In Washington, D.C., federal lawmakers were once vilified for voting to spend $450 million of taxpayer dollars on two Alaskan boondoggle bridge projects that would have connected 8,000 people to an island containing some 50 people, which sarcastically came to be known as the Bridge to Nowhere.
On Jan. 29, Massachusetts State Treasurer Tim Cahill proposed fixing 10 damaged bridges at a cost of more than $600 million in what could become known as finding the Funds from Nowhere.
In a press conference called in front of business executives at his office, Cahill proposed funding 10 high-cost, structurally unsound bridges across Massachusetts with Grant Anticipation Notes (GANs) — tax-exempt municipal bonds repaid with future federal highway funds.
Cahill’s logic goes a bit like this: “The state doesn’t have the money now but won’t have even more money needed to do this, 5, 10 or even 20 years down the road.”
The proposal would funnel approximately $600 million into all 10 bridges over a three-year period, Cahill said. Twenty percent would be funded by the state, and the rest would be picked up by the federal government.
“We could save between $3 to $4 billion by doing this today,” Cahill said. “It’s an opportunity to leverage what the federal government is giving us. It’s a win-win situation.”
The 10 bridges at issue were identified in the Transportation Finance Commission report as being in dire need of repair, but no funding source has been identified. Cahill’s argument is that using GANs allows the state to fix the bridges now, which not only prevents a potential public safety disaster but allows the state to lock in project costs in 2008 to 2010 dollars.
The state would repay the bondholders through federal highway money it would receive in future years. Cahill would borrow all of the money over three years, and not borrow more than 20 percent to 30 percent of federal highway money due the state between 2015 and 2021.
10 Bridges, $690 Million
Below is the list of Massachusetts bridges cited by Cahill, followed by the estimated cost to repair them in 2007 dollars and the average number of daily trips taken over each one:
1. Fore River Bridge (Quincy/Weymouth) — $160 million/33,320 trips
2. I-95 Whittier Bridge (Amesbury/Newburyport) — $132 million/75,120 trips
3. Chelsea Street Bridge (Boston/Chelsea) — $120 million/40,400 trips
4. Route 113 (Groveland Bridge) — $75 million/21,400 trips
5. Route 9 (Shrewsbury) — $50 million/45,000 trips
6. Turner Falls Bridge (Gill) — $35 million/8,000 trips
7. Route 12 Bridge (Leominster) — $25 million/39,000 trips
8. Route 116 Bridge (Chicopee) — $24 million/15,000 trips
9. Beach Road (Oak Bluffs) — $30 million/15,500 trips
10. I-95 Bridge (Lexington) — $21 million/42,000 trips
The combined price tag for repairing or replacing the 10 most expensive bridges is $690 million. Of that, the Whittier Bridge repairs would cost $132 million and the Groveland Bridge would cost $75 million, according to Cahill’s office.
“We can’t afford a public safety tragedy. We need permanent solutions for these bridges,” said Cahill. “This plan offers a fiscally responsible way to fund these urgent projects.”
Cahill serves as Massachusetts State Treasurer and Receiver General. He was sworn in for his second term on Jan. 17, 2007.
As the Commonwealth’s chief financial officer, Cahill brings a business-minded approach to managing the state’s finances and has implemented better business practices in the Treasury’s departments and affiliated agencies.
Prior to his election in 2002, Cahill served as Norfolk County Treasurer from 1997 to 2002, as a Quincy City Councilor from 1987 to 2003, and was a successful small business owner and the author of a book about local businessmen. He is a graduate of Boston University and a recipient of the 2007 Eisenhower Fellowship.
“What we’re trying to do is avoid a future Minnesota incident, where you have a major bridge that goes over a body of water that breaks down, and that causes loss of lives and significant loss of business,” Cahill told an audience of business executives at his announcement.
Last Aug. 1, the Interstate 35 West bridge plummeted 60 ft. into the Mississippi River in Minneapolis, killing 13 people and injuring 145.
