Boston Chamber of Commerce CEO talks about new ways to fund the MBTA, including taxes

Jim Rooney, CEO of the Boston Chamber of Commerce, said he is not opposed to new fees or taxes to increase funding for the MBTA. (Matt Stone/Boston Herald)

Jim Rooney, president and CEO of the Boston Chamber of Commerce, said he is not opposed to new taxes or fees to shore up MBTA funding, but he said he does not oppose new taxes or fees to shore up the MBTA’s funding, but he said he does not oppose new taxes or fees to boost funding for the MBTA. He warned that past attempts to transfer had not worked as expected.

Rooney is part of a group that Gov. Maura Healey will soon convene to consider long-term funding solutions for transportation across Massachusetts, including the MBTA, and to develop a Sustainable Transportation Financing Plan at the end of the year. create. tenure.

Looney, a former MBTA official who finished his career with the agency as deputy general manager, has been working with states such as Minnesota, which approved a 0.75% sales and use tax in 2023 to support both housing and transportation initiatives. Other states also said they are eyeing the new tax.

“I’m not inclined to see new taxes imposed. I think the genesis of that is that some other jurisdictions are moving in that direction,” he told the Herald this week. “Broad taxation was either not part of the equation in Massachusetts, or it failed miserably when it introduced a T-only sales tax in the ’90s, for example.”

In 2000, the MBTA, along with more than $3 billion in state debt, dedicated sales tax funds under a law known as “advance funding,” as sales taxes increased at an average annual rate of 6.5% from 1990 to 2000. Received the portion.

But sales tax growth slowed in the years that followed, and the flow of money didn’t benefit the agency as much as lawmakers had hoped, according to a 2009 analysis by the MBTA Advisory Committee.

Rep. William Straus, co-chair of the Transportation Committee and a member of the Healey Transportation Funding Task Force, said the sales tax promise to the MBTA of about $1 billion per year “remains a solid foundation for the budget.” said.

Sales taxes and other “subsidies” to the transit agency’s budget account for 80% of the ticket price, with the rest paid at the farebox, he said.

“The fact that consumption tax growth since 2000 has been lower than expected does not mean that the Fiscal Loan Act was wrong. In fact, with its fixed revenue source, “We are able to receive more competitive and lower borrowing rates when selling our bonds to investors,” Strauss said in a statement to the Herald.

The MBTA faces significant financial challenges in the coming years. The agency’s budget gap could widen to $652 million in fiscal year 2025 and up to $1 billion by fiscal year 2029, agency budget authors predicted last month.

Aggressive hiring efforts, investments in safety and service mandated in part by federal mandates, and reduced ridership following the pandemic all contributed to the financial strain.

Healey did not rule out the idea of ​​new taxes or tax increases to support the MBTA earlier this week, but said, “I want to see what the task force recommends to me.”

In response to a question about new taxes and increases, he said, “I’m not going to comment on hypotheticals until we know the situation, but I can tell you that as governor I’m not afraid to tackle this head-on.” “This administration is not going to make any effort toward the future, which frankly is something that’s been happening for too long. It’s been like that for years, years, decades, right? It’s the reason we’re in the hole we’ve been in and digging ourselves out of.”

The Governor provided an additional $127 million to the MBTA in his fiscal year 2025 budget proposal and handed the MBTA $45 million to implement a fare discount program.

He also used funds generated by a 4% surtax on incomes over $1 million, known as the “Fair Share Amendment” or “Millionaires Tax,” to increase the borrowing capacity of government agencies over five years. He proposed an increase of $1.1 billion.

Doug Howgate, president of the Massachusetts Taxpayers Foundation, said the surtax is part of discussions for long-term transportation funding, including for the MBTA. But there remains a “significant need” for agency and transportation efforts across the state.

“In discussions 10, 15, 20 years ago, certainly a lot of the conversation would have focused on gas taxes,” he said. “But obviously a lot of those conversations have changed in light of the fact that we’re going to see more and more electric vehicles.”

Expectations that states will receive less revenue from gas taxes as drivers become less dependent on gas-powered vehicles are also putting pressure on the transportation funding debate. Through gas taxes, hundreds of millions of people are moved into transportation initiatives.

Sen. Brendan Crichton, co-chair of the Transportation Committee, said Massachusetts needs “a more modern structure to secure more modern funding” as the gas tax is repealed.

“(Source) It’s certainly fair in terms of income levels and in terms of geography. So I think having this conversation is the responsible way to actually move the work forward,” he told the Transportation Funding Task Force. talked about.