2025-04-03 00:00:00 - Joint Committee on Ways and Means

REP MICHLEWITZ - Okay. Alright. We're going to get started. My apologies for being late. Welcome to the ways and means hearing on the FY 25 FareShare sup, that we are, taking up today, house bill 55. My name is Aaron Michlewitz. I'm the house chair. I'm joined by my colleague, chair Mike Rodrigues from the senate. I'm just going to read off the members of the house that are here, and then kick it over to my colleague here. So, starting on my left here, we have the vice chair of the committee, representative Ann-Margaret Ferrante. Next is the assistant vice chair, representative Kip Diggs. Next, further to the left is the house house Republican ranking minority member, representative Smola. Next name is representative Marsy, then representative Elliot.
To my right on the house members is, representative Kerans, representative Kilcoyne, representative, Higgins. Down here on on to my left, in the front row, representative, Judith Garcia, representative, Kelly Pease, representative, McKenna, representative Xiarhos, representative Scarsdale, representative Holmes, representative Beal, representative Sabadosa, representative Owens, representative Howard, representative Moran. And as we like to say in the cheap seats, we got representative Kasner, we got representative Duffy, we got representative Mendez, representative Chasen, representative Montano, representative Souza, representative Hamilton, and I think that's all the house members. And representative Sullivan-Almeida is walking in, and representative Hawkins got his hand raised as he's walking in right now. Alright. That is all the house members. I'll turn it over to my senator colleagues.
SEN RODRIGUES - Thank you, mister chairman. Good afternoon, everyone. I'm happy to be here today. I am joined in no particular order other than when I recognize them. My vice chair, Senator Joe Comerford, my assistant vice chair, Senator Paul Feeney. Joining us also is Senator Nick Collins, Senator Jake Olivera, Senator Crighton, Senator Rush, Senator Miranda, Senator Brady, Senator Cronin, Senator Mark, and Senator Dooner. Now, did I miss anyone? It's always a fear when you're starting. Joe, so thank you. We are150 happy to be here, and engaged152 with all of you. Thank you.
MICHLEWITZ - HB 55 - So once again, I want to thank everyone for joining us today.158 We're just going to do a quick brief over opening remarks and then, turn it over to our first panel. So today we are hearing house bill166 55, the governor's proposal on how168 to spend the more than $1.3 billion in surplus from the FY 25172 FareShare revenue. Given174 the size of these surplus funds176 and since this is the first time we are using this type179 of revenue in this manner, we felt it was appropriate to have a public process to hear the administration and stakeholders view on how best the Commonwealth can invest this money. This process marks the completion of seeing what a full cycle of the FareShare revenue will produce for our education and transportation sectors.
As we currently enter a third budget cycle where the FareShare funds have been available to be spent, we in the legislature have taken great pride in the investments these funds have been making into new programs that are helping all our residents.211 Universal school meals, free community college, and much greater investments into the MBTA, RTAs, and early childcare. These programs and more are accomplishing precisely what the FareShare of money was intended to do, fostering a stronger and more equitable Commonwealth. Now with this large pot of one time surplus funds, we have a unique opportunity to further that240 progress. Given that many of the worthy programs that have been funded in the annual budget process have been in the education sector, it is entirely appropriate that the majority of these onetime funds in this round be spent in the transportation sector of our economy.
When the FareShare amendment was pitched to the voters of the Commonwealth in 2022, it was presented to be distributed evenly between education and transportation funding. This supplemental budget will allow us to fulfill that commitment. Today, we will hear from senior members of the Healey Administration, secretary of A&F Gorzkowicz, education secretary Tutwiler, and transportation secretary Tibbits-Nutt to hear more of the administration's proposal. Then we will hear from a number of stakeholders from both the education and transportation sectors and how these funds can better approve the Commonwealth. We also289 encourage all those who aren't testifying today291 to submit written testimony to our committees so we can hear from as many members of the public as possible on this issue. Thank you again, and I look forward to hearing from everyone today. And with that, I will turn it over to my counterpart, chair Mike Rodrigues.
RODRIGUES - HB 55 - Thank you, mister chair. Good afternoon, everyone, and welcome to this public hearing regarding House Bill 55, an act making appropriations for fiscal year 2025 to provide318 for supplementing certain existing appropriations of the so-called FareShare324 surplus supplemental budget filed by governor Healey. I would like to thank our partners in the house, chair Mike Michlewitz and his team, the House Committee on Ways and Means, for the continued partnership as we work to chart a fiscally sustainable path forward for Massachusetts through the fog of this342 ongoing economic uncertainty. With today's hearing, both the house and senate will348 hear directly from the administration along with distinguished panelists about their proposed plan to appropriate $1.3 billion in surplus FareShare funds available from FY 24 to support our Commonwealth's education and transportation systems.
This hearing marks an important step and presents us with a unique opportunity to consider the governor's proposal and make our own decisions on the fate of these surplus resources and the directions we want to collectively take. Knowing how critical and important it is to direct FareShare funds to386 improve the quality of life for our residents, we will consider ways to prioritize regional equity and support393 one time education and transportation investments that strive to benefit communities in every corner of the Commonwealth. After all, there are many critical and unique needs before us in the education and transportation sectors. Whether it's in the public higher education space, K through 12 education, the MBTA, regional public transit authorities, and local417 roads and bridges, we know how vitally important these are to the state's broader economy and our efforts423 to advance competitiveness.
However, these FareShare revenues are limited, so we must be mindful of this dynamic because any decision we make to dedicate these resources will determine whether we create challenges for the structural balance of the budget once these one time revenues are depleted. It's fair to say that we are committed to maximizing the impact of these FareShare funds and making meaningful investments in our public transportation and education sectors in a454 fiscally responsible and sustainable manner without undermining the financial integrity of the Commonwealth. To that end, we in the senate stand ready to work with the administration and466 our friends and partners in the house as we develop a concrete plan recognizing the one time nature of these funds and the unite unique opportunity in front of us to make thoughtful investments that support education and transportation initiatives in a regional and equitable manner.
I look forward to hearing from our friends in the administration along with the distinguished panelists who we have invited to appear before us today as we lay the groundwork on how to responsibly invest these One time resources and support initiatives to reinforce our state's economic foundation, boost support for quality public education, and bolster the state's transportation infrastructure. Thank you all, and I look forward to today's testimony.

SHOW NON-ESSENTIAL DIALOGUE

MATTHEW GORZKOWICZ - ADMINISTRATION AND FINANCE - HB 55 - Great. Thank you. Good afternoon, everyone. It's a pleasure to be here. Thanks to you, Chair Michlewitz, Chair Rodrigues and the committee. It's a pleasure to, once again, be able to present, what I think are some really exciting innovative proposals that the administration has advanced, to,565 advance some of our priorities, particularly, given the nature of of the revenue and, the unique opportunity that we have, to make some meaningful, changes and, for a lot of the priorities we could equally share. I am Matthew Gorzkowicz, secretary for administration and finance, and I'm joined, as the chairman said, by our secretary of transportation, Monica Tibbits-Nutt and Dr. Dr. Patrick Tuckweil, secretary of education, secretary of education.
We are pleased to be here today to present our supplemental budget for surplus FareShare revenue from fiscal year 2024. It's been over two years since the voters approved the FareShare surtax, and our administration has carefully and successfully worked to deploy these funds to make610 quality education and transportation more accessible and affordable for all Massachusetts residents. In partnership with the legislature, we have stabilized the childcare sector, launched free community college, increased Chapter 90 support for municipalities, expanded regional transit authority services, and much more. We have achieved these results in part due to our strategy of not just spending the surtax dollars, but leveraging these funds to create new bonding capacity for capital projects.
This bill, the spare share sup before you, builds on that642 successful track record and proposes investments that will continue to transform education and transportation here in Massachusetts. As we have previously testified, we have taken a fiscally responsible approach to budgeting surtax given that it is a new revenue stream656 without an established track record. Within that context, we agreed660 working with the legislature through our consensus revenue process to limit spending of surtax dollars to $1 billion in fiscal year 24. We did that knowing that fiscal year 24 was the first full fiscal year that we would be collecting surtax revenue. Since then, we have responsibly increased the limit a little each year to $1.3 billion in the current fiscal year 25 budget684 and then finally to 1.95 billion in the fiscal year 26 budget, which you will be considering very shortly.
As you know, surtax collections have outperformed projections within with the state collecting nearly $2.5 billion in fiscal year 25. That is what brings us here today and the bill before you which appropriates $1.3 billion in surtax revenue that was collected in708 excess of the consensus revenue estimate last fiscal year. This bill proposes to spend a total of 857.5714 million for transportation and 462.5 million for education. When taken together with surtax appropriations in the fiscal year 26 budget, our house one budget, we recommend a nearly 50-50 split between the two sectors. So we're essentially looking at all of the resources available to to date and making sure they're divided equally between education and transportation. And I want to emphasize that because our House One FareShare proposal and the SUP work together and should be considered as a package.
The SUP is weighted towards investments in the MBTA and transportation where we can make an impact with more one749 time recurring education, appropriations, and programming. This approach recognizes a significant need and opportunities in both areas, and we believe that an even split aligns with the will of the voters who770 initiated the surtax. From helping local cities and towns ensure safe transportation during winter storms to providing career and technical education grants, the investments in this bill will maximize the benefits of FareShare for communities across the Commonwealth. My colleagues can share more, but you will see how we try to use these surplus funds to address challenges like the extraordinary cost of special education for districts or replenishing critical reserves at the MBTA and invest in workforce at MassDOT and regional transit authorities.
As always, my team at A&F is focused on responsible fiscal management of our state resources. We are eager to continue putting FareShare funds to work810 for Massachusetts through a sustainable and812 responsible investment strategy. That's why I encourage you as you consider the supplemental budget before you to look at the entire suite820 of legislation that the governor has filed since January to know how those pieces and825 understand how those pieces fit together. For instance, we have also proposed not only expanding our innovative use of FareShare to leverage new borrowing for transportation, but to also expand that to the world of higher education. The Governor's House One budget proposes to use 125 million of, surtax for higher ed capital to address the significant backlog of deferred maintenance and carbon reduction projects at our campuses.
And that is the 125 million that will finance the BRIGHT Act, which is in our House One proposal. The strategy will also make it possible to enact Chapter 90 bill, which is a five year 300 million dollar plan that will not only increase funding for roads and bridges, but also give the municipality some predictability. So please, when you look at this particular bill, the FareShare sup, please also keep in mind the House One proposal, which also leverages some of the surtax and the operating budget as well as the Chapter 90 bill, the BRIGHT Act. They all work together and it's important to stand back and understand how those pieces fit together. And I I think the information that we've laid out for you tries to do that in a very, in a way that's sort of hopefully easy to digest. We look forward to your continued partnership, and look forward to working with you and902 answering any questions you have. I'll now turn it over904 to my colleagues, and my colleague secretary Tibbitsnutt.
MONICA TIBBITS-NUTT - MASSACHUSETTS DEPARTMENT OF TRANSPORTATION - HB 55 - Good afternoon. Thank you, Chair Rodrigues, Chair Michlewitz , and esteemed committee members. My name isMonica Tibbits-Nutt. I am the secretary and CEO of the Massachusetts Department920 of Transportation. As secretary Gorzkowicz said, thank you for your continued partnership and926 support over the years and for the opportunity to testify today on House Bill 55,931 which appropriates surplus FareShare funds to strengthen our state's transportation system and937 infrastructure. Whether you drive to work, ride the T, bike, or rely on safe roads and bridges, every one of us depends on transportation that is reliable, resilient, and well maintained.
951 As951 we navigate a challenging fiscal environment, we remain952 firmly952 committed to making responsible, equitable, Massachusetts residents. House967 One reflects this commitment. It is a balanced, forward thinking budget that builds on our administration's successes while maintaining fiscal discipline. It977 safeguards critical programs and services across all 351 cities and towns, even as we manage modest revenue growth and increasing pressures. In addition to the surplus FareShare funds, Chapter 90 funding remains a cornerstone of our commitment to supporting local infrastructure across the Commonwealth. These dollars are critical for cities and towns.
Allowing them to address essential repair and improvement projects, including small bridges, road resurfacing, and other community specific needs. Programs like our small bridge program exemplify our dedication to safety, travel experience, and better connectivity, especially in regions where even minor infrastructure upgrades can have a major impact. This year's proposal includes 100 million dollar appropriation for the Commonwealth Transportation Fund Debt Service. This strategic investment will unlock over1033 $5 billion in additional transportation funding over the1037 next decade, including $1.5 billion over five years for Chapter 90 reform with targeted improvements for rural roads.
