By Andy Metzger
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON -- Lawmakers seeking $250 million for local water projects over five years likened the proposal to the state's method of funding local roads, and said the two programs could work in tandem.
Rep. Carolyn Dykema, a Holliston Democrat, said expensive water infrastructure maintenance is often deferred until pipes burst, and said the previous model of mostly federal and state money for the projects has mostly evaporated, leaving cities and towns on the hook.
"What happens if we don't do this?" Dykema told the Senate Committee on Bonding, Capital Expenditures and State Assets Thursday. "It doesn't mean that the investments are going to go away. What it means is the municipalities are going to be bearing the burden of paying for these investments virtually on their own."
Undersecretary of Administration and Finance Scott Jordan said there are concerns about the additional borrowing and another provision that would divert $200 million from capital gains tax revenues to the Water Pollution Abatement Trust, which leverages federal funding and assists in paying for projects.
"The Commonwealth does have a high debt burden and one reason that we do is we carry at the state level a lot of debt that otherwise would be carried at the local level. I would point out to the committee that this would be a continuance of that," said Jordan. "We would have a liability and the towns would have an asset.
Jordan said one reason for the state's high bond rating is the amount of money stocked away in the rainy day fund, which is fed in part by capital gains taxes, and said the reserve is not yet at the healthier amount of 5 percent of revenues.
The credit rating agency Moody's, in affirming the state's high bond rating this week, said that Massachusetts state government's debt ratios are among the nation's highest and said the state's bond rating could go up if there's continued rebuilding of state reserves and stronger constraints on the use of reserves, an "established trend of structural budget balance," and reduced debt ratios.
The bill (S 1947) that Dykema favors, which was written by the Committee on Environment, Natural Resources and Agriculture, provides more money toward water projects than a similar, previous bill (S 1880) backed by Senate President Therese Murray and Senate Minority Leader Bruce Tarr, among others.
The Murray bill does not include the $250 million in bond funding backed by Dykema, which would be distributed using the same formula that funds the local roads program known as Chapter 90.
While Murray has raised concerns about borrowing levels in the committee bill, Dykema said the funding stream in the bill backed by Senate leadership generally goes towards large capital projects, and said it does not fund the regular maintenance needed in the water network. Dykema has recently pointed to a string of water pipe breaks, including a water main break near the State House, to make her case that significant investments are needed to address crumbling infrastructure around the state.
Senate Bonding Chairman Brian Joyce, a Milton Democrat, said he has concerns about the state's indebtedness, which is among the highest in the country, and asked whether it would be helpful if the state allowed Chapter 90 money to be used for water projects as well.
"I wonder if we might also look at expanding the potential use of that money," Joyce said.
Dykema told the News Service more flexibility would be helpful but such a change would not address the need for additional funding.
Joyce also questioned whether there might be blowback from municipalities that recently joined the Massachusetts Water Resources Authority if legislation lowers the cost for new cities and towns entering the Metro Boston water system, and noted that years ago an opponent raised alarm at his inclusion of a "quiet little provision" to waive the fee for Stoughton.
"I was able to say my opponent had cost the town $5 million," said Joyce, who said Stoughton's decision to join the MWRA sparked development, including an IKEA store. He said, "That hookup was a very, very happy day for that town."
"We have a glut of water, frankly," said MWRA Executive Director Fred Laskey. "We have a great system and yet we are surrounded by watersheds that are stressed."
Laskey said the system supplied 340 million gallons of water per day in the mid-1980s and last year the amount had dropped to 200 million.
"Boston used the same amount of water last year as they did in 1900," Laskey said, crediting the drop with conservation efforts and new plumbing standards.