Lawmakers Are Dubious
At the Jan. 29 press conference in Boston, state lawmakers were skeptical of Cahill’s proposal, as it smacked of recycling a financial model used for the Big Dig in the late-1990s, Boston’s legendary construction boondoggle.
The Big Dig — the massive highway and tunnel project through and under downtown Boston — has been the most expensive construction project in U.S. history. It was originally projected to cost $2.8 billion (in 1985) and take about 10 years to complete.
The bloated project faced numerous, staggering delays, eventually costing upwards of $14.6 billion and taking nearly 20 years to finish. It wasn’t done right and may still need repairs, making Boston lawmakers very sensitive about any future borrowing.
The project has incurred criminal arrests, death, leaks and charges of poor execution and use of substandard materials. The Massachusetts Attorney General is demanding contractors refund taxpayers $108 million for “shoddy work.” On Jan. 23, it was reported that Bechtel/Parsons Brinckerhoff, the consortium that oversaw the project, would pay $407 million in restitution for its poor oversight of subcontractors, some of whom committed outright fraud, as well as primary responsibility in the death of a motorist.
Under Cahill’s plan, the state would begin repaying bondholders in 2015, after the Big Dig debt has been paid off.
This is ironic, at least one lawmaker added, because it was the Big Dig’s $15 billion cost that led to many of the bridges’ repairs being delayed over that long building period. Cahill warned, however, the state should act now to come up with the money for the repairs rather than waiting until after the Big Dig has been paid for in 2015.
Cahill’s proposal came a week after the administration of Gov. Deval L. Patrick said it would not include any revenue-generating ideas — increasing the gas tax, for example — in its yet-to-be-filed transportation reform legislation.
The 10 bridges were identified as structurally unsound in a recent report by a transportation finance commission, which also said the state faces a $15 billion deficit in transportation infrastructure maintenance over the next 20 years. Without a source of funding, it could take up to 10 years to fix the bridges, Cahill said.
His plan would need approval from the Legislature and the federal government, a dicey proposition at best, given the heated, partisan politics of Beacon Hill and the recoil and fallout of the Big Dig.
“This is an interesting and unique proposal from the treasurer and one we had already been considering,” said David Guarino, spokesman for House Speaker Salvatore DiMasi, to the Associated Press the day of Cahill’s proposal.
Cahill didn’t brief Gov. Patrick before the announcement, a blatant breach of Statehouse protocol. For his part, the governor said he was open to looking at any suggestions, including Cahill’s, to help bring in the money needed to repair the state’s crumbling transportation infrastructure.
“It’s not a new idea and we are certainly interested in working with the treasurer,” Patrick said.
“A permanent solution needs to be addressed,” Cahill said.
It will cost at least $20 million to repair each bridge, Cahill said. The Interstate 95 bridge over the Merrimack River between Newburyport and Amesbury will cost $132 million to fix.
All of this comes on the eve of the Patrick administration’s bill to create a single, massive transportation agency — dubbed MassTrans. But that bill won’t be filed until late February, and it won’t contain revenue-generating proposals.
Michael Widmer, president of the business-backed Massachusetts Taxpayers Foundation, told the AP that Cahill’s plan doesn’t address the long-term need for new revenue.
“This wouldn’t produce any additional money,” said Widmer, who was a member of the transportation commission. “This would put these bridges at the top of the priority list and likely create longer delays for other bridges and highway renovation projects, because there’s no new money.”
Among the 10 Massachusetts bridges is the Fore River bridge, connecting Weymouth to Quincy. It was torn down 10 years ago and a temporary bridge put in its place. But the temporary bridge is good for only five more years, and the cost of a permanent replacement is $160 million.
Another crumbling bridge spanning Route 2 in Leominster is the top priority of its Mayor Dean Mazzarella. If Cahill’s plan is adopted, that bridge might get fixed, something that isn’t even being considered at present.
Mazzarella has welcomed Cahill’s plan, which could funnel as much as $25 million into work on the Route 12 bridge on North Main Street in Leominster by borrowing against future federal transportation funding commitments.
“That bridge is in real tough shape,” Mayor Mazzarella said of his needs and no money to help at present. “I applaud his effort for trying.” CEG