$1.5 billion for road and bridge cycle management supporting long term infrastructure resilience and sustainability. These local and regional investments are vital to maintaining and modernizing our transportation network. They1063 also directly support the quality of life and economic vitality of every community in Massachusetts. The role of our regional transit authorities in delivering essential public transportation across the Commonwealth cannot be overstated. FareShare funding provides an opportunity for affordability for riders. At its core, this work is about advancing regional transportation equity, ensuring that residents across Massachusetts, regardless of zip code, have access to reliable and accessible transit options.
I look forward to continuing engagement with both legislators and RTA leaders to better understand their evolving challenges and to explore potential updates to the funding these agencies depend on. By working together, we can ensure RTAs have the tools they need to thrive and serve their communities effectively. Together, these investments from Chapter 90 support to RTA funding reflects a broader unified vision, building a transportation system that works for everyone in Massachusetts. They are not just budget lines. They are the foundation of daily life for our residents.1145 Whether it's getting to work, making a doctor's appointment, or visiting family, these investments make those moments post FareShare revenue is already delivering results and the surplus allocation allows us to go even further. We're investing in safety, accessibility, and long term resilience with targeting funding to drive impact where it is needed most. 400 million for the Federal Transit Administration Reserve, helping to protect and maximize our share of critical federal funding. $300 million to replenish the MBTA stabilization reserve, ensuring fiscal health and operational stability, $67 million to continue the MBTA income eligible fair relief program, providing affordable access to transit for low income riders. $25 million for the winter resilience assistance program, helping municipalities prepare for and respond to extreme weather events. 25 million for regional transit authority workforce initiatives, including CDL cost assistance and targeted training to address staffing shortages.
$17.5 million to strengthen MassDOT's workforce and project delivery capacity, ensuring we can deliver critical projects efficiently and effectively. Dollars 10 million for micro transit and last mile innovation grants, supporting creative community driven solutions to transportation access. Each of these investments is designed to support a stronger, more connected Massachusetts, where every community from our densest cities to our most rural towns can rely on a transportation system that is safe, equitable, and built to last. This is about more than infrastructure. It's about delivering opportunity, expanding mobility, and fulfilling our collective responsibility to ensure every resident can move forward no matter where they live or1267 how they travel.
We fully1269 recognize the fiscal challenges ahead,1271 and we remain committed to being thoughtful stewards of taxpayer dollars, ensuring every dollar is deployed1277 effectively and with impact. House One strikes a careful balance. It protects essential programs while investing boldly in1286 the future of our transportation system.We are deeply grateful for the legislature's partnership and continued collaboration to ensure the FY '26 budget reflects both the needs of our residents and the realities of our economic landscape. Together in transportation, we continue to move Massachusetts forward. Thank you for your time and consideration. I will now hand it over to the secretary of education, Dr.Tutwiler.
PATRICK TUTWILER - OFFICE OF SECRETARY OF EDUCATION - HB 55 - Thank you very much. Secretary, I was prepared to use my teacher's voice and to shout my testimony, out, to everyone. But good afternoon, Chair Michlewitz, Chair Rodrigues, members of the joint committee on ways and means. My name is Pat Tutwiler, and I have the great honor of serving as your secretary of education. This afternoon, I'd like to provide a brief overview of the administration's proposal on how FareShare supplemental budget works in service of meeting the needs of all students in Massachusetts. I'd like to begin by outlining the five core values that drive the education secretariat's work to be more equitable, affordable, and accessible for all students and families and educators.
Advancing equity and inclusion, maintaining a holistic perspective, embracing collaboration, championing innovation, and centering fulfillment. Governor Healey's FareShare supplemental budget is meaningfully anchored in these core values and will expand existing efforts that are currently working well to close gaps and provide all students with a high quality education, as well as seed new initiatives that can improve learning outcomes and the success of our students. Addressing inequitable gaps in student access and success starts in early education, providing meaningful experiences and closing the gaps before a student enters kindergarten. The governor's FareShare supplemental budget proposal includes $50 million to support universally accessible, affordable preschool access through the Commonwealth Preschool Partnership Initiative or CPPI.
Through the budget and FareShare supplemental budget, we are proposing $25 million for FY 25 FY 26 to maintain current grantees and $43 million to expand access over three years, enabling current grantees to add more classrooms and more affordable seats, as well as allow new communities to join with a focus on gateway communities and a long term goal for affordable access in all cities and towns. We also propose $100 million for early education and care capacity building, family access and affordability, and workforce support, as well as support for implementation of the early education and care task force recommendations. No doubt, there is a robust conversation in the preschool and early elementary1485 sector on literacy. Literacy skills are foundational to a student's ability to learn in all content areas and disciplines throughout their educational career.
More broadly though, this is a foundational skill that impacts the quality of one's life. We propose a $25 million early literacy high dosage tutoring initiative, which will support 10,000 students toward reading proficiency. Public schools would partner with approved providers to accelerate literacy growth for students in kindergarten through grades1518 three with a priority on first grade. The investment will complement the more systemic long term work happening under the governor's literacy launch initiative. The proposal also works in service of broad based literacy, English acquisition, and workforce readiness efforts for adults. The governor's supplemental budget includes $30 million for adult basic education, English for speakers of other languages, literacy services.
Over the next three years, this funding will expand capacity to serve an additional 10,000 learners to address the growing wait list for ESOL literacy services. The administration has been working in earnest to reimagine high school. This is a substantive effort to strengthen pipelines to high demand careers and also deepen relevance of the high school experience for high school students. The governor's supplemental budget includes $32.5 million to deepen our investments in early college, innovation career pathways, and career technical education programs. Early college programs enable high school students to take college classes and earn college credit at no cost. We want to expand these programs to reach over 20,000 students by the year 2030.
Similarly, we want to expand innovation career pathways to more than 25% of the state's public high schools, giving approximately 10,000 students access to applied hands on coursework, and work work opportunities in high demand industries. In addition to the $32.5 million dollars, this proposal includes a $75 million, proposal to add more than 3,000 new seats to career and technical education opportunities across both comprehensive high schools and career tech educational schools over the next three years. Providing the pathways and experiences is a big piece of reimagining high school. Advising provides the critical foundation. My Career and Academic Plan or my CAP is an evidence based student centered multi year planning tool that enables students to plan for their academic, personal, and career success in high school and beyond.
This funding will expand my CAP to an additional 60 districts with over 200 schools in 150 districts currently having already engaged. Finally, the supplemental budget includes $150 million for the special education circuit breaker. We know that special education and transportation costs continue to grow. With the FY 26 budget, we are proposing $682 million for special education circuit breaker, a 24% increase from last year for full funding of the account. As secretary Tibbits-Nutt said,1704 we are currently navigating a changing federal landscape and know1708 how important state funding is at this moment. We believe that these investments are the right ones to meet the moment, addressing some of the largest equity gaps in education today, and providing a solid foundation for success going forward. We deeply appreciate your partnership.
MICHLEWITZ - Okay. Good. I just want to make sure you don't want to fuck you. I'm close. Thank you all. Thank you for the testimony, and for, again, your partnership and the work here. I'm going to open it up with a couple of questions, then turn it over to my counterpart and, obviously, to the members of the committee. And I secretary Tutwiler, I want to start with you since, you did touch upon the special education circuit breaker costs. And I know there are things that are addressed here in this, in this piece and then also with the FY1764 26 budget. But I think, obviously, we're hearing it from, we hear from a lot of members. Obviously, they're1770 hearing it from a lot of superintendents, related to this discussion.
Just it's, it's been somewhat frustrating over the last couple of years on trying to understand why we're missing the mark so so much on this number when we're trying to project out these costs annually, that we're trying to play catch up, and we may we may have an opportunity here with this with this piece to do that, but I think the concern here is related to just how we're just missing the mark so much on the on on on the projections. Yeah. Can we talk a little bit about what are the options to try to kind of figure out where we can go with that to kind of get a little bit more predictability, related to this discussion going forward just as we're trying to balance our our budgets in these obviously difficult times?
TUTWILER - Yeah. I really appreciate that question, and will acknowledge that I too hear frequently from superintendents across the Commonwealth about the challenges of special ed funding, and in particular out of district, costs, the cost related to transportation, as well. I think part of this is, getting more settled, in the context of the Student Opportunity Act. Right? It's been hard to sort of project once the instructional costs are covered what's left, for reimbursement around transportation. In the current year, we're looking at about 44% reimbursement. Last year was around 57%. What we've proposed in FY 26 will get us to the full entitlement, the instruction cost covered plus 75% reimbursement for transportation, which is what the entitlement calls for. And so I would say part of it is just getting settled with the Student Opportunity Act, but I think we're in a much better place now to make projections going forward. And I'm not1876 sure if, secretary, you1878 want to add anything to that. The look on his face is no, but that that's my, that's my response.
MICHLEWITZ - Yeah. The, and I appreciate that. So, I mean, the feeling is that in the next couple years, we'll be able to get a little bit more predictability related to that in. Okay. I appreciate that. I hope I hope you're correct in that sense. The other thing I wanted to talk about is a little more timely, and not necessarily directly related to what's in the FareShare, but, obviously, the discussion around education funding, and that's obviously what happened on, I think, Monday, in, with the, with the federal government clawing back, about $100 million or whatever the exact number was. I'm not not a % sure, but, previously allocated funds to local school districts, has left obviously some of them in much in in much power related to, you know, immediacy on that number. Can you just give us a little understanding of how we got to that point? And it is what is what is this money going to mean for those school districts and how should we be approaching that conversation going forward?
TUTWILER - So, just for everyone's edification, we received no notice from, the United States Department of Education, on Friday at 5:00 PM, that they intended to take back, approximately 106 million from 20 school districts across the Commonwealth who are still working to spend down their ESSER funding. The vast majority of these dollars are, sort of angled towards, facilities, challenges. Right? HVAC challenges, making sure that there's proper air circulation in buildings. Having been a superintendent during this period of time and having led one of the districts that's on that list, I can tell you that it was hard. It's hard to spend those dollars in the amount of time that was allocated.
And so, whether there's supply chain issues, labor shortage issues, there are delays in making sure that these projects are brought to completion. And so, in the month of March, there was a request from the administration to, or an opportunity for districts to apply for an extension. Those 20 districts applied and were granted that extension. And then Friday, we got a notice, essentially saying that there's a different tune, and they have the opportunity to ask again, but ultimately, the suggestion is that those dollars would be coming back. And2031 so because, for the vast majority of these districts, this work is underway, in process, this would ultimately mean, a real challenge around finding a way to complete them.
I think it differs per district. Some districts have a relatively small amount of money left. Some districts have a significant amount of money left and would be hard to sort if this is not the kind of funds that you find in your seat cushion, so to speak. And so, right now, the message has been, that we'll sort of understand what the opportunities are. We work closely with the attorney general's office to determine whether or not there's a legal path forward. But this is going to create a real challenge for those 20 districts. I should also name that some of those dollars were being used for direct services to students, high dosage tutoring and math, mental health supports. And so, this will have an impact.
MICHLEWITZ - Thank you for the clarification. Obviously, it's moving. A very fluid discussion, taking place, and so I appreciate you taking the time to kind of delve into that. Secretary Tibbits-Nutt, wanted to ask you a little bit about the MBTA, and I see the general manager is here as well, and thank you for being here. More in relation to the reserve replenishment proposal, that's put in place here, by the governor. Trying to get a sense of where we stand on operational costs and gaps that we're going to be facing for FY 26 and maybe even beyond. I think that's something that we've heard a lot of speculation related to what the most potential numbers will be.
I think we need to feel like we need to have a better sense of what exactly it could be. I don't know if if we have any further clarification on exactly what what we're looking at, from the MBTA's operating costs in terms of particularly for FY 26 as we craft the budget, but also with this opportunity here with the FareShare and how to approach it and what that gap is actually looking like. And if we're not able to fulfill that necessarily, how are we going to adjust, you know, to to get to that to get to the, you know, those numbers and make and balance those books in the right way? So.
TIBBITS-NUTT - You want to take this, or you want me to just go ahead and take a shot? Okay. That has been the fantastic thing about this proposed budget. It is actually closing this for the t for the next fiscal year. Going forward, the general manager and his team have done a fantastic job of controlling costs and especially around their project projections. So we feel confident that for the next fiscal year, that they have the resources they need as we're going into FY 27. It'll just be another reevaluation to make sure that they're living within their means.
MICHLEWITZ - So this full $300 million is going to clear, in terms of any potential deficit, pieces that we may and I'm sorry. And the proposal that was made in H 1, we'll get to the we'll clear any potential, deficit issues we may face with the MBTA for FY '26?
TIBBITS-NUTT - Stabilizes for FY '26. Yes, sir.
MICHLEWITZ - It's good to know.
