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Big Dig Costs Pegged at $24.3B, Lawmakers Told

Fri July 13, 2012 - National Edition

BOSTON (AP) - The cost of the Big Dig, including interest on borrowing, has mushroomed to nearly $24.3 billion, strangling the state’s ability to fund other critical transportation projects, a legislative oversight hearing was told on Tuesday.

The sobering message, delivered by high-ranking officials of the Massachusetts Department of Transportation, came as lawmakers and Gov. Deval Patrick’s administration mull long-term options for financing roads, bridges and public transit around the state.

Though the Big Dig - the nation’s costliest highway project - was essentially completed years ago, the state still owes about $9.3 billion in principal and interest on the Big Dig and related projects with payments scheduled to continue through 2038, according to a summary presented to the House Post Audit and Oversight Committee.

Annual debt service was pegged at roughly $550 million, including debt owed by the Massachusetts Bay Transportation Authority on public transit improvements that were mandated as part of the original approval process for the Big Dig.

“We did not build this, but it’s ours to manage,” said state Secretary of Transportation Richard Davey, noting he was in grammar school when the project was first conceived in the 1970s.

Key elements of the Big Dig included demolition of the overhead section of Interstate 93 in Boston and replacement with an underground tunnel, and extension of Interstate 90 to Logan International Airport. Recent cost estimates of $15 billion did not account for the more than $8 billion in interest already paid or currently owed, which officials said provides a truer picture of the project’s overall cost.

The federal government contributed about $7 billion toward the Big Dig, which was plagued by cost overruns and shoddy construction. In 2006, a woman was killed by falling ceiling panels in an I-90 tunnel, leading to multimillion settlements with contractors.

More recently, the state was forced to shore up thousands of corroded light fixtures inside the Thomas P. “Tip” O’Neill tunnel after a 110-pound fixture broke free and crashed to the pavement.

Dana Levenson, chief financial officer for MassDOT, said despite its steep costs the Big Dig has improved transportation and quality of life in the Boston area. But he told the panel that it was keeping the state from addressing other priorities.

“The magnitude of the debt and the attendant debt service required ... certainly keeps us from tackling not only desirable but necessary capital projects for the good of the Commonwealth, its taxpayers and transportation users,” he said.

The nearly $24.3 billion price tag presented on Tuesday does not include Big Dig-related projects still awaiting completion, including a $1.3 billion extension of the MBTA’s Green Line, which would likely require additional borrowing, officials said.

The MBTA raised fares an average 23 percent on July 1 to help close a deficit resulting in part from its $1.6 billion share of the Big Dig debt. Officials have warned of another deficit and the need for more fare hikes and service cuts next year without a long-term fix.

Also not included in the Big Dig cost analysis were maintenance expenses for the highway system, much of which is paid for through tolls collected on the Massachusetts Turnpike, Boston Harbor tunnels and Tobin Bridge, Levenson noted.

The tolls have long been a bone of contention for turnpike users who live west of the city and have complained of paying tolls to support the I-93 project, which largely serves daily commuters from north and south of the city.

Rep. David Linksy, a Natick Democrat who chairs the oversight panel, told reporters after the hearing that his constituents in the western suburbs should not be forced to shoulder the Big Dig debt.

“One revenue stream I’m not interested in is having people who drive the Massachusetts Turnpike continue to pay for the Big Dig,” Linksy said.

But lawmakers and state officials were hard-pressed to offer alternative funding solutions for the state’s transportation needs. Past suggestions, such as higher gasoline taxes, have met strong political opposition.

The Big Dig debt is “a drain of 550 million out of state resources that could be going to bridge, road construction elsewhere,” said Rep. George Peterson, a Grafton Republican and the assistant House minority leader. “But undoubtedly we are going to have to come up with revenue.”

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