A Billion-Dollar Big Dig Blunder
Michael J. Ring
The Cellucci administration is out of control.
Last week a firestorm erupted over revelations that the Big Dig, the massive public works project to bury Boston’s Central Artery, will cost $1.4 billion more than previously expected, bringing the price tag to a whopping $12.2 billion -- for now. And James Kerasiotes, the acerbic head of the Massachusetts Turnpike Authority, the agency that oversees the Big Dig, was quoted in the Wall Street Journal as calling one of Cellucci’s political aides a “moron”, the new head of the Massachusetts Port Authority a “reptile”, and even suggesting that Governor Paul Cellucci is afraid of him.
All this, remember, is on top of the Jane Swift scandals -- babysitting aides, taxpayer-funded helicopter rides, and a general disrespect for the public of the Commonwealth of Massachusetts.
The Swift scandals were trouble enough because of the extreme contempt showed for working parents by the lieutenant governor, who sought special privileges to take care of her daughter. But the new crisis unfolding around the Big Dig -- a billion dollar blunder -- is much more serious and damaging. Kerasiotes has conceded that as early as October, he knew the old $10.8 billion price tag was incorrect. Yet he refused to come clean publicly with the extent of the overrun until his hand was forced by State Treasurer Shannon O’Brien. Now the federal government is circling above the Big Dig, demanding answers for what is happening to all that money thrown into those seemingly bottomless pits along Atlantic Avenue.
The Treasurer’s Office has confirmed that the federal Securities and Exchange Commission is now investigating the state’s bond issues over the past several months. The state did not detail expected Big Dig cost increases in papers relating to the issuance of those bonds. And a recent increase in the state’s bond rating is also now under suspicion.
If Massachusetts lied to or misled investors, public officials responsible for the omissions could face fines or other punishment. Even more seriously, the state could be sued by bondholders, just as several investors in the construction of Denver’s new airport sued when that project turned into a boondoggle and officials were less than forthcoming with data.
And federal transportation officials have made it crystal clear they are fed up with stonewalling on the Big Dig. The Department of Transportation claims project officials withheld information during an audit last year, and is threatening a subpoena to obtain the documents it wants. The Department of Transportation’s inspector general now believes the revised cost estimate of $12.2 billion is $1 billion too low.
The Big Dig has become such a big mess, the crisis du jour has spilled over into presidential politics. The pork-busting candidate and Senator John McCain (R-Ariz.) may reintroduce a bill to yank $150 million of federal funds from the project.
The cost overruns and swirling allegations are only half the problem surrounding the Big Dig. The rest of the problem is the leadership vacuum in the corner office on Beacon Hill.
The governorship of Paul Cellucci has been unimaginative. His brand of steady, don’t-rock-the-boat leadership is fine when state affairs are humming along, but the Big Dig is in big trouble.
The first solution floated to solve this crisis was both discriminatory and too small to solve the funding gap. Accelerated toll increases on the Massachusetts Turnpike, Tobin Bridge, and harbor tunnels would punish a small percentage of the state’s population (and in the case of the Turnpike, a segment which hardly uses the Central Artery) while giving other commuters a free ride. Additionally, the $1.4 billion funding gap is so immense, toll increases alone would barely do anything to close the cavern.
That solution has been discarded in favor of reinstituting motor vehicle registry fees. This solution is more equitable as everyone pays the same fee, but still registry fees alone cannot cover the wide shortfall.
For Governor Cellucci to regain control of the Big Dig -- and his administration -- he needs to take the following steps immediately.
1. Postpone his quest to reduce the state income tax to five percent. Cellucci’s tax cut, which will likely appear as an initiative petition on the 2000 state ballot, is simply irresponsible with a potential federal investigation and billion-dollar crisis hanging over the Commonwealth’s head. Postponing this attempt at a tax cut for several years will produce the revenue desperately needed to cover the Big Dig shortfall.
2. Pressure James Kerasiotes to resign as chairman of the Massachusetts Turnpike Authority. As long as Kerasiotes is running the Big Dig, any figures coming out of the project must be regarded as untrustworthy. His failure to come clean in October with at least a ballpark estimate of the cost overrun undermines the Big Dig. Throughout the project, Kerasiotes has unleashed venom on public figures such as ex-state Tresaurer Joseph Malone who argued the Big Dig was not “on time and on budget,” to use the administration’s mantra. But Malone and Company were right after all. The project needs a leader who is completely and totally honest and forthcoming with the bondholders and taxpayers, and Kerasiotes has not been that leader.
Additionally, any reluctance on the part of Cellucci to take swift, harsh action against the Turnpike chairman only makes Kerasiotes’s claim that the governor is afraid of him look true.
3. Publicly, unequivocally state that the $12.2 billion tag is not final, and costs could again increase. Everybody knows that more likely than not, costs will go up again. From Day one of this project, the cost has been consistently underestimated. This creativity with the numbers helped sell the project to a skeptical public, but if the administration refuses to concede further increases the voters of this state -- and federal officials examining the project’s aid -- will be even more skeptical.
4. Institute tolls on Interstate 93 and the Southeast Expressway. These are the two expressway approaches into Boston which are currently untolled, and these are also the approaches which benefit most from the Big Dig, which is essentially a north-south project. It’s only fair that the heaviest users of the corridor pay for it themselves instead of having their use of the highway subsidized by other drivers.
Paul Cellucci barely won the governor’s office by continuously hammering themes of fiscal responsibility. Now is the time to deliver on those promises. The Big Dig’s big mess is testing the fiscal competence of his administration, and the early grades are not good. The buck should stop in the governor’s office, and Cellucci must come up with a fair plan to cover the Big Dig shortfall and reassert control of the project. Anything less and his remaining relevance will be destroyed, and the governor will have nothing to do but count the days until a Democratic governor takes the oath of office in January 2003.