GORZKOWICZ - Mr. Chairman, if I could just, there's two pieces to this up. It's the $400 million for the FTA safety reserve, which also funds a lot of the employees doing the critical work that's necessary that offsets payroll costs. That, in combination with the $300 million is the proposal that's needed to help address the fiscal cliff that the t is experiencing. That combined with what we're proposing in the House One budget, which is operational, dollars going forward, is really taking a multiyear look. This is something that we spent some time with the Transportation Task Force looking at, and the recommendation was put forward to, again, really stabilize it, addressing their needs, over the next several years to be able to continue to do the work they're doing to improve service and increase ridership.
MICHLEWITZ - And then one other piece related to that is the, is related to that safety and workforce reserve, which, obviously, We've been supporting in previous budgets, and we'll want to continue to work with you guys on that. I think the one of the questions I've been getting is related to the FTA's, corrective action plans and, the timing of that is supposed to be finished up within FY 26, if is that correct in kind of saying that? Do we have a time line on exactly when that what the what that timing looks like in terms of, how that you know, we are talking early to FY 26? Are we talking later FY 26? So do we have any more concrete timeline on that?
TIBBITS-NUTT - The general manager feels confident that in this House One proposal that they're going to be able to meet the corrective action plans, not just those that were initially identified from the FTA, but as they've been doing additional work, any additional issues that they have found.
MICHLEWITZ - Okay. Thank you for that. Do you have any questions?Senator, Senator Rodrigues
RODRIGUES - Thank you, Mr.chairman. I know I do have some questions, but I also have a number of colleagues that want to ask questions. So we'll let them ask questions and we'll see if any of the questions I had were not ones that they had asked. But first of all, thank you want me to say thank you to all of you for appearing here today for your testimony and for always being available and accessible to us, knowing that if there are any questions that we have to follow-up with, you are always here to answer them. So I thank you very much.
MICHLEWITZ - Representative Smola.
REP SMOLA - Good afternoon, and thank you to the panel for your testimony here today. I appreciate the information that you've provided on this proposal. Secretary Tibbits-Nutt, I want to focus on the transportation component of this. As I look at the breakdown here, these numbers are a little jarring to some of us in Western Massachusetts, and I know that you're aware of the situation. And I think there's probably not a legislator that's on this panel that looks at this and says, for the sake of Western Massachusetts we are given our best shot here. But I just want to talk about a couple of numbers. You get $780 million here for MBTA focus. And $77.5 million, for the other categories which include Mass DOT, munis, RTAs, and micro transit. That's about the same amount that you have budgeted just for low income fare reserve on MBTA. And that's troubling, I think, to me and to a lot of my colleagues in Western Massachusetts.
And I get the fact that the MBTA is a big system, and we don't want it to fail. I think we all recognize its importance. But in the rural part of the commonwealth, where transportation is always the top concern, it doesn't matter what we're talking about. If we're talking about health care, we're talking about education, we're talking about employment, the primary issue at the top of the list is always transportation. And that equation is different for the rural part of the Commonwealth because we don't have the same options that everybody else does in more densely or higher populated territories. So has the Commonwealth conducted an analysis about the investment that we make on MBTA riders compared to RTAs? Like, what's the dollar amount that is being spent and invested by the Commonwealth by comparison? MBTA riders versus anybody that's using another mode of transportation like an RTA system. Do we have a breakdown about that?
TIBBITS-NUTT - We do, but I don't have it in front of me. But we do. We have by ridership for the RTAs, not just as a collective group, but each individual RTA in addition to the ridership from the MBTA. But as you pointed out, the investment in the T is significant and is much more significant than our regional transit authorities.
SMOLA - How would you recommend it, especially when when this proposal came out, we all in Western Massachusetts heard from people that this didn't look like equity or anything close to equity. And, you know, again, I've said this at these hearings before. We toss that term around loosely, but these numbers are tough. How would you recommend those of us in the rural part of the Commonwealth go back to the constituency we represent, the same constituency that the governor represents, and deal with this issue and2546 say, look. We've got a $780 million investment that's being proposed for these funds. Again, this decision was made at the ballot. So, you know, I accept that, and I think we all have to accept that. But the breakdown of these funds is a really, really difficult pill for a lot of people to swallow in other parts of the state. So how would you recommend we go back and we try and convince folks in other parts of the Commonwealth outside of the MBTA system.
That, yep, $780 million versus the other pot of money, which is less than $80 million. Pretty good investment for transportation. And meanwhile, every single year, there's not, again, a member in Western Massachusetts or rural Massachusetts that isn't hearing from the municipality constituency that we need more money in Chapter 90. Right? They are all begging us. You brought up the small bridge program, and I mentioned at the hearing a couple of days ago, a great program. Excellent. We appreciate the investment that the administration is making on that. We appreciate the other, positive steps that the administration is making on transportation initiatives. But this one is a tough one.This is these numbers, when you look at them, are very, very hard to digest and to comprehend. So I'm trying to get a better sense sense from the administration about how we go back and we sell this idea when people feel it's woefully inadequate for the RTAs and other parts of the state.
TIBBITS-NUTT - Do you want to go first?
GORZKOWICZ - Sure. I would like to, if I could, take a minute to just take a stab at your question and then turn it over to, secretary for transportation. First, as I mentioned in my testimony, I think it's important that you stand back and look at all of the budget proposals that have been advanced, alongside this FareShare sup. And while you simply do the math the way2652 you've done it in the sup, I would argue that, that does look disproportionately unfair to Western Mass. However, when you look at the overall proposal, I think you should be able to go back to Western Mass with a lot of confidence in what we're proposing here. Out of an $8 billion transportation plan, nearly 5.6 per billion of it is outside of the MBTA.
Nearly only 25% of that plan is really going towards the MBTA. We have a billion five going towards, enhanced Chapter 90 program, which is turning it into a $3 billion a year program over five years with an enhanced formula, benefiting rural communities out in Central And Western Massachusetts. We are investing in our accelerated bridge program through investments in MassDOT, an additional $200 million going from zero, by the way, to $200 million for culverts, and investments in RTAs and their workforce. So the vast majority of the proposal, when taken holistically across all the items that we filed, is a very thoughtful plan. It's one that was developed through our work with the transportation finance task force and one that was meant to not only stabilize, but to begin enhancing our transportation services recognizing a different picture from what you have just described, to folks here today.
TIBBITS-NUTT - Just building off of this, I spent, as you know, a significant amount of time with our regional transit authorities, especially over the last year and a half. And the big thing we heard from them, workforce issues, number one, workforce issues. And I think the second part is a lot of discussion about the changes that they have made in their operations to not only provide more service weekends, evenings for their service areas, but also to cross service boundaries.
So for us, that's why we are committed to spending the next fiscal year working with all of you, working with our RTAs to actually look at the funding and how it is playing out with this new focus on workforce. But we understand the challenges. We understand that a lot of people are working very hard, as secretary Tutwiler said, to get to education, to get to health care, to get to employment opportunities. And we are really focused on increasing those opportunities and closing those gaps for the riders that are outside of the MBTA service area.
SMOLA - I appreciate that. Just the last comment on this, and then I'll close it up. If you can get us that information relative to the investment of the Commonwealth of the riders, those that are participating in MBTA versus other networks like RTAs in the Commonwealth, that would be helpful. I think it's going to give us a better grasp. I know this job isn't easy, and I appreciate the work that you're doing on this because this is a big mountain to climb. And, even with this investment, we have a long way to go in transportation. But I would be remiss if I didn't, you know, bring up this question of when people see these numbers. And, secretary Gorzkowicz, I appreciate, you know, you talking about these other investments elsewhere. But, again, because we have this in front of us, it's tough to be able to connect those dots. And when the public sees this, filed in isolation. So I don't think I think we can do better with that message by getting it out there, especially when it comes to this question of regional equity. And I appreciate the time and the indulgence, mister chairman. Thank you very Much.
TIBBITS-NUTT - We will get you that data, representative.
MICHLEWITZ - Senator Comerford.
SEN COMERFORD - Thank you very much, Mr. Chair. Secretaries, all of you thank you. It is a terribly difficult time to govern, and we're grateful,transportation conversation. And specifically, I want to talk about micro transit. I agree that the governor has done an able job splitting this between education and transportation as the voters wished. And Secretary Gorzkowicz, I also agree that we have to look at H 55, the bill before us, you know, as a sister to H 1, right, so that we see the FareShare, money across both bills. I think that's very important. If my math is correct, as we look at H 1 and next to H 55, 79% of the spending is going to the MBTA, 8% is going to2912 the RTAs. So I'm just going to2914 pull2914 those two out now and look at them with you.
So I think about my own FRTA in Franklin County. Secretary Tibbits-Nutt knows this very well. You have been there, secretary, and you've talked to the people. So right now, nine communities in Franklin County have no service whatsoever, double2935 that have no fixed route2937 service. You know, I think that it's hard, we'd be hard pressed, in Eastern Massachusetts to see a community not served by an RTA. Right? Yet in rural communities, we still have no buses running. And now I understand, right, Leiden, a community of 700, it's hard to send a big bus up into the hills of Leiden, but we can send a zippy little micro transit bus. Right? And we have in Franklin County piloted on demand service to very great ends.
But when I look at line 15-96-25-06, the micro transit 10 million, I see it's a grant program. Right? So not guaranteed to the RTAs. And you know as well as I do that small RTAs with fewer staff are less competitive in writing in being able to carve out the grant the the time to write the grants. And I wonder if we if you could react to an idea, say, to not make it a grant program, but make it a direct authorization, and perhaps what you would say if we said, can we carve out a bit more there so that the governor could say in this supplemental that in fact every community in the Commonwealth has some sort of RTA service? Again, with this as it is, I think I can't go home and say this, that we have a commitment through FareShare dollars, which our voters in Western Massachusetts campaigned hard for.
I just don't think it's super fair currently. Right? And I guess I'll say the last thing, which is in Western Massachusetts, we do, we do, we're aware that we pay a penny of our sales tax for the MBTA, and most of my people will never ride it. And we understand the whole Commonwealth argument, right, that we need a whole commonwealth to do well. I just want to say that we understand that in Western Massachusetts. I want it to say I want us to see that on the other side, that when Franklin County can develop and we all can rise in3061 Franklin County, the whole Commonwealth will do well. Thank you for considering this, and I'd I'd I'd be pleased for your reaction.
TIBBITS-NUTT - And that's why we want to be having this conversation over the next fiscal year because I think it's not only about these grant programs, It is also how are we better partners around technical assistance to the regional transit authorities, but we want to have this conversation about the grant programs and about the current funding and how we structure it.
COMERFORD - But, secretary, if we wait a year, we will be yet one more year behind with no service in these towns that are declining population at a pretty significant rate. So I'll leave it there. Thank you, Mr.Chair.
MICHLEWITZ - Thank you. Representative Holmes.
REP HOLMES - Mr. secretary, Tutwiler, are you familiar with the conversation that's happening, on 2 sides about, how we should spend3119 this and if the money should be if there's a more expansive view of where the money should be spent or it should just be in public schools. Are you familiar with this conversation yet?
TUTWILER - You might need to say a little bit more. I'm familiar with a lot of conversations, but I'm not this one.
HOLMES - So there are there there's there are activists who are saying that we should take some of the FareShare money and also, advocate for it to go towards some, education that gets us into more workforce housing I mean, workforce development and not simply go into k through 12 and only public education versus, health centers and others who may be able to have access to the money. Are you familiar with this conversation yet?
TUTWILER - I'm not aware of that specific conversation, but it's one I would deeply be interested in engaging because I would say definitively the way that we're leveraging these dollars to win in the education space is uniquely focused on workforce, pipeline development. And so I'm not familiar with this specific thing that you're raising around that.
HOLMES - Maybe beThat's not clear. I see both sides of the conversation in the room. I'm trying my best to do just one, understand if you're familiar with it. If you're not, then, I am sure the black and Latino caucus, we will send you over something to give you a little bit more information about it. How about I start there? And then we can have another conversation after That.
TUTWILER - Greatly appreciated. Not trying to wiggle out of the question. I'm just not familiar with it, but3219 happy to talk about how these dollars3221 work in service of workforce development, if you would like.3225
HOLMES - But let me guess, I can ask it this way, from your perspective, are the FareShare money only for public k through 12 and public universities?
TUTWILER - Probably want to lean on, Secretary Gorzkowicz was to say more, but my understanding is that these dollars are for public entities. Right? For public education.
HOLMES - Only. Okay. No problem. Well, I just want to make sure I understood what we were today.3260 Yeah. Alright. We're going to try to continue.
TUTWILER - Got you.
