By Dan Kennedy • The press, politics, technology, culture and other passions

A wicked smart idea to fund public transportation


2006 photo (cc) by Adam E. Moreira.

The Boston Globe’s Tim Logan has an important story today about an emerging new paradigm for funding public transportation: charging a fee to property owners who will benefit from it.

It’s already working in some areas, Logan reports. Columnist Shirley Leung notes that Steve Wynn is paying a substantial subsidy to improve Orange Line access to his proposed Everett casino (which I still hope will never get off the ground, but that’s another matter).

My wicked smart Facebook community has already been talking about using such fees to pay for the $1 billion extra that it’s going to cost to build the Green Line Extension into Somerville and Medford. It sounds to me like a great idea, especially since — as state Secretary of Transportation Stephanie Pollack tells Logan — developers are already assessed fees for road improvements. I’d rather see them pay for a new MBTA station than a new interchange.

As always, we need to avoid unintended consequences. There’s already a danger that small, independent businesses will be forced out as property values soar. Perhaps they could be exempt from whatever fee structure the state ultimately decides to adopt.

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  1. Jerry Ackerman

    Communities/neighborhoods that benefit from new facilities could roll a piece of the price into their tax rates. Yes, they already pay an annual assessment to support the MBTA, and if I recall correctly the amount supposedly reflects either the amount of service offered or actual usage. In any case, we’d be asking them to now pay up front for new infrastructure.

    • Dan Kennedy

      @Jerry: Interesting thought. Let me push you a little. The assessed value of their homes is going to rise because of the proximity to the T, so they will pay more in property taxes anyway. That seems fair, and I don’t see why they should pay anything beyond that. So how do we capture those increased taxes to pay for transportation?

      • Jerry Ackerman

        Excellent question. It’s pretty hard to separate out the factors that increase real estate values. Maybe another approach is the Business Improvement District concept. I remember such a movement was under way in downtown Boston years ago, but am not sure it ever happened (something tells me that it did, but only in recent years). The idea was that property owners who benefit from site-specific improvements should pay for them. On another front: People who live in the boondocks and want sewers extended to their neighborhoods (or street improvements, etc.) end up paying betterment charges to pay for the construction and financing. (Either that, or, in the case of sewers, end up paying through the nose [excuse the pun] for expensive Title V engineered septic systems.)

  2. Aaron Read

    It’s a good idea on the surface, but it could go to an extreme pretty fast. I’d also worry that it encourages people outside of the MBTA’s areas (who nevertheless benefit from the vibrant major city that the MBTA enables) to further think that they should not be paying for anything to do with the MBTA.

    • Dan Kennedy

      But @Aaron, as Logan’s story points out, developers often put big bucks into road improvements. So the principle here is no different. We have our transportation priorities backwards. Did you realize that you can write off your tolls on your state taxes but not your public transportation fares?

      • Aaron Read

        Huh. I did not know that. And yes, I’m as flabbergasted as you.

    • Jerry Ackerman

      I believe that cities/towns outside the MBTA district with commuter-rail service now pay voluntary subsidies for this service.

  3. Jerry Ackerman

    My earlier comments were made before reading the Globe story. Logan has done a fine job touching on the important issues.

  4. cynthiastead

    DK – MBTA communities are already assessed for access. In some places, it’s why the MBTA is not asked to expand, as it is a levy with no authority or oversight by the paying communities. How would this be different? Tax the individual businesses AS WELL AS the municipality itself? Fun fact – the levy is also on communities whose borders TOUCH a community with service even if there is no service provided to them directly.

  5. Peter Sullivan

    Dan, your post talks about fees and subsidies The 1 billion dollars it’s going to take to complete the Green Line”… Let’s call it what is is, a billion dollar tax increase on business in Somerville and Medford………

    • Dan Kennedy

      It depends on how it’s implemented. Requiring a developer to pay for road improvements to accommodate the extra traffic that will be created isn’t a tax. This is the same idea — identical to what New Balance is doing in Brighton. It’s completely isolated from public transportation, and New Balance executives realize they won’t be able to hire effectively unless they step up.

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