Gov. Deval Patrick has unveiled a five-year plan to invest in the Bay State’s capital needs.
Fixing the Longfellow Bridge will cost $180 million due to a persistent lack of maintenance, according to a study by the Pioneer Institute.
“The Longfellow connects two economic and cultural powerhouses, Boston and Cambridge, yet suffers from such neglect and disrepair that reconstruction may cost several times more than the price of building a new bridge,” the new report noted.
“Our Legacy of Neglect: The Longfellow Bridge and the Cost of Deferred Maintenance,” details the Bay State’s failure to provide the necessary repairs to aging infrastructure statewide. Pioneer is a Boston-based, nonpartisan think tank.
The Longfellow, connecting Boston and Cambridge, is not the only piece of infrastructure in trouble, the study noted. Overall, the commonwealth’s assets suffer from a maintenance backlog in the tens of billions of dollars. However, the calculation of an overall state figure is impossible to define because there is no centralized system for comprehensively managing the state’s assets, the study revealed.
“No matter which entity is responsible, every state asset suffers from the same treatment,” researchers wrote. “We fail to adequately budget for maintenance; even worse, we create perverse incentives that discourage state managers from maintaining state assets.”
The responsibility for asset maintenance in Massachusetts is scattered across state government and riddled with redundancies and ambiguities, particularly regarding the practical responsibilities of the Division of Capital Asset Management and the various executive branch agencies, the survey noted.
Researchers found that maintenance spending from an agency’s operating budget will reduce program funds. While the postponement of routine maintenance maximizes operating funds, it also hastens the failure of capital assets. The eventual failure of the properties will result in an emergency disbursement of capital funds, which are under DCAM’s control and will not impact the agency’s operating budget, the study said.
As a result, managers who spend money on maintenance are penalized for trying to maintain their assets, researchers wrote. There is no comprehensive plan in place to stop the problem from growing worse. Budgeting for maintenance simply lacks the inherent political appeal of new spending on new assets. Every new structure that is built, every road that is paved, every new asset the commonwealth builds is doomed to decay prematurely through a lack of maintenance, the study said.
Researchers said the problem will not be solved in a single step. Rather, they say, it will require a sustained, multigenerational effort. Pioneer recommends that the state should stop building new assets without first examining and budgeting for their life-cycle costs, including regular maintenance and measure the condition of the commonwealth’s assets and present easy-to-understand metrics of expenditures. Proper measurement of maintenance needs also will require changes to the state’s accounting system to allow easier tracking of maintenance, as well as the adoption of financial reporting standards that emphasize asset management, the study noted.
Other recommendations include creating a maintenance budget by requiring agencies to spend operating funds equal to 2 percent of asset replacement value on maintenance, establishing a Facilities Maintenance Reserve Fund and utilizing budgetary surpluses to perform pay-as-you-go maintenance.
‘A Tremendous Opportunity’
The same day the Pioneer report was released, Gov. Deval Patrick presented a five-year plan to invest in the Bay State’s capital needs. The governor said he will raise the state’s borrowing limit for infrastructure improvements to $1.5 billion this year and cap subsequent growth at an additional $125 million a year.
Stable annual increases in the bond cap will allow the administration to make progress in addressing the backlog of infrastructure needs, including transportation, schools and public safety projects, Patrick said.
While the administration’s annual borrowing limit is expected to increase over the next five years, the debt service as a percentage of total budgeted revenues by 2012 is projected to be less than this year. Under this formula, the commonwealth could increase its level of public-asset investment, while still preserving additional capacity in the operating budget to fund needed programs, Patrick said.
The administration’s approach to setting the annual bond cap could ensure that annual debt service payments on the commonwealth’s bonds and other payment obligations will decrease over time as a percentage of total budgeted revenues.
In its 2006 report, the Joint Committee on Bonding, Capital Expenditures and State Assets recommended an increase in the bond cap.
“We have a tremendous opportunity to expand our economy and create thousands of jobs through properly maintaining and expanding our capital assets,” said Sen. Mark Montigny, a New Bedford Democrat who is co-chair of the committee.
In developing its five-year capital investment plan, the administration faced serious challenges. Although it will not address all of the identified capital project needs, Patrick’s approach to raising the bond cap could result in meaningful progress toward improving the network of public infrastructure that the citizens of the commonwealth rely on in their daily lives.
The administration is expected to release a capital investment plan that describes how it will allocate those capital investment resources to make the improvements to the state’s infrastructure.
Steven Poftak, one of the study’s authors, said he is not sure whether the governor’s proposal will meet the demands of the state projects.
“I don’t know if his plan will work,” he said. “The proof will be what projects get put into the state’s capital plan. How will they use existing money and how will they spend future money? From the administration’s public statements, it sounds as though that maintenance is a priority. But given the focus on several new projects including the New Bedford/Fall River rail extension, will there be enough money to go around?”