HOLMES - No. No. No. I haven't got you yet. But I'll send you. We're getting your way. Yep. I don't want to throw you a curveball at this moment. Alright. And then my other question was around transportation. Madam secretary, as you heard me say on Tuesday, I'm still very disappointed with3282 the R&V. I heard the registrar, really comment on Tuesday, a sincere belief that our R and V is working well because it's all by appointment. And and from my perspective, that has truly emptied our R&V's because you go there now because it's by appointment, and you have all these seats and they're empty because of the fact that from her analogy of the way she gave it as a perspective, the R&V used to be treated as an emergency room. And now, this appointment by appointment only gets things really, really settled.
And my comment to her, as you heard, the other day is that emergencies are still happening. There's just no emergency room to go to. Right? And so you still have it so that folks are learning about they need to get their license today. They didn't realize all of the things that may have happened from a fee and a fine, and they can't go and get their license or whatever. And in this new budget, it seems like we have a lot of things listed. My big question is COVID has changed the way we view many, many things. Many people don't want to go to work. They want to work from home, all of those things. But in so many ways, it seems like we are hiding from constituents. Like, we're going to hide behind an appointment.
We're going to hide behind. You need to, send me an email. going to hide behind a voice mail. But those who are most in need still are going to want to show up to an R&V, which is where we most of the time interface with transportation. Is there, in any of this, has your office and the r and d just gotten content that we're going to always just be appointment only or to I'm going to use just her analogy since that's the one she used. Hospitals would like everyone to show up to their doctor. Right? That's what they would love it that we did, but they still have an emergency room in case something goes wrong in an emergency. And there seems like there must be a way that maybe we could have it so that appointments were freed up at a certain hour every day, that we had maybe just a long, long, long wait time, and at least one person worked in the registry to deal with the emergencies.
I love it when Saint Elizabeth used to have it where you can see them literally on their board, they would say the wait time in our emergency room right now is five minutes or whatever. You know? It used to be that you could kind of figure out in the R&V which one you want to go to because this time was long and this one was not. Are we with all of this money from a FareShare? Is there not a place that we can at least make it so that when these emergencies happen, that people can be served today and not have to wait. I gave the emerge I gave the analogy. I had to drive an 85 year old to Fall River because he couldn't get an appointment for three weeks when he learned his license was about to expire. That does not seem appropriate. So are we ever going to go back to being able to have it so that we still serve emergencies at the R&V?
TIBBITS-NUTT - Thank you. We do track very closely when we are having issues with people getting appointments and complaints that come in about that. It's part of the real ID. There are certain registries where we have opened up windows for people who are doing walk-ins or doing simpler transactions, whether it's a registration, or reregistration. So we do have the ability to do it. We've done it in a number of registries. This is just not a practice that we have across all of our registries.
HOLMES - So, again, you're saying, no. We're not going to go back to being able to handle emergencies. That is just not the philosophy that we're going to have in the future.
TIBBITS-NUTT - We will not go back to only being able to handle emergencies.
HOLMES - Yes. But, we have a path for emergencies, like, literally some solution that appointments open every single day. Someone's going to be able to have it. So will there ever be a plan again to be able to handle the emergencies3535 of people, or is it just an appointment only? Do you have an idea on that?
TIBBITS-NUTT - We will continue with the registries where we are seeing the most customers to be able as I said, we're doing it for Real ID to be able to take emergencies. But also as part of this, we have open appointments throughout the day that are not completely booked. So if someone comes in and they need an appointment, we have appointments at the registry for3564 them to be able to take that. Is it always available? No. It isn't.
HOLMES - Okay. I don't want to belabor it. It's not in Boston. Right? So, you know, from my perspective, it would be great to get the R&V back in Rosendale. I know that's a whole other conversation. But to have it so that we're trying to serve 700,000 people plus our neighboring counties and towns with one R&V at Haymarket. It is typically weeks if you learn today you need an appointment to get something there. And it is just as you're hearing about the western part of the state that they feel as though I can go many times on the appointment. And if I could drive out to Pittsfield, I could probably get an appointment in the next couple of days. That's not the way it is on the Eastern part of the state. So it's the reverse of what you're hearing about the Western part of the state for the R&V. I really wish someone would start to realize the emergencies are still happening, and we need to serve emergencies as well. Thank you.
TIBBITS-NUTT - Thank you.
MICHLEWITZ - Senator Feeney.
SEN FEENEY - Thank you, Mr. Chairman, and thank you, to you all for the work that you're doing and for testifying today. Questions, Secretary Tutwiler. And I enjoyed our back and forth, at the FY 26 budget hearing specifically about vocational and career technical. And I'm very appreciative of the administration. I think you had mentioned, in this particular bill, $75 million for career technical education, you know, to build out capacity. And I really do appreciate the new seats because as you know, that is something that we've been focusing heavily on, is how we build capacity. How does the administration intend to use that $75 million?
You know, one time investment, obviously, in FareShare, funding to ensure that capacity is built you know, in the workforce pipeline and the trades that actually need it. Right? So that we're not, we're not just educating for the sake of educating, but that we're actually, you know, creating synergy between, you know, especially in mechanical trades, electrical, plumbing, those things people are having trouble finding, you know, workers in that field. Does the administration have a plan to use that $75 million including, you know, increasing the amount of seats but to ensure that we're actually educating the workforce what are we facing? And then just a follow-up to that if I could. Is the administration taking action with that? Again, a very significant and important investment.
Is the administration taking actions, to make sure that we're we're we're helping kind of move those students into those fields. Right? So, again, you know, I always tell young students, look. There are no rules. You be you, and you do what you want to do. But if the The Commonwealth is making investments into CTE education, does the administration have a plan to say, look. We're we're going to make sure that that we're kind of ushering them3739 into those fields that we've educated them in so that they're not going and, you3743 know, taking electrical or plumbing or some3745 of the other trades and then saying, I want to become a CPA for my career. Right? So I appreciate the investment, but if, you know, if you can dig into that a little bit deeper, I appreciate it.
TUTWILER - Yeah. Really appreciate the question, senator. First, I would say, the the guidance or support around student decision making or student election around, you know, what path do I want to take and what am I interested in, really begins with the advising space, which is why I would really, lift up the importance of my cap, my career and academic plan, because that helps students understand what's available for them. How do I make a really thoughtful and careful decision around what path I want to take? Helps them sort of explore their entrance interests. It's an evidence based program. It's expanding very rapidly in Massachusetts. These dollars will help us expand it even further.
We've made an expressed, goal of3798 reaching every single high school in Massachusetts, but we've also begun to3802 expand these programs in middle school, so that the conversation around students' path forward, goal setting, identifying a path toward, a career that I'm interested in or might be interested in really starts in seventh and eighth grade. So I would lift that up first to your second question. The first question is, how are we ensuring that the kinds of expansions, the kinds of new shops, that are you know, these dollars would help, support the construction of, are actually servicing the high demands that we have. CareerTechEd schools are intimately aware of what the needs are in industry through their close partnerships.
They engage in research surveys plus student election sort of tells us a little bit about where we should be sort of, anchoring our dollars. So for example, years ago when I was the superintendent in Lynn, there was a radio and TV shop there when I first started, nearly no student signed up for it. There's no interest. The the industry demands aren't really there for that kind of instruction. Instead, there was huge demand around HVAC, advanced manufacturing. And so, we both started an HVAC program at LinTech and expanded our advanced manufacturing program. And I'm seeing that already happening subs that kind of sort of tradition happening substantively in career tech ed schools across the state. For example, we just recently celebrated the opening of a brand new HVAC shop at McCann Tech in North Adams.
This is not only going to, sort of satisfy the appetite, and the demand for people who have that skill set in that region of the state, and there's a huge demand. But also it allows McCann Tech to invite more students to come to their school. Right? The enrollment or or, availability challenge that many career tech ed schools experience is through the shop class size maximums. Right? They're only allowed to have a certain number3930 of students in a shop at a time for safety purposes. These dollars help us both, support those schools3936 with building new shops, expanding the3938 existing ones to allow for more students to be serviced, serviced3942 in those shops. And so, I would say there's a really thoughtful, attentive, process involved in terms of which types of shops are are opening, and I'm sure that these dollars will will will will definitely, serve a really important need.
FEENEY - Thank you, secretary. I just again, great answer. I just want to make sure that we are focusing on that every time we spend a dollar in career technical education, that we're doing it to get a return on the investment and actually, you know, make sure that we're maximizing the amount of people that are putting into the trades that are needed. So Right on. Again, Thank you. I think if we opened up a state government shop, maybe nobody would go into that particular shop. So, I appreciate the answer. Thank you, Mr. Chairman.
TUTWILER - For sure.
MICHLEWITZ - Thank you. Representative Diggs.
REP DIGGS - Thanks, Mr. Quick question. MBTA, outdoor advertising budget, what does that revenue bring in?
TIBBITS-NUTT - I don't know the total on this one.
DIGGS - How's that? Peter, could you could you Phil. Sorry. Phil, could you answer that question about the MBTA and how much the outdoor budget for the outdoor advertising?
PHILLIP ENG - MBTA - Representative, I don't have the specific information with me. We can certainly provide that to everyone. The one thing I will say is as we continue to see ridership come back, those are the discussions that we will have with the advertisers, with regards to, existing contracts and4046 the existing ability to actually do more advertising within our system. So those are the things4052 that we certainly bring back with the information regarding what kind of revenue we generate.
DIGGS - They're also asking if, if we could build a car wash, would that if they wanted, would that would that budget would that be able to be covered in that?
ENG - Sorry. A car wash in?
DIGGS - Zoning. Could they build a car wash if they wanted? More meaning, if if the if the exclusionary local local zoning covers, could that cover up car wash with the with the on that budget if it was covered?
ENG - Oh, meaning could the revenue from advertising cover?
DIGGS - Yes
ENG - Rolling stock car wash, train car wash? I'd have to check on that. We do have car wash facilities. One of the things that we're investing in our capital program, it's not only modernizing facilities, for instance, for battery electric buses as as we start to procure, receive them, but also ensuring that our existing facilities, can continue to support, the rolling stock that we currently have until new rolling stocks start to come in.
DIGGS - Thank you.
MICHLEWITZ - Senator Croner.
SEN CRONIN - Thank you very much, Mr.Chairman. Secretary Tutwiler, first, I just want to say thank you for all your work and all your leadership and focus on vocational education, expanding career technical opportunity and the governor's FareShare sup. You know, I think you spoke about reimagining high school, and I think this is an opportunity for us to shift the paradigm kind of around the controversy of vocational schools. Right? And I hope that as we look to invest new dollars and build more capacity, we can align that with kids who are going into the labor market.
Who are not pursuing post secondary education and will benefit the most from new programming and take the skills that they learn to benefit our local and regional economies too. With that in mind, I'm wondering if you can speak to how the administration is thinking about prioritizing investments, not just in our vocational schools, but in integrating Chapter 74 programs and vocational capacity, and programs into our comprehensive high schools. And and and I know there are innovative programs across the state that are aligned, new programs to juniors and seniors, and that population that is headed to the labour force. Could you speak to that? The opportunities there?Thank you.
TUTWILER - Absolutely. Thank you for the question. So, first, I want to just be clear that the $75 million is designed to create expansion of capacity, both in comprehensive high schools, your traditional, comprehensive high school and career tech ed schools. So if you've got a school that has a Chapter 74 program and is looking to expand capacity so that more students are able to engage in that experience, these dollars support that expansion. And so I just want to be clear that it touches both of those schools. The other thing that I would lift up really quickly is that in the reimagining high school, proposal, the 32.5 million$, there is an allocation, in there about $3 million that's designed to support Chapter 74 start up, for schools that don't have any Chapter 74 programs, but are interested in doing the research, planning, and exploration to bring one into their school.
There are dollars there to support that exploration as well. The other thing that I would, I think it's important to share that's not part of this explicit, budget conversation, but, in the bright bond bill, there is $100 million that is set aside for these skills capital grants. These are dollars that support, the modern modernizing of space, the purchasing of, equipment, for schools that are providing these work based learning experiences, whether through, innovation career pathways or other programs, so that students have access to the industry recognized, materials, the the machinery, the tools, to prepare them for, readiness, in in their, whatever field or pathway they take, after high school. And so, there is a holistic approach that we're taking here. It's not just, within the career tech ed schools. It is a holistic impact, that we think, you know, ultimately will have an impact.
MICHLEWITZ - Representative McKenna.
REP MCKENNA -Thank you very much, mister chairman. There certainly is a lot to digest in this presentation, and a lot of the questions that I had had been asked. So I appreciate the conversation we just had about TechEd, the VocTechs, as well as the CTEs. But to me, the most important thing was asked by Rep Smola, and I keep coming back to the apparent inequity in regional balance on transportation funding. And so,4363 though I had it in my head when Rep Smola asked the question, I'll take credit for his question, and just want to amplify what he said. That it's not just Western Mass that feels this inequity. It's Central Mass. It's The Cape and The Islands. It's the North Shore, the South Shore. And I would argue even those areas with a commuter rail MBTA access, see a fraction of the population of those communities actually riding the commuter rails and many more stay on the road. So I'll simply amplify that concern and the need to have regional equity. Thank you.
