by Barry M. Steinberg
Association for Public Transportation
NEW APPROACHES TO FUNDING TRANSPORTATION INFRASTRUCTURE PROJECTS
Notes Recorded by Barry M. Steinberg for the
Association for Public Transportation, Inc.
Dan Wilson, Executive Director of Move Mass: The challenge is not only to design good projects; there is a larger challenge in determining how to fund infrastructure projects. David Dixon has worked out some novel ideas on how to face this funding challenge, including how to fund Phase III of the Silver Line.
DAVID DIXON, FAIA, President, Boston Society of Architects; Principal, Goody, Clancy & Associates.
No one really has the answers to the question of funding transportation projects.
We are very aware of what does and does not contribute to our quality of life. But we can’t fund them, so we can’t plan them appropriately.
The Boston Society of Architects worked the Civil Initiative for Liberal Growth in New England, which has morphed into the Smart Growth Alliance, which has some money for advocacy and planning. BSA is going to be the sponsor for the first international conference on density of development. Case studies: Birmingham, AL, Houston, Boston and San Diego. Introducing density into core city development. This has an effect on public transportation.
Equally important, but often overlooked, is that we need innovative approaches to funding planning too. Who does this? HUD, the governments of affluent communities and universities are willing to pay for it. Transportation planning is in a difficult position: There is no way to pay for planning unless a major institution is willing to support it. We need to find ways to fund transportation planning as much as we need ways to fund transportation projects.
A secondary problem: Often the project proponents have to additionally pay for other, unexpected public sector costs in order to move projects forward.
There are a series of very useful public transportation projects—The North-South Rail Link, the Urban Ring, etc. What is particularly irksome is that these projects are evaluated in the light that although they are very worthy projects on the merits, there is not going to be any money to pay for them. It is a self-defeating circle of sorts. Possible contributors to a project (e.g., landowners near transit stations) will be unwilling to contribute (or be taxed) until the project appears inevitable and the benefits assured. It is difficult for a project to take on an aura of inevitability until secure sources of funding have been locked in, however.
Kendall Sq. is constrained by the lack of the reality (perception of inevitability) of the Urban Ring, because no one believes the Urban Ring is going to be built. There is no strategy to fund the Urban Ring and other projects, so no one believes the reality of these projects.
Regional economic development has to happen in certain places. Organizations have to be near each other for their own reasons. So they are willing to support the development of public transportation.
There is the sense that from the standpoint of environmental justice, these projects are unfair because the proponents have the ability to pay. On the other hand, it is still politically and socially difficult to fund a project through uneven distribution of the funding burden. Even the chief beneficiaries of a project feel frustrated or singled out when it is proposed that they pay more toward the project than others.
In a region as constrained for land as this region, public transportation is closely limited to development. A number of high value projects are being considered. So how can we fund them?
Tax Increment Financing (TIF). If you develop land, there is going to be more economic activity, more tax revenue. TIF’s are very controversial. Schools like to use them for development. The Urban Ring is a classic case of where a TIF may be appropriate. $40 million of additional tax revenue could be realized by the Urban Ring. And it is appropriate that developers bear some of the cost as well as the benefit.
Ruggles, the Longwood Medical Area, Sullivan Sq. -- there is a lot of land that is politically undevelopable without transit access. That is high value development. There is a potential $1 billion increase in the value of that land associated with the Urban Ring. Can we tap into this tremendous growth in land value that could only have been realized with the Urban Ring?
The Urban Ring has been estimated to support an additional 110,000 jobs along its alignment. This represents a lot of parking. A fee on that parking, could generate an income stream for that project. With today’s sensibilities and the unavailability of land in the region parking is done underground at the cost of approximately $50,000 per parking space. Developers building near the urban ring will not have to build as many parking spaces. One could easily envision a construction savings of $300 million in the reduced number of costly underground parking spaces if the Urban Ring were built. If the developers were to put this money into the construction of the Urban Ring rather than parking spaces we would be a long way toward funding the project.
With the Boston Transportation Planning Review (BTPR), we had a thirty year planning blueprint. We have completed the projects envisioned back in the 1970’s and clearly need a new blueprint. Not only what projects and where, but transportation as it is attached to planning. New approaches to finance. Understand and do something about transportation planning and building development.
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Curtis Davis, Moderator: Let’s share experiences of alternate strategies of which we know. Keep in mind, the original transit system of Boston was private, as was all the U.S. railroad system. At this juncture the idea of publicly funded transportation infrastructure projects is at risk.
John Businger, North South Rail Link Citizens Advisory Board: One of the problems is we talk so much about what we cannot do. The Administration is coming out soon with promises about things that cannot be done. All these projects have no-build options. These strategies have numbers attached to them.
We should figure out there are projects that should be done, calculate their benefits, then get the money for them.
Stephanie Pollock, Conservation Law Foundation: There is a chicken and the egg problem. Until we have a half-century game plan for planning, we will not get the financing. It is not true that there is no money. There is money when people want to spend the money. This ‘choir’ [transportation advocates] is not fighting for Boston’s share of transportation planning funds. Can highway money be used for transit? If we demand it. Money can be gotten from the Mass. Pike tolls and T increased fares. Over time this is a $1.9 billion fare increase. We should look at new strategies for collecting revenues. Let’s look at congestion pricing of our roadways and transit system. The requirement that the state spend $400 million on roadway projects other than the Big Dig each year is expiring; some of that $400 million can now go toward transit. This chorus needs to promote a shift in spending from highways to transit. We must get people excited about projects and believing that projects will happen.
