NewburyportNews.com, Newburyport, MA

April 5, 2013

Governor calls tax plan 'pretend fix'

By Matt Murphy
STATE HOUSE NEWS SERVICE

---- — BOSTON – After hearing Gov. Deval Patrick threaten to veto what he called a “pretend fix” to the state’s transportation system deficiencies, House Speaker Robert DeLeo defended the Democratic legislative leadership’s proposal to raise $500 million in new taxes as a plan that, unlike the governor’s, spares the middle class from a major tax hike.

“Just the contrary, what this plan does actually is to make sure we’re taking care of or addressing the issue of transportation while at the same time not putting a bigger burden on families or business that the governor’s plan would put on,” DeLeo told reporters outside his office on Wednesday.

Patrick, at a press conference, panned the Democratic leadership’s transportation plan as inadequate and “not fair” to residents outside Greater Boston who will be asked to pay more in gas and cigarette taxes for what he predicted would be another short-term solution to budget and debt problems at the MBTA and Department of Transportation.

“Let’s be clear. The leadership proposal taxes the middle class,” Patrick said, later adding, “It’s a fiction to claim somehow this bill avoids new taxes.”

Patrick called the plan from DeLeo and Senate President Therese Murray “too small” to make the improvements required around the state, including the I-91 viaduct through Springfield from which concrete came loose on Wednesday, causing major traffic delays.

“The I-91 viaduct is falling apart. The fact that it’s falling apart is not a surprise. It’s falling apart because we haven’t taken care of it,” Patrick said, blaming a Beacon Hill culture and “administration after administration” that has been unwilling to tackle the long-term funding problem.

He also reiterated that the proposal from House and Senate leaders provides no funding for education, for capital expansion projects like the Green Line extension that are important to economic development, or for improvements to the existing system like replacing deteriorating Orange and Red Line cars or regional transit buses.

“They’re going to get all the blowback from a tax vote and none of the benefit and it’s important for the public to see that. It’s important for members to see that. And if that’s the choice they want to make, I’m not going to play that game,” Patrick told the News Service in Thursday in an interview.

As Senate Democrats caucused for hours behind closed doors to discuss the transportation bill, DeLeo showed little interest in slowing down the process or returning to the negotiating table with Patrick to find a middle ground that the governor said he still believes is within reach.

He said the House still intends to debate the bill on Monday, and he will know more after the vote whether there is enough support in the House to sustain Patrick’s promised veto. According to a State House source, DeLeo began calling on members after Patrick’s press conference to ask for their support, including progressive Democrats sympathetic to the governor’s proposal.

Patrick said he, Murray and DeLeo have talked privately about a “couple different alternatives” to the size of the revenue package and the means of collecting it, but admitted he did most of the talking.

“To come up with this plan is just not serious and to say it’s a plan, to say it’s a solution is just not serious and I’m not going to play that game. I’m still here. I’m still engaged. I’m still willing to talk about compromise,” Patrick said.

After Senate President Therese Murray suggested Wednesday that Patrick administration predictions of fare, fee and toll hikes under the legislative leaders’ plan was “spin,” DeLeo backed up Murray. “There’s no need to raise fares,” DeLeo said, clarifying, “I can’t say forever. No one could ever say forever.”

The speaker did not directly address Patrick’s critique that the House bill does not provide enough new revenue to ensure that the MBTA and MassDOT wouldn’t be in a similarly difficult financial situation six years from now. “The fiscal woes, the transportation woes that we presently are concerned about, will be alleviated,” DeLeo said.

Patrick conceded that DeLeo and Murray will be able to pass their smaller financing package if they want to, but told the News Service in an interview that he does not want to be associated with it.

“If we’re actually going to try to get a deal that we all can believe in and that is a permanent fix, then they need to respond to my interest in trying to find some place in the middle. If they don’t, then they will have made their choice and they know what I will do,” Patrick said in an interview.