TIBBITS-NUTT - Thank you.
MICHLEWITZ - Senator Creighton.
SEN CRIGHTON - Thank you, Mr. Chairman. This is kind of building off the previous question. First, thank you to the secretary, as all of you for your hard work in this bill and your testimony here today. So I I really appreciate this administration's when it comes to implementing the low income fare program. It's been a long time coming, and we really appreciate it. I'd first like to get any updates on how that is going in terms of usage. And if there are any statistics that you could share, that would be great. And also when you look at, I guess, our most expensive mode of public transportation outside of ferries on our commuter rail system over 400 miles, obviously, the further you get outside of the Boston core, it becomes more expensive, oftentimes more unreliable just because of travel distance. I'd be curious what steps, the MBTA is taking to ensure that, our low income riders are aware of the program, how we can get them to encourage them to utilize it more frequently. And yeah. Thank you. That's that I don't know if it's to the secretary or the GM, but.
TIBBITS-NUTT - I'll take a first crack at it. As you know, we have worked on the low income fair for a really long time. And one of the biggest things that came out of it was talking about education. Not just on the website, not just on message boards, but really working with the community groups and the ones that are especially representing the majority of these populations, and also working with the schools to make sure that people do know about these programs. We can get you the exact number of people who are currently utilizing the low income fair. And then also, as many people know, the RTAs 13 of the 15 also went fare free. So we can also get you that information.
CRIGHTON - Great. Thank you. I mean, I think you've heard, the theme of regional equity brought up again and again in the questions here today. But even, representing community only 10 miles, from Boston in the city of Lynn with the commuter rail system there, but a $7 one way ticket, you know, obviously, the cost of transfers and parking, my entire life, our community many members of our community have never been able to ride, the commuter rail that runs through their backyard. So, it's obviously a big impact to have that low income fare option there, but we want to make sure that everyone is well aware of the program. But again, thank you so much for implementing it and look forward to getting those statistics.
TIBBITS-NUTT - Thank you, Senator.
MICHLEWITZ - Representative Pease.
REP PEASE - Thank you, Mr. Chairman. And thank you, panel. I appreciate it. It's been a long time since we saw4561 each other, I know. But, a couple of quick quick things. I see that there's no funding for the rural aid in the H 1 budget or in the supplemental budget. Is that just because I mean, you got the culverts and bridges, but nothing specifically under the, rural aid money for the roads. And I was wondering if that's because you're looking at what's tied in with the bigger picture or not, I guess.
TIBBITS-NUTT - It is tied in with the bigger picture. Secretary Gorzkowicz , don't know if you want to add anything to that?
GORZKOWICZ - Yeah. No. I think what you're looking at is, in prior fiscal years, we had a separate, small pot of money that was for rural aid. That has been, in fiscal year 26 proposal rolled into the Chapter 90 proposal where we're adding an additional $100 million a year with a rural aid formula. So it really sort of began. It got its start,4616 in prior fiscal years as a smaller pot of money. We've rolled it into a larger multi five year, $1.5 billion proposal of which, that is a significant, $500 million over five years investment using that rule formula. So it's evolved into a larger proposal that we've presented as part of this plan.
PEASE - Well, thank you. I appreciate that. And I hope it's just the beginning since we haven't gone up in Chapter 90 in about 15 years, but it's good I see that. And one other quick question on the circuit breaker. You said that you're going to be funded at 75%. Well, I know in my district that they've gotten proposals or they've got a letter of warning that two of the schools that they send seven kids to is going to increase, one of them by a 91% increase in the tuition, going from 65,000 per student to a hundred and 125,000. And another one where the only one child is going to go from4672 315,000 up to 371,000. So I don't know if you've taken that in fact that you'll be able to cover the 75% with those increases coming from the school, which I think they have to get approval from us, if I'm not mistaken. So I just wonder if you've thought of that.
TUTWILER - I thought the mic was by. Secretary Gorzkowicz was not looked over and it's right at me. So I guess I guess I'm taking this. I would like to connect with you and learn more about that particular challenge. But, to be clear, you know, The increase in circuit breaker, the proposed increase, a 24% increase is for FY 26. There are provisions in the current budget when districts experience increases within the year over a certain threshold that kick in support for this year. So happy to circle back with you and talk about how that's if that support applies in the case that you mentioned.
PEASE - I'd really like to just let you know at least that one. I'm sure it's affecting other schools as well. But thank you very much because I know what you do is not easy. So.
TUTWILER - Appreciate you.
MICHLEWITZ - Senator Collins.
SEN COLLINS - Thank you, Chairman Michlewitz. Thank you, Secretary Gorzkowicz , for your work and that of your team in these complex and challenging fiscal times. I think we currently are able to boast with the partnership with this committee the highest bond rating that we've had at least since my time in the legislature, if not our state's history. With that, I know, last session we moved to, I think, prudently create a mechanism to leverage the interest of the surplus account, for, I guess, you'd call it the federal match account. I'm wondering if you could shed some light on the utilization so far of that program and its benefits.
GORZKOWICZ - Sure. Thanks for the question and thank you for your support for that important piece of legislation. It has been incredibly important. To date, we have, I believe roughly a little over $300 million, of awards that have been made possible because of the match mechanism. And for those, who, don't recall or know recall or know what the senator is referring to, there was a piece of legislation that you all supported, last session that allows us to use interest from the stabilization fund to then create a program of, to match federal grants. The program also, was, it was a program we also worked on with the treasurer's office that allowed for some provisions to allow us to mitigate and to fuse debt.
And so when we talk about leveraging federal grants, it's about $300 million that we've been able to put out there, to leverage those dollars. About 200 of those are awards that have been, grants that have been awarded to us. I think about 100 million might still be pending, to date. We have not seen any interruption in those grants, which is good news. And so we're continuing to forge ahead and we continue to work on in addition, we have utilized some of those funds to pay down some old debt, $97 million of MBTA debt. That is some legacy debt that the MBTA was carrying that creates approximately $15 million of operational savings, a part of our plan for addressing the deficit, at the T.
And we're also using about a hundred million of it to bring down our GO debt. So, from a rating agency's perspective, and I'm glad you mentioned it, I think it's a really innovative tool to not only leverage interest earnings on the fund, meaning we're not touching the corpus of it. We're bringing in more dollars and investment into the state while at the same time reducing our overall debt obligations in a number of areas, which, you know, is important to4900 the rating agencies. They look closely at how4902 we manage our long term liabilities, and so this is4904 certainly one that you've been able to help us with.4906 So this tool's been incredibly effective. So thank you for asking about it.
COLLINS - Thank you. Secretary Tibbits-Nutt, thank you for your testimony and your work. Given the uncertainty around federal transportation dollars, do you think that we should be looking at expanding our use of the tax increment financing options? I think about projects in my district like Morrissey Boulevard, JFK Station, Cajun Circle that served the region. There's some major plans in the area for development and will dramatically increase the tax base. But they do require major investments in transportation. And, right now, in the state, we have currently caps for municipalities to be able to access those through mass development and other programs like mass works. So my question is, do you think that we should look at increasing the cap of those programs.
Like tax increment financing and mass works or at least, you know, harnessing development, look at allowing municipalities to increase the cap on the municipality, if not the program, if other municipalities aren't tapping into that to max it out. Because I think that, you know, with what we're looking at, that uncertainty, those programs have worked in the past. I think we've seen some limitations, I know, in the city of Boston, where other developments may have been able to support, you know, situations like that, but4992 we hit a cap at this at the municipal level. So, you know, wanted to get your thoughts on that or at least get a consideration on whether we should be doing that, you know, providing legislative relief to agencies like MassDevelopment that support these types of projects?
TIBBITS-NUTT - So I will just speak to the federal funding very quickly. We have been working very closely with USDOT. We understand that a lot of programs are changing across the federal government. But for us, our funding has remained consistent. Our grants are still in place, and we are continuing to receive reimbursements. So we have no change with our federal grants at this point.
COLLINS - Great. Okay. That's great. Still with the respect to the caps, I think there's and and that could be for the secretary of A&F as well, but I think focused on the transportation area.
GORZKOWICZ -Yeah. Look. I think, you know, going forward, we are, willing to look at all the resources we have available to us. I think when we start looking at tax incremental financing, you know, caps are in place for various reasons. You talked about the rating agencies. Those things are in fact important. And I think it's on a case by case basis where you look at the overall capacity, to be able to enter into those agreements and then pay for that. And, and, so I think each circumstance is unique. But, you know, look, we're willing to look at all the tools5071 we have, available to us and, certainly would be willing to have those conversations. But I would say that, there are sort of limitations in terms of what can be generated through that, and there are implications from a rating agency's perspective. So it just has to be taken into consideration. But we're happy to lean in and do the analysis and do the work and where it makes sense, explore that option.
COLLINS - No. I understand entirely, you know, given the executive authority really, so that's not a statutory cap as well as, meaning particularly as it relates to a municipality's use of those tools. Thank you. Secretary Tutwiler, thank you. For the FY 26 budget, the Boston Public Schools recently approved a $ 1.58 billion budget. That's with a B. 189 of it will be going to transportation. Currently, it looks as if Chapter 70 would come in there on 240 million for the city of Boston. That's a significant contribution. But with a hundred and $189 million going toward transportation, wondering your thoughts on whether, you know, school districts who are spending enormous amounts of money on transportation should be taking a look at that.
The Racial Abounds Act of 1965 was desegregated. The Boston Public Schools was passed to prevent inequities in funding at the school site level and, at the district level with Chapter 70 reform, really pushed to, also, prevent inequities and really drive down inequities. Given what BPS is, should we be looking at and then obviously special ed transportation, out of district transportation, Chapter 766, approved private schools if the school can't serve school districts can't serve them within their own schools, METCO Charter Schools understand that that really can't budge. But does it make sense that what we're already seeing is, you know, some limitations coming in from the federal government on school funding? Well, we were currently transporting people, young people who aren't wearing seat belts, which is a law for people 18, but on schools school buses, they're being transported across the city without seat belts in traffi.
Sometimes for hours on both ends of the school day, usually late, you know, sometimes not at all. But spending a hundred and $189 million with the diversity of the school district now and the transparency that we have in spending and the balance of the school committee, you know, it seems that, you know, it could be a budget buster. I can't speak for any other part of the state, but old policies, outdated, don't seem to meet the needs of the time. And while we're always, you know, trying to figure out how things are impacting our climate, we're seeing these buses idling and running through towns that are, you know, emitting, you know, toxic fossil fuels through environmental justice communities on top of it. So just wanted to get your thoughts on is this a moment to take a look at reform? How are we transporting people across school districts? And in the case of Boston, a hundred and $189 million for that.
TUTWILER - Yeah. Thank you for the question, first of all. I want to be careful not to get into the specific transportation challenges of one district, because I'm not sort of deeply knowledgeable around all the aspects related to it. I will say, the tie that binds no matter what superintendent I speak to is around the, the challenges around the the increased cost of transportation, which is why, we we've taken some steps in this, budget proposal, both with the circuit breaker and also, with, regional transportation to provide relief to some districts. And so I think my response to your question is to acknowledge the pain point around transportation, but then also to point out that there are features in this budget that are designed to provide districts some relief.
COLLINS - Thank you. And, again, it's 78% of the Chapter 90 funds we're talking about with respect to5322 the spending on transportation and 12% of the overall budget. I don't know if that's standard, but it seems to be excessive.
TUTWILER - Appreciate it.
COLLINS - Thank you.
MICHLEWITZ - Representative Marsy.
REP MARSI - Thank you, mister chairman. Hi, everybody. Good to see you again. It's been five minutes at least. So one of the things I brought up in our first meeting, in this auditorium to kick off the budget season was, the use of one time sources of revenue, you know, for planning purposes. And, just, you know, there's a really good chance that going forward over the In the next couple of years, the pool available for funds like this might decrease. And, you know, not to belabor the point, but 12 years on a, on a municipal board knowing that, you know, putting money like that into operational things, you know, can create holes later on.
So I'm concerned about that. So but, you know, knowing these things are very important. We have the money. We're going to invest in them. How do we not rely on this going forward for those operational things and use it for, you know, improvements in one time things like small town bridges. I'll just you know, one of the things I wanted to make sure that we, you know, I have one of those in my house really close to my house by just saying. And, and, yep. We just don't want to fall into that trap. So how do we plan long term?
