EDITORIAL

Jun 24, 2010 — The Salem News

Jun. 23, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- The restructuring of the state's transportation agencies sadly has not brought an end to the irresponsible practice of borrowing money to pay their employees' salaries.

The board that oversees the state Department of Transportation Monday approved a budget that includes the borrowing of $1 billion over the next five years to meet payroll. The much-criticized practice of using borrowed money to pay for normal operating expenses was initiated by the overseers of the old state Highway Department during the Big Dig era and helped fuel the demand for transportation reform. (The March 2007 report of the Massachusetts Transportation Finance Commission found that MassHighway was "cannibalizing its capital budget to support its operating needs.")

But even though MassHighway, along with the Turnpike Authority and MBTA, has since been folded into the new DOT, the financial shenanigans continue.

The $698 million DOT budget for the fiscal year that begins July 1 was released to the board and the public just 10 minutes prior to Monday's meeting in Boston, according to the State House News Service, and approved about an hour later.

According to the SHNS account of that meeting:

"The board's lone Republican member, Ferdinand Alvaro (a lawyer who lives in Marblehead), raised concerns about additional borrowing to pay for personnel, worrying about the 'crushing debt service' facing the state's transportation system.

"'We're borrowing money on the long term to pay for expenses that are short term,' he said.

"Without factoring in the debt service payments, he added, 'the transportation system actually generates enough revenue to pay all its expenses.'"

Yet the Patrick administration, despite its previous criticism of MassHighway, now says it may even expand the practice of borrowing money to pay salaries as more people are hired to work on the various infrastructure projects being financed with federal stimulus funds.

In a statement issued Monday, Republican State Committee chairman Jennifer Nassour declared, "Gov. Patrick has brought our state on a wild ride of binge spending and failed reform for the past four years. The promised cost-savings of transportation reform were clearly a sham, and have done nothing but create a massive, dysfunctional agency that has not controlled spending."

Voters, regardless of their political stripe, have reason to be concerned about this practice. Here in Massachusetts, "temporary" tax hikes have a way of becoming permanent and we've become utterly dependent on the revenues raised by the state lottery.

It's bad policy to use borrowed money -- normally reserved for capital expenses such as the construction of new roads and bridges -- to pay normal operating expenses. But once hooked, it's difficult for public agencies to wean themselves from the habit. (That 2007 Transportation Finance Commission report noted that while in 1990, only 15 percent of the MassHighway workforce was being paid using borrowed funds, by 2006 that figure had increased to 82 percent.)

The bill for that $1 billion in borrowed money will come due someday, without so much as a highway overpass or even a sidewalk to show for it. Beacon Hill ought not adopt the ways of Congress and the Obama administration, in which today's expenses are simply piled on the backs of future generations.

Newstex ID: KRTB-0380-46402278