David Dixon: I had wanted to mention congestion pricing, but forgot. If we can have a Boston Transportation Planning Review II, we can make a case for these individual projects.
Mark Draisen, Metropolitan Area Planning Council: A broadly-based commission should come together to plan for the next thirty years. This will not work if we say we have no money. I come from the housing field, which lost its money twenty years ago, so it had to find new resources to do what it does. There should be a dialogue between housing people and transportation people and transportation can learn from our experience in housing.
Legislators and the Governor have to develop local bonding capabilities, together with local communities willing to tone down their [independence].
Elizabeth Levin, I believe if there is a vision of development, funding will follow. Our elected officials must lead on this. They must say we need to do these things and we will do these things and we have a plan to do them. Transportation advocates must tell our leaders that we don’t want them saying "We can’t afford these projects".
Barbara Lucas, Metropolitan Area Planning Council: Chapter 61A of the General Laws provides a mechanism for road and highway spending. We should develop the same thing for transit. We must merge the transportation thing with the vision thing. Dennis Dizoglio [at the MBTA] is working on value capture around transit stations. People are trying to overcome the inertia.
Dick Garver, Boston Redevelopment Authority: We need to address the problems at the highest levels but also local decision-making. Roadway projects are queued. There is nothing commensurate that transit projects similarly be queued. The opportunity for something like chapter 61A applicable to the T to fund transit is interesting but not now considered part of the process.
We need the ability to plan transit and to enforce the planning. Recently the governor vetoed a proposition 2 ½ override that would have assisted transit oriented development on the theory that, although it is a worthy regulatory change, something of this nature should be decided directly by the voters. This is very disheartening.
Mark Draisen: Although the prop 2 ½ override was vetoed, developers believe they got what they needed to do TIFs in the other provisions that passed.
Curtis Davis: We came within a hairbreadth of getting the TIF legislation and at least tacit Boston support. The problem with Proposition 2 ½, the increment has to be outside the cap, so that funds wouldn't be taken away from another project. It was vetoed, but was a close call.
George Bailey, MBTA Advisory Board, Sharon: Over the last three years there has been a three billion dollar deficit between what we have committed and the receipts. What about new toll systems? We should be tolling ALL arterials and using the new transponder technology to do so.
There should be a one dollar toll on all interstates as they cross the state line, as well as the Central Artery. Why construct a very expensive Central Artery and make it free? The big dig cost $14 for every driver over its first 30 years. It should not be free to these drivers. Earmark money for the Urban Ring. So developers could be convinced that this could be built. Because of the inequities, we cannot raise gas taxes.
Ilyas Bhatti, The Bhatti Group: It is clear there is going to be a stiff competition for dollars. We have to think about how we are going to develop financing systems and do so with consideration of not one system, but putting together many systems.
Recently, the price of gasoline went up drastically. But where did the money go over the last few weeks?
What about a $.05 per gallon gasoline tax dedicated to transit.
Anne Hershfang, WalkBoston (quoting Peter Roudebush [former President of the Association for Public Transportation]) The useful part of the Boston Transportation Planning Review are three components: People, government and transportation groups. There was energy – cities, towns and citizens working together. We need to do this again.
The new state administration is working in a similar way with the rewriting of the highway manual. It has been a marvelous process for all of us who have been involved with it.
A lot of people from the first BTPR thirty years ago are still around. Fred Salvucci doubled the gas tax. Allan McKinnon sold the increase in Turnpike tolls. You can do these things and raise this money if you sell the increases. It has been done and it can be done again. Proponents have to sell these things by giving explanations for the need.
Move Massachusetts ought to talk the Administration into doing another BTPR. The process must have the administrations involvement to be successful. Peter Roudebush has been talking about this for twelve years. Alan Altshuler at the Kennedy School of Government should also be contacted.
Curtis Davis: Do you see this as something that is done through the banner of the government?
Anne Hershfang: Yes.
Chris Hart, Adaptive Environments: I think we should turn road development over to private developers and use public transportation dollars on transit. The State is getting grayer in age. We must plan to develop transportation for an aging, non-driving population. This is a new and important challenge. For some transit is their only mode. We must start planning now for twenty years in the future, which is close.
Wig Zamore, Somerville: We have to be careful and realistic with our numbers. These transportation projects can be very expensive. The Silver Line in South Boston cost $150 per square foot of anticipated development, three times the real estate values which are $50 per square foot. The Central Artery is 2½ times the value of all downtown Boston development. If you charge for the Central Artery but not Route 128, you are driving them out to 128. Developers are very sensitive to this so the charges for these projects must be broadly applied so as not to have unintended consequences.
It [should be] done in short order, [so] it fuels environmental justice or the plan does not pass federal muster. We could tax developer for new vehicle trip miles created.
Stephanie Pollock: This is up to the Governor. All these things are authorized. No one is lobbying for the transportation bond moneys to be spent on transit. The question is whether Eric Kriss is going to allocate a proportion of the Budget Cap to transit. I asked the question this week. No one talked about this. The Legislature doesn't have to do anything about this. Transit advocates must lobby.
Curtis Davis: All these strategies have been used somewhere. The tools are there, what is lacking is the will to employ them.
David Dixon: Everyone has to realize that people are not going to pay for these unless they believe the projects are going to get built. MONEY FOLLOWS VISION.
We have to invest in a regional vision plan.