GORZKOWICZ - Well, thank you for the question, and I appreciate your your focus on certainly the use of one timers and the one time nature of some of the funds available, and being used through this FareShare sup. It's important and it's something that we've been thinking about a lot. I think when you look and break down the $1.3 billion that we're proposing here, the vast majority of that is being used, as5430 a one time resource. There are a couple of5434 things that we're proposing to use and we're thinking about it over a multi year strategy. So the funds that have been made available are available over a couple of fiscal years. So we're taking sort of a multi year strategy. So available over a couple of fiscal years.
So we're taking sort of a multi-year approach to that, with the idea that it would not be expanded this year. It is somewhat operational in nature, but trying to gather ourselves for a couple of years. The one thing5453 I would remind folks, as I mentioned in my5455 testimony, you know, we, working with the chairs of this committee, agreed to only spend a billion dollars in FY 24. So we knew and put ourselves in a position5463 where we knew we would have this resource available to us. We didn't know exactly how much, but we knew we would have something and it certainly performed better than we thought. As we start looking at fiscal year 25, our second year of Certax, we have only budgeted a billion, meaning we've only increased it by $300 million year over year.
And right now, based on revenue performance, we expect that our estimate for5483 this year is about $2.5 billion again. So we know that we'll be back here next year having a conversation with you about it. So there's5489 an opportunity for us to think about this over multiple years so far. We know that much. And then I think our consensus revenue number for FY '26, again, that we've developed working with economists and other folks, relies on another 2.5. So we haven't necessarily grown that revenue source by a lot, but we've continued to be measured in terms of5509 how much we're building into the budget, leaving what we know will be surplus funds at the end of the year. I do think that there's a point where we'll get to, you know, a point5519 where we'll we'll we'll have to decide if we've where we stop in terms of, maxing out our capacity within the operating budget, knowing that anything that's over a certain threshold will be available through mechanisms like that.
And that's a conversation we'll have with the chairs in terms of as we think about future fiscal years and what's appropriate. But to your point, you know, the vast majority of the stuff that we've programmed in, particularly around transportation and some of the one time costs are truly one time, meaning that, those expenses will not need to be reoccurring. Some of the things that we have done are multi-year. I think the one area where we do have some operational costs are, are sped and that's in recognition to some of the extraordinary challenges that we've noted, experienced this year, particularly with, with the cost and recognizing that because of transportation being a significant, transportation being a significant, contributor to that5567 cost that we wanted to get, districts to 75%. We felt5570 that that was important to do5571 in this environment. And so I think that's the one area that as we go forward, we're going to need5575 to find the operating capacity to deal with that.
But for the most part, we've tried to be measured about how we think about this knowing that we have some dry powder in a sense, again next year and perhaps the year after. So, I don't know that I'm willing to sort of make any forecasts or predictions about beyond, 2026. But, you know, certainly we've been thinking about that. And some of the other resources that we've programmed to this up also, utilize early education trust fund, which you've, set up, I think very thoughtfully and and and very wisely in prior fiscal years has been one that we use some of these one time funds to populate to allow us to deal with some extraordinary costs down the road. So we're setting ourselves up to be able to mitigate, I think, where we have some pressures down the road. So it's an important question. It's one that we've continued to think about. And for each item in that sup, we've thought about sort of what the future impact is and, and we'll continue to monitor that going forward.
MARSI - No. I appreciate that. That makes a lot of sense. Multi year strategy is important, and I'm happy that we have that. It's just so easy to get addicted to things like this, and every year is going to go by quickly, and there's always going to be something we5645 want and need. You know, there's a long, long, long list, you know. So I just5649 want everybody to5651 remember that. So I appreciate you guys.5653 Thank you.
GORZKOWICZ - Thank you for the question.
MICHLEWITZ - Senator Dooner.
SEN DOONER - Thank you, mister chair. Secretary Tutwiler we meet again. Just want to say I appreciate seeing the 75 million towards expanding tech schools. I know we had a conversation on, you know, the need to be more forward thinking for our tech schools, in order to expand, to create more opportunities for students. So I do wish it was more, but I understand you have to5685 work within the means that you have. I heard you say focusing on gateway communities, and then I read a little bit about rural. Is there any focus on regional school districts and helping them?
TUTWILER - Yes. First, I should name the proposal in this budget, that, you know, sort of supports the notable increase in circuit breaker impacts in almost every district, in the state of Massachusetts, regardless of where it is. The other thing that I would lift up as I did before is the notable increase in regional transportation reimbursement. That is not in this particular proposal, but lives in another place in our budget. The proposal brings us to a 95%, reimbursement up from 85, which will have significant, impact on the, nearly 40% of rural districts that, engage in in regional transportation and any other district that falls in that category of regional. So I would say, yes, indeed.
DOONER - Alright.
MICHLEWITZ - Thank you. My pleasure. Not seeing any other questions from members of the committee unless I'm missing anybody. Secretaries, thank you for, for being here and for testifying for your, and, for your patience and, and answering all the questions. We appreciate you being here today, and I look forward to working with you, going forward in the future. Thank you. Our next panel panelist is Jessica Tang from the American Federation of Teachers of Massachusetts. Before Jessica comes up, I just want to recognize that we also have two senators that join us. Senator Fattman, and Senator Kennedy are as well. So thank you both for being here. Alright. We're going to keep going. Jessica Tang from the American Federation of Teachers, Massachusetts. The floor is yours.
JESSICA TANG - AFT MASSACHUSETTS - HB 55 - Thank you and good afternoon. My name is Jessica Tang and I am a mom. I am a middle school teacher and currently serving as the president of the American Federation of Teachers Massachusetts. Greatly appreciate the opportunity to be here and testify today on behalf of the 25,000 AFT Massachusetts educators and staff working in our public schools, our universities, libraries, health offices, and the tens of thousands of families that they serve. AFT Massachusetts is also a proud member of the Raise Up Massachusetts Coalition with whom we've spent the past decade working on critical issues like raising the minimum wage, establishing earned sick and paid family medical leave, and passing the FareShare Amendment, the source of revenue we are here today to discuss.
And we believe that the investments in transportation and education that the FareShare Amendment has enabled has been life changing for so many and could not have come at a better time as we confront challenges that we've never seen before. So education funding in Massachusetts is tutoring at the edge of a fiscal cliff, and this was the case before the executive order was signed to dismantle the Department of Education and before the recent $106 million cut in active grants, which was rescinded last Friday. And in this context, public education, like every other system, must adapt to the current reality to serve those who rely on us. And for our schools, that means meeting the shifting needs of our students and preventing further harm. And today, we are still trying to make up for ground loss during the COVID 19 pandemic, while the number of students needing services and support, especially mental health, continues to grow.
And the cost for many school districts to ensure every child has a free and equal public education outpaces the investment and reimbursement they receive from the state. And this has been a reality for many years. And since January 20, that reality has become a nightmare. Services, protections, and investments are being stripped at an alarming pace. And while nearly every aspect of life is being impacted by this, the administration's attack on children is especially appalling. The widespread layoffs, funding cuts, and attempts to shift services to departments without the knowledge of structure in place or its structure in place to implement them is a dangerous game. And in this shell game, our children are the victims. And the greatest harm will fall upon our most vulnerable students, students with disabilities, students from low income families, English and multilingual language learners, and kids from rural communities.
Massachusetts, long heralded as a beacon for public education, has an opportunity to continue to be that beacon if we use the FareShare funds to protect our children. We stand to lose generations of students who will no longer have access to the free and public education they deserve, and that is not hyperbole. The well-being of hundreds of thousands of Massachusetts children and students are in jeopardy. We've already lost, in just the last three weeks, $12 million in federal funding to provide local healthy food to childcare programs and schools from the USDA. Federal grants for transportation as well for electric buses. And then most recently $106 million in cuts previously allocated and dispersed grants that provided tutoring and supports to address pandemic learning loss, mental health services, high quality instructional materials, building upgrades to improve air quality, professional development, and support for emergency license holders that are addressing teacher shortages.
The Northeast Regional Head Start office was just abruptly closed. We're also looking at potential funding losses from the Department of Education that provide funding for special education through IDEA, low income students through title one, career tech education, early intervention for babies and toddlers, and more. However, because of the FareShare amendment, we in Massachusetts have the ability to alleviate some of the harm and protect our most vulnerable students and continue to make investments in our future by providing relief now. Again, even before these recent cuts were made, our school districts were struggling with the fiscal crisis and are projecting layoffs without intervention from the state. The budgeting process for the next school year is already well underway. With H.55, we're here to share how best we believe we can maximize the impacts of the surplus FareShare revenue from past years that has not been spent to prevent future cuts to our school budgets.
The extra 1.32 billion for education and transportation, which is completely separate from the 1.185 billion FSA funds to be allocated in the fiscal year 26 budget, provide an opportunity for the immediate relief that's needed. In H.55, we're glad to see proposals including 150 million more for special education circuit breaker to help defray some of the costs incurred this school year. 75 million for capital improvements to help increase capacity at our career state's career and technical schools. 25 million to support the Commonwealth Preschool Partnership Initiative, which we hope will expand more universal pre K in our public schools. With additional FareShare revenue, we can further protect public education in regions across the Commonwealth. These are our suggestions. The 106 million that would be made up from the ESSER funding ripped out from under the 20 school districts6155 this week when the administration reversed course and ended funds that were6159 already being used.
Six million to pay for the teacher preparedness programs in Boston, Holyoke, and Springfield, another group of funds that was snatched more than a year after the original disbursement. 465 million would be needed to address the upcoming school year's inflation glitch, something that schools have come to expect which greatly lessens the investments of the Student Opportunity Act. 120 million to reimburse school districts for regional transportation cost at 100% and nonregional transportation cost at 25%. Three million to support existing and new community schools throughout the state. A nationally recognized strategy to promote equity in our schools and communities by organizing the resources of the community around efforts to accelerate academic and social developments for students. We've already seen this successfully implemented in five cities across the state and believe in even greater investment as part of reimagining high schools plan.
Three million would sustain the current community community schools, but an additional investment would address many of the current challenges we are seeing in our secondary education as well. Funding to create a healthy and sustainable schools office to conduct energy audits at our schools, many of which were built before World War II and help districts create healthier, greener learning environments for their students and community, especially important considering the rollback of federal clean energy initiatives and environmental justice protections. An additional $ 48 million, to extend charter school tuition reimbursement for four years instead of three to support school districts during this current funding crisis.50 million to support the Commonwealth Preschool Partnership initiative.
200 million for reserve fund to protect the ability of our public higher education system to maintain staffing and meet the needs of students where there are significant reductions in federal funding and to fund wage adjustments that bring staff and faculty wages in line with their peers in other states and accounting for the cost of living. We also believe it would be prudent to fund a portion of the pension liability associated with retirement plus fixed bill, providing teachers hired before 07/01/2001 the opportunity to join the retirement plus program as done in House Bill 2932, Senate Bill 1884. Due to the revenue from the FareShare Amendment, we are better positioned than most states to weather the current storm and for our Commonwealth to continue to lead by taking critical steps to fill the gaps and do whatever we can to prevent further harm while continuing to enact proactive measures.
Considering the level of uncertainty we have across sectors with the cuts and threats to critical programming we're hearing from the White House, we also urge you to take action early this session to identify new sources of revenue and6318 ways the state can invest and ensure economic security for all,6322 including passing the corporate FareShare bill, also known as the GILTI bill, filed this session. While the right to public education may not be explicitly protected in the US Constitution, it is in the Massachusetts Constitution. And if the White House is going to try to dismantle public education as we know it, the state has the obligation to step up and ensure that all children of Massachusetts have the resources they need to access quality public education they are afforded under the Massachusetts Constitution. We believe in Massachusetts. We believe we can do it, and we look forward to continuing to partner with all of you to identify and implement the solutions we need to protect our students, families, and communities. Thank you.
MICHLEWITZ - Thank you for your testimony, for your time. Appreciate you, the perspective as well. I don't have any questions. I'm not counting on any questions from the members of the committee here? Senator Feeney.
FEENEY - Thank you, mister chairman. And I want to thank you, president Tang. It's good to see you again, and thank you for being here, in what is no doubt, historically, probably one of the most challenging times in education. I want to thank you and your members and and and, all the the folks across the Commonwealth in the education sector for the work that They're doing it. I'm wrestling here a little bit through, you know, the conversation that we just had with the secretaries, and hearing about all the priorities that you're identifying, certainly, that we're hearing from our communities and school committees and and, you know, those in our schools and our districts. And mindful of my new role in the committee and hearing chair Roderick's on my left shoulder literally and figuratively.
