Massachusetts Gov. Patrick Proposes Revamped $3B Plan to Repair Bridges

Massachusetts Gov. Deval Patrick yesterday filed a $3 billion bridge-repair bonding initiative, an eight-year borrowing plan that now includes short-term debt and gas tax bonds to help finance upgrades to nearly 300 bridges currently deemed as structurally deficient.

The financing includes $1.1 billion of grant anticipation notes to be backed by future federal funding and another $1.9 billion of bonds backed by gas tax revenues. To help generate additional gas tax revenue for the bonds, the legislation calls for a pledge of 10 cents of the state's 21-cent gas tax, up from the current 6.8-cent dedication.

"We believe it would open up the capacity to get us to almost $3 billion of actual money to spend on these bridges," state Treasurer Timothy Cahill said.

Previously, the governor's bridge repair program included $3.8 billion of general obligation borrowing that would tap into future GO bonding capacity and restructure $366 million of existing debt. Cahill said his office voiced its concern over Patrick's restructuring proposal, a borrowing strategy that would have cost the commonwealth more in the long run.

"The way we've calculated this is there's a significant amount less of 30-year debt in this proposal and we believe that if you include the repayment by the federal government, the exposure for Massachusetts is only $3.76 billion," Cahill said. "So, we can leverage $3 billion worth of spending on bridges and only have to pay back $3.76 billion which is almost half of what the expectation was going to be under the governor's $3.8 billion plan because there was a lot more 30-year debt under that proposal and there wasn't any federal reimbursement under that proposal."

The initiative will help fund bridge repair to the state's neediest bridges over the next eight years and by selling the short-term debt now rather than waiting for the future federal funds, Massachusetts will save an estimated $1 billion in inflation costs and an additional $500 million in avoided deferred maintenance costs.

"This program will make our bridges safer and create thousands of jobs and long term economic benefits along the way," Patrick said in a press release. "By investing today, we will complete more bridge projects in less time and at a lower cost."

 

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