation. When combining state and local debt per capita, Massachusetts ranks second in the nation.
Joyce noted that the Senate expressed its concern that the state not incur an unsustainable level of debt that could jeopardize its bond rating, overburden future generations of taxpayers, and limit the state’s ability to fund its ongoing operational expenses when it enacted legislation creating a Capital Debt Affordability Committee last year. The committee is composed of the Secretary of Administration and Finance, Secretary of Transportation, Treasurer, Comptroller, an individual appointed by the governor who shall be an expert in public finance and who is a resident of the Commonwealth and employed by a public or private institution of higher education, and two individuals appointed by the Treasurer who are residents of the Commonwealth and not employed by state government, as voting members. The House and Senate chairs and the ranking members of the committees on Bonding, Capital Expenditures and State Assets and the committees on Ways and Means are to serve as nonvoting members as well. To date, the independent members of the committee have not been appointed, nor has the committee met. By law the committee’s first report is due on Sept. 10, 2013.
“It is important that we have a thorough non-partisan and independent fiscal analysis annually to ensure that we don’t overburden future generations with unsustainable levels of debt,” said Joyce. “We must also insist on a definite timeline for implementing the reform measures that we’ve already passed to protect the taxpayers, as well as seek additional efficiencies and reforms.”
Joyce also noted that the Legislature passed several reform measures to make state government more efficient in 2009, but a number have not yet been implemented. For instance, the 2009 transportation reform bill required the administration to form a committee to study and approve public-private partnerships for state infrastructure projects that would allow transportation improvements at reduced taxpayer expense. Four years later not a single member has been appointed. Another measure in the 2009 bill required MassDOT to have one integrated asset management system, but the department still carries more than a dozen different systems to manage bridges, highways, the MBTA, and more.
Additionally, Joyce called attention to the proposed duration of the administration’s Transportation Bond Bill. The bill calls for an extraordinary 10 year authorization, meaning that taxpayers would pay for these new debt obligations, in some instances, until June 30, 2053.
“The Legislature provides a powerful check on executive spending,” stated Joyce. “The Legislature typically authorizes bonds for a much shorter time period in order to ensure that the state allocates authorized funding in the most efficient manner and with the greatest return on taxpayer investment.”
Finally, Joyce asked the committee to take a hard look at the transferability clause included in the Transportation Bond Bill. The clause would allow the administration to transfer authorized funds between projects, so long as the transfer amounts to less than $200 million. For example, the administration could shift $200 million in cost savings from South Station or the green line extension to cost overruns on the South Coast Rail Project. In light of the considerable investment that the administration has asked taxpayers to make, Joyce feels the state should make every effort to keep every project within its allocated budget and should return cost savings directly to the taxpayers.