Who's always, you know, telling us how important it is to balance fiscal responsibility with the needs of our communities and understanding that we're talking about FareShare surplus money, Tay. So this is one time temporary money. And I want to make sure that we're looking at the whole picture, the big picture, the kind of long term success of education in the Commonwealth. So I'm wondering if you can kind of help me understand this because I'm worried, and it's I was with the conversation that we just had before us, that if if we try and solve, you know, all of these priorities that you had mentioned and that we're hearing about with one time temporary6458 funding, does that then create a structural deficit for us in the future with education? Would you agree with that?6466 Is there an argument against that? I just want to make sure that we are who6470 we6470 are. We are thinking long term here, right?
TANG - Yeah. Sure. So, you know, we are partnering with our school committees and our school superintendents because we understand that there are immediate needs right now. But like I said, the budgeting for our school dishes for next school year is already well underway. And so what this does. it actually buys us some time to prevent further harm because we're talking about layoffs that are happening immediately. We anticipate, you know, I think even while we're sitting here, I think I saw a headline that they're going to try to, and we anticipated this, try to tie federal funding to things that are not aligned with our values.
Like getting rid of diversity, equity, and inclusion initiatives, talking about real history in our schools, etcetera. And I think we do anticipate that that's happening. But, again, that doesn't mean that right now then in the short term, these funds can't be used to stem that harm so that we can plan forward in figuring out what are the other solutions and ways that we can prevent further harm for our students and school districts. So I think it is both and. But if we can't stem the immediate harm, then it's going to make even planning for reducing further harm in the future harder.
FEENEY - Thank you. That's helpful. I appreciate that. I'm just always cautious with one time solves for what we could see with the structural deficit in the future. I want to give you about some answers.Thank you. Appreciate your time.
TANG - mister. And like I said here too, FareShare alone is an opportunity, and we are so grateful that we're even here having this hearing to talk about how we can use the fund to prevent further harm. But we are also invested in the FareShare, I'm sorry, the raise up coalition and the GILTI corporate FareShare attacks because we know that short term, it's not going to be enough, and we've got to look at other ways in longer term to help fill the gaps.
MICHLEWITZ - Thank you, president Ting. I appreciate your testimony. Any other questions? Thank you again. I appreciate it.
TANG - Thank you. I appreciate it.
MICHLEWITZ - Next on the panel or next, to testify is Doug Haugate from the Massachusetts Taxpayers Foundation.
DOUG HOWGATE - MASSACHUSETTS TAXPAYERS FOUNDATION - HB 55 - Chair Michlewitz, Chair Rodrigues, members of the committee, my name is Doug Howgate. I'm the president of the Massachusetts Taxpayers Foundation, and want to thank you so much for the opportunity to testify here today on House Bill 55, which is Governor Healey's $1.3 billion supplemental budget proposal related to education and transportation innovation and capital trust. And we're going to cover three broad topics. So one, some general principles for use of resources in the innovation and capital trust fund, which is kind of what we've just been hearing from Senator Feeney's question and a lot of the questions we've heard, some specific recommendations related to Governor Healey's bill.
And then to take a step back and talk a little bit about, what you all are facing in terms of uncertainty, economic uncertainty, federal policy uncertainty, and how it relates to whether it's this bill, the FY 26 budget, or any number of decisions you're going to be faced with over the next however many years. But I do want to start by offering our appreciation and acknowledge the structure that was put in place for SIR tax use collection, and tracking a couple years ago. So we were at the consensus revenue hearing back in before the FY 24 budget, and we talked about the challenges that you face, how to use these resources in the operating budget in a sustainable way, how to balance against future volatility, how to balance against the fact that we don't know how much people's behaviors are going to change, and how to balance operating needs versus capital needs.
And I think the fact that we're here today talking about this bill is indicative of the fact that the structure that was put in place works and makes sense. And so I want to thank you for doing that. To get to general principles on use of the, innovation and capital surtax, The first one we'll put out there is even distribution of education and transportation resources. This is something MTF has been talking about for several years, but I want to talk about what we mean by that for a second because we know that the needs change from year to year. Education is a little more aligned on the operating budget, though certainly there are capital spending needs as well. Transportation relies more on the capital budget, though there are certainly operating costs as well. And so we think that the approach that the Healey administration put forward in her operating budget proposal and this, innovation and capital sup to get to 50:50 in combination of those two bills, this kind of holistic approach to 50:50, we think that makes sense
. We think that evenly dividing the resources is important given what the question spoke to and what the voters voted on, but doing it in an adaptable way that speaks to some of the different needs in education and transportation is a smart way to do it. The second thing I want to talk about is kind of what the funds in this, innovation and capital trust fund should be used for and some cautions about other ways to use them. I think our priority for use of these funds are things related to one time cost for infrastructure. Right? It's PAYGo Capital. It's retiring long term debt liabilities. It's innovative solutions, and we'd caution against using6775 it for operating costs. And and I'll get to some kind of math reasons for6779 that in a second, but I think at a more basic policy level, we incorporate in the budget an operating6785 threshold for, spending of the surtax, which has been used and now devotes about $1.95 billion in the FY 26 proposal for operating costs.
There are a lot of capital needs, especially when we look at our transportation sector, When we look at education, it's important that we have a vehicle that is able to kind of deploy to those capital needs as well. But it's also important that we have an opportunity to spend resources on innovative uses. One thing that I know just from my time working on the budget that we don't do a great job of in the annual6816 budget is long term thinking of challenges We know that they are before us. We've heard about a bunch of those today. And I do think on the education and transportation side, the ability to set aside some resources to tackle some long term problems and long term challenges we have in education and transportation is a really important aspect of this trust fund and one we hope to see, in the bill that comes out of the house and the senate in the weeks ahead, and we have some specific recommendations on that.
I think the third general principle, which gets back to the importance of avoiding operating spending in this bill before you, is we know that the resources that are going to go into this trust fund are going to be reduced over the next couple years. Irrespective of volatility, irrespective of what happens to the Commonwealth's economy, the $1.3 billion in Governor Healey's proposal is basically the result of $2.45 billion collected in FY 24 and a billion dollar operating budget threshold we spent in that budget. The next year, the operating budget threshold went up to 1.3 billion. This year, it's going to go up to 1.95 billion. And we expect surtax collections to probably stay in that 2.4, 2.5, 2.6 range. We still don't know exactly where they're going to go, but I don't think we expect them to double as we've doubled the operating spending threshold. So we know just because we've gotten a better sense of those collection trends over the time that the amount of resources in this trust fund are going to probably stabilize in the $400 to $ 500 million range.
And so it's vital that as you make spending decisions in the upcoming weeks, you do it based on the fact that next year, it's probably not going to be 1.32 billion. And that's not a statement on this on the tax or if it's going up or down. It's just how that intersection of the operating budget and the total funds collected goes. So those are kind of the general recommendations. To be a little more specific, regarding the Governor's proposal, we strongly support the transportation finance plan, Governor Healey put forward as part of the transportation finance task force. And I want to talk about what we mean by that. Deploying significant new resources to transportation in a way that marries capital funds, operating funds in the budget and in the surtax and provides one, predictability. We'll talk about the MBTA in this in a second, but predictability in terms of funding, but also I think demonstrates to taxpayers that we have a thoughtful plan for using surtax resources on transportation.
There's going to be a lot of conversations in the coming years about the transportation system we want, what it costs. And the first thing we need to make sure we do is demonstrate that resources that are available to us are being used effectively on transportation. The second specific recommendation, which kind of follows from that, and it kind of builds on some of the discussion we've heard here today is we do think that it's critically important, and this is Something MBTA wrote about last year, that the house senate administration moved forward with a plan to address MBTA operating deficits for a three year period. Now why is that? It's because we have that? It's because we've seen some major improvements of the MBTA in terms of workforce, in terms of reliability, and I think most importantly, in terms of the confidence that riders, policymakers, and the public feel in the tea. And that kind of progress is critical. It's critical to the economy of the Commonwealth.7000
It's critical to a unique asset that Massachusetts has that a7004 lot of other urban areas don't have, and we7006 need to make sure that we don't take a step backwards there. That doesn't mean there's not an opportunity and it's not critically important to address the issues of regional equity that were raised earlier, and I'm happy to discuss that. But I don't think that that should come at the expense of, I think, a very important and practical step to stabilize the T for a few7025 years to build on what we've seen. The third specific recommendation relates to this idea of innovation in the innovation and capital sup. Using some of these resources to tackle some really big challenges that we face that we maybe don't have any great ideas for right now. And the one we would identify for this year is special education transportation. And we recommend setting aside, we would say, $15 million, happy to work with staff on kind of a build up for what the resources would be required to do two things.
Right? one, we've seen some innovative approaches at the local level to do some things to try to get their arms around special education transportation costs. Let's see if those are expandable and replicable in other communities. And at the same time, let's work with some researchers in academia and education policy to figure out what's the way to get our arms around these costs and effective deployment of these services going forward. And so that's something that we think would be a really important element of the bill that you folks7080 are going to act on in the relatively near term. So the last thing I want to talk about, relates to this bill, relates to the operating budget, but I think is a broader topic, which is how do we react and respond to ongoing economic and federal policy uncertainty? We've seen so much this week. We're going to see a lot next week. Right? So much has happened.
We don't know what the impacts are going to be, and we don't know what's going to happen. And so how does7104 the state respond to that when we know that the resources available to us, whether it's financial resources, time, process, they're all limited. Right? It's critically important that we create, I think, an approach across the administration, house, and senate that allows us to collect information, assess options, and coordinate a response. And I think it's critically important that as that exercise, obviously takes into account how we listen to our communities, constituents, fellow members, but it also needs to reside pretty closely to budget decisions. Right? At the end of the day, so much of what is going to be coming down the pike related to whatever the feds do or don't do, whatever happens to the economy, is going to be intertwined7142 with the budget. It's going to be intertwined with the financial decisions.
That chair Michlewitz, chair Rodrigues, members of the committee, and Secretary Gorzkowicz, are going to be tasked with. And so finding a way we're not suggesting something formal or something statutory, but to create a kind of state federal response team centered around administration and finance, and the ways and means committees to help us understand what is happening and what those options are. Because one of the things that we talk about is what would be a mistake is to act in a way now that kind of reduces our options in the future when the world we're faced with, especially once we see what the federal fiscal year '26 budget looks like, is going to inform so many of the things that are in the state budget, from certainly Medicaid to other areas as well.
That's not to say we shouldn't be proactive in the meantime.But we need a strategy that understands that short game, long game, and the fact that outside of whatever happens in terms of actual federal policy, what happens to the economy could have an even far greater impact on state resources, and we can't act like those are two different things. And so that's why we think it's critically important to think about how we create some kind of an information sharing coordination structure that again is centered, I think, pretty close to how we make financial decisions. So thank you for the opportunity to testify. Happy to take any questions.
MICHLEWITZ - Thank you, Doug. Appreciate your testimony as always and, your, continued partnership with us, and and giving us information, giving us perspective, and, working with working with us to kind of find solutions to some of our challenges. Thank you. Wanted to just ask about FareShare in general, and we've had these conversations before, but I'm going to continue to bring them up. Yeah. This is always a continuous moving target. And as every year goes by or as now we, you know, start to go through these processes, processes, we know more and more information. We have more, you know, understanding of it. We were all pretty off on this number that we got to at 2.4. If I mean, we budgeted it conservatively at a billion intentionally, knowing it was the first thing. The DOER's first number was 1.6. I don't recall what what you guys said exactly, but I think.
HOWGATE - it was 2.456, not 2.46.
MICHLEWITZ - You had it exactly on the number? Yeah. I didn't think so.
HOWGATE - We were smart enough to not provide an estimate.
MICHLEWITZ - Okay. Yeah. Yeah. Well, you can do that. But, all can decide, we're trying, as we're trying to maneuver through this thing, I think we're trying to figure out certainty, you know, expectations, as we move towards, having full implementation of this discussion. And, you know, as a couple more budgets go through, we will have a full amount of, you know, FareShare money that we'll just be using, hopefully just through the regular budget process and not having a surplus conversation of this magnitude. We will certainly have a surplus to some degree next year, maybe by the, you know, the following year that that number is going to start getting smaller.
But I think the question is, one, do you think that 2.4 is sustainable, or in that range is sustainable? And then two, is, you know, how soon and I've asked this question before, but how soon do we start getting to that point where we can start, you know, relying on certain things related to FareShare, as opposed to, you know, going low and then trying to play this game of, like, combining FareShare with that, you know, with the next fiscal budget, which is what the administration's talking about. You know, we're going to certainly have those conversations over the next couple weeks here. And I think we're just trying to figure out when it becomes more certain, from your perspective in relation to that.