Patrick, who did not highlight plans to increase taxes during his last reelection bid, continued, “When I talk about generational responsibility, it’s not a rhetorical thing for me. It’s a belief. It’s the difference I ran on. It’s what we’ve been trying to do differently here and this is not that and I’m not going to be a part of it.”

When asked whether the Legislature was treating him as a lame duck - the governor does not plan to seek a third term next year - Patrick said, “No. No. I don’t think so. That would be a mistake.”

Describing the lengthy process undertaken by his administration over the past year to craft a 10-year transportation investment plan and a proposal to pay for it, Patrick chuckled at how the leadership’s bill again requests a 10-year capital plan from the administration. “Come on. I’m not going to play a game. We’ve got a serious fix. That is a pretend fix,” Patrick said.

The House and Senate leadership plan provides the MBTA with enough new funding in fiscal 2014 to avoid a fare increase or service cuts, but asks the agency to come up with $250 million or more in new revenue in subsequent years. “Hey, step up to the plate and start being more efficient,” Murray said Thursday.

Patrick, however, told the News Service that message is different from what they were saying privately.

“The House chair of transportation and the Ways and Means chair told us that they were taking the $250 million in fee, fare and toll increases from my plan and increasing that. If they’re saying something different now, let’s take a little time to see what is actually in the plan,” Patrick said.

House Transportation Chair Rep. William Straus denied giving the administration that impression, writing in an email: “I never said, indicated, implied or communicated in any way they ‘we’ were increasing fees, fares or tolls in the package that would be presented to the full House. I have tried to make it clear in all my statements that a consequence of doing nothing prior to June 30, with regard to transportation financing would result in the administration having to use its existing options for increases and or service cuts in FY 2014. Our plan to be debated Monday, avoids that unfortunate consequence.”

Democratic leaders also believe the new revenue is enough to support a $100 million increase in Chapter 90 funding, with the House advancing a bill Wednesday that would authorize $300 million for the local road repair program. Patrick said he has serious doubts about whether that will be possible with the favored revenue package.

“Even the Chapter 90, it’s questionable whether there’s enough revenue for that Chapter 90 which is why it blows my mind that the Massachusetts Municipal Association is so enthusiastic about it,” Patrick told the News Service.

In a memo obtained by the News Service to several of his Cabinet secretaries on Thursday, Patrick asked his deputies to prepare within 30 days a list of capital projects that could be cancelled or postponed, including those already underway, and the cost of shutting them down.

“While the process of reaching final legislation is on-going, we should be prepared to curtail current transportation, business development, environmental, recreational and other infrastructure investments should the Legislature’s proposal carry the day,” Patrick wrote in the memo.

The governor and his staff would not speculate on whether they could muster support in the House or the Senate to sustain a veto, but the possibility exists that the leaders in either branches could fail to rally the two-thirds margin needed to overturn Patrick’s rejection of the financing plan as written. Under that scenario, no bill would pass.

Asked whether he was prepared to accept and explain to voters a 19 percent fare increase on the MBTA threatened by the agency if new funding does not arrive, Patrick said it was a consequence he was willing to risk.

“I cannot ask people all over the Commonwealth to pay to fix the T alone. It’s not fair. We have been asking people everywhere else but in downtown Boston to eat the cost of the Big Dig and we’ve been asking them in two ways, the main way by starving investment everywhere else,” Patrick said.

The speaker said people are “fiscally concerned” about the governor’s planned elimination of deductions, and also reiterated concerns raised by bond rating agencies about the governor’s overreliance on income tax revenue, a multi-year borrowing plan and a drawdown from the rainy day fund.

“It’s not the House and the Senate plan that is talking about the increase to the income tax. It’s not the House and the Senate plan that is talking about elimination of many of the deductions that people presently get, whether they be for education, whether they be for the selling of the home..,” DeLeo said.

“We’re trying to protect the middle class. That is I think one of the major differences of the two plans,” DeLeo said.