HOWGATE - Yeah. Great question. And I'd answer it in a few different ways. So when you look at estimating where tax collections are going to go, there's kind of two things you can look at as your prior. One is total tax collections. Right? Which and if you look at those, the biggest the most volatile time in total tax collections was in the last 30 years or so was the great recession when we had declined about 15%, and the biggest increase we've had in total tax collections in a given year was about 20% during during the pandemic. Right? So that's the order of magnitude there. But the other thing you can look at is capital gains taxes. Right? And capital gains tax have fallen by well more than 50% in a year and have more than doubled in another year. And so I think the best guess is surtax revenues are probably going to look more like capital gains taxes than they are like underlying taxes.
And so when we think about what that standard error is in terms of the average may be 2.6, but your average deviation may be 700 million either way. Obviously, on top of that is what happens with behavioral impacts and things like that, but those will play out over time. Right? So if I had to give my kind of best guess for this, right, and I do think that this year's budget did this appropriately is let's stick around 2.5 billion for right now. Right? We're going to see if it goes up, if it goes down, but build in a process that understands that in any given year, that standard deviation is going to be a lot wider probably than it is in general budget revenues.Which could mean in FY 25, you know, one of the challenges that we talked about in January is we don't have a great kind of under the hood look at the composition of revenues in '25 to date. Certax could outperform last year significantly in FY 25.
Right? That doesn't necessarily mean, given what we've got going on with FY 26, that we're going to see the same thing. And so I I think that the smartest way to go for the next few years is this idea of you're probably going to have about $2.4 billion, $2.6 billion to work with on a kind of straight line basis. And then after a few years, you may want to adjust that up a little bit if we've seen that we continue to see big growth, or maybe you start to see some behavioral impacts that require you to downgrade that. But I think the challenge for next year's budget is, like, the average may be that, but what's going to happen from year to year? And that is why I think the structure that you folks put in place makes a lot of sense. And sticking probably around that ,1.95 billion threshold for ongoing operating spending. You probably don't want to go too much north of that in the next year or two.
MICHLEWITZ - Well, I appreciate that. I'll follow-up and say that, you know, I think to your point, pinpointing this is going to be very difficult. Trying to create us to have flexibility, and allowing us to have that flexibility through whatever process we decide to take this in is going to be important, because as we've seen, no one got very few got it right the first time. I'm you know, we'll see what we were, how far off we are the second time, and hopefully, we'll get a little closer on the third time. And so I appreciate that that flexibility conversation is a component of how we can do these budgets in relation to that. So thank you.Senator Collins.
COLLIS - Thank you, Chair Michlewitz. Just to clarify, what are you recommending the threshold be for the utilization of this fund for the backing of bonds versus operational cash expenditures?
HOWGATE - So the supplemental budget that Governor Healey filed includes about $1,3 billion, which is basically the balance of this fund. And what we're saying is we believe that this fund should really primarily be used for those capital, needs innovative one time things.
COLLINS - So what percentage of the because you talked about the potential fluctuation going forward. If you were to give a percentage of what you think we should leave for the backing of capital expenditures versus utilization for cash incentives?
HOWGATE - So the way the structure works right now is we would estimate it about probably between $400 and $500 million a year. Is it what's going to be in there? I think what we will probably need to recalibrate is what that balance should be. I think as Chair Michlewitz was just pointing out, when we put together that structure, I don't think people knew if it was going to be two billion, 2.4 billion or 2.8 billion. And so once we start to get a better sense of where those numbers land, I think there is another conversation to have about what is the right distribution of ongoing operating versus that capital and innovation. I think this is going to be an interesting year because we have a significant balance in this fund, right.
Which is going to be reduced. I think looking at it next year and the year forward to see if that if we are right, that it ends up stabilizing at 400 or 500 or we're wrong, and then seeing how that fits into the needs in the capital budget versus the operating budget. I will say just as part of that, one of the things Governor Healey proposes in her budget is securitizing $765 million in operating surtax dollars through the Commonwealth Transportation Funds. That's something we've supported, because that allows our kind of capital dollars to go farther. Right? So I think part of what is necessary in this versus the operating budget is also determined by some of the choices that are made in some of those other proposals that are before you folks
COLLINS - Thank you.
MICHLEWITZ - Representative Ferrante.
REP FERRANTE - How are you doing today? I just want to go outside of FareShare for a minute because you tend to provide so much insightful advice on so many different levels.
HOWGATE - Thank you.
FERRANTE - I don't think we noticed that yesterday, the federal government announced enormous tariffs, which I think you and I would both agree are a tax on the consumers, anywhere from 10 to 50% depending on the goods that we're7704 looking at. In addition to that, the president has said that he wants to give a massive tax cut and at the same time bring down government spending. And as we look at those three factors, I don't think, you know, we can all talk about what happened during the Great Depression. I think separate and aside, this is really different, because he has a number of volatile pieces moving simultaneously at the same time, not because of outside forces, but forces that are all within his control. In terms of instability, what would you predict right now? And I know that's hard because of the amount of volatility and instability, but I'm just curious as to what your outlook is and I know it could change tomorrow with whatever he decides. But what are you thinking right now in terms of where we're at?
HOWGATE - Yeah. Great question. And we're going to publish something next week that gets to that a little bit of just kind of how to think about some of these things. We don't have any answers just like anyone else doesn't have any answers. But there's four things in what you talked about. Right? We will know what the feds do with their budget in probably July. Right? And we will probably know what happens in terms of Tax Cuts and Jobs Act extension. And so those will be things that we will know what will happen. What the total impacts on Massachusetts will be a little unclear. I think the things that are more challenging because they're more uncertain just in terms of how to plan for them are what happens to the global economy.
Right? And also what happens in terms of take, for example, federal regulatory action or federal administrative action through things like the centers for Medicaid and Medicare. Right? We can know what congress wants to do with Medicaid, but it's hard to know what the, actually, administration is going to do in terms of compliance requirements and things like that. And so you can only kind of plan for the information you have. And so that's why I do think as you think about the the actions that the house senate administration are taking, keying in on the congressional budget process and the tax cuts extension along with what's going on in the stock market and what's going on with the economy, those are the three things we can best track day to day to day because I think we're going to have to hedge quite a bit for federal policy uncertainty that's going to continue to be, I'm sure, quite a roller coaster ride, you know for the next three plus years.
MICHLEWITZ - Senator Comerford?
COMERFORD - Thank you so much, Mr. Chair. Doug, thank you. And thank you for your I'll start by thanking you for your recommendation, right, that the administration brings in the House and the Senate to problem solve in real time the impact of federal cuts and policy shifts. I think that's right. Let's talk about regional equity. I think this is not surprising to you. So I heard you make the case for the MBTA funding that's in the proposals, both, I think, H. 1 and H. 55. And I know you were here when I pointed out this 79% versus 8% discrepancy. Right? That's real. That's when we look at both of these proposals, which Secretary Gorzkowicz suggested that we did, as, you know, sister proposals, that's the discrepancy. So how do you think in your big brain we can achieve better regional equity? And is it securitizing RTA funding like we're proposing to do with the MBTA? Can we not do competitive grants for goodness sake, because the small guys always get left out? Like, what do we do, Doug?
HOWGATE - So let me answer that in two ways as well. I think that in terms of the focus we heard from several, of the members of committees in, in regional equity, I think there are ways to improve that. What I worry about is we end up with a neither nor approach where we don't do what's sufficient for the MBTA and we don't do what's sufficient for regional equity. Right? And so I would just warn the committees as you think about wherever you land on these things, is there a way to accomplish significant resources for transportation, addressing MBTA budget gaps, and making meaningful improvement in terms of regional equity, micro transit7953 RTAs? I think the answer is yes. Right?7955 I will say part of this is context, and this is neither good, bad, nor indifferent, but it is true.
RTA support in the budget has more than doubled in the last three years. Now that's not to say that it was enough before, it's enough now, but part of this is kind of building on what came before. Right? And and and the unfortunate reality, especially in an area like micro transit, which historically has gotten nothing from the state budget, you gotta build up from nothing. Right? And I do when you look at some of the, I think, really meaningful impacts that microtransit grants could have around the Commonwealth, they seem like an area where you get a lot of bang for your buck in terms of connected communities that don't have reliable transportation in a way that comes at a relatively low cost big picture wise. I think when we look at RTA support and look at the composition of the grants, predictability versus competitive grants.
Obviously, you want to make sure, and I think this is an issue that's been attention in the past, how do we make sure that different RTAs are run efficiently and things like that. But as I said before, one of the things we're trying to do for the MBTA is provide them with some budget predictability. That argument certainly applies to any transportation agency around the commonwealth. Right? And so I think that's a part of the conversation as well. I think the other part of it is so much of what was in, especially the securitization of the 765 is really about what we do on the capital side. Right? It's Chapter 90, but it's other things as well. And a lot of that's kind of still a little blank canvas in terms of what would happen there, and I think that's another opportunity to have that conversation. So those would be just a few things off the top of my head.
COMERFORD - That's really helpful. I actually think that's very helpful in terms of capital, because we'll need these little zippy microbuses, right, for these RTAs. I'll just say, you know, our the RTA would say to you, and they're not monoliths, that they are they live within their budgets all the time, whereas the MBTA, no shade on the current general, manager, but the MBTA continues to come saying, oh, sorry. You know what? We just couldn't make that meeting, and we continue to give them money. So I, you know, I have a little concern about that. Thank you, Doug.
HOWGATE - And I would just say I absolutely hear that. The other thing that I think is important in context is that the MBTA is, if not the largest state, the MBTA operates hundreds, if not thousands of miles of heavy rail, and it does a lot of stuff. Right? And so I do think there is it hap you know, it is important for us to kind of take into account as well that the size and the value that that Boston and Massachusetts accrue from a heavy rail system that very few other cities in the country. Right? And so that's the system we're in, and it is going to be an expensive system to maintain, but that doesn't mean that we can't have a similar level of prioritization in other areas. I really believe there's a way to kind of do both of those things.
MICHLEWITZ - Chair Rorodrigues
RODRIGUES - Thank you, Mr. Chairman. Doug, great to see you. Thank you very much for your testimony. I appreciate your comments on the potential volatility of FareShare revenue. And I know we're here to talk about today the FY 25 supplemental with the surplus that it's a known number. Right? It's a fixed number. But we are also concurrently working on the FY 26 operating budget, which includes a FareShare consensus revenue spend in the budget of 1.95. Things are happening quickly. We saw the tariff announcement. I think the Dow Jones is down 1,300 points already today. Who knows where it's going to go, if it's going to rebound. All indications are, for what I'm hearing, it's only going to get worse before it gets better. Should we be reconsidering what we had proposed for FY 26 given the actions of the president?
HOWGATE - It's a great question. And my answer would be a provisional no. And I'll answer it that way for this reason. We still are at about the halftime of the budget process. Right? We're going to have the house budget in a couple weeks. We're going to have the senate budget, and then we will have, you know, the conference committee process that will take us through certainly June. Right? And we will have more information there as we go. And so the question is, as you think about making adjustments to revenue assumptions, making spending adjustments, when are those adjustments most thoughtfully made? And the answer obviously is before the process starts. That's the best time to make them. Right? And when consensus revenue happens, that's the best time to make them.
That's not the world we're in. And so the question is if you were to make different assumptions now, what would that be based on, and would they be better than the assumptions you'll make in May or June once you see some of those numbers? And my gut is the answer8247 to that is probably no. Now setting correct expectations for8251 folks that this stuff may not be written in pen right now, and we8255 may need to make some serious adjustments just as,8257 both chairs made in 2020 when I think you did take the appropriate action in terms of adjusting the budget, adjusting the timeline in light of circumstances. We're not in that world right now, but folks need to know that when stuff changes, we have to adapt as well. I think that needs to be out there, but I don't know that you8275 would have better information to make informed adjustments right now compared to a little later in the process.
MICHLEWITZ - Senator Feeney.
FEENEY - Thank you, Mr. Charman, and thank you, Doug, for your work as always and for being here today. Just to follow-up on the question I asked in a previous testifier too. I have a big fear, which I tried to articulate, that we find ourselves in a serious structural, you know, deficit going forward in the years ahead, especially with what's going on federally and kind of volatility there. Understanding that, you know, we are blessed with the opportunity that we actually have today, to use this funding for various purposes. Thinking about my own district and talking to my colleagues in kind of minimum aid communities and suburban and exurban districts, there are many communities.
I have two in my district right now that are facing overrides, specifically with the pressures of education. Costs are going up across the Commonwealth. That is, to me, the absolute number one priority to make sure we're getting right. With that kind of understanding and and and knowing that that's going to continue to happen, that that trend is going to continue to happen, we just heard8348 about, you know, the need for additional revenue. And I know MTF is reluctant to, you know, to go that way. And I think you articulated in8354 your remarks about how important it is to make sure that we're prioritizing with these one time funds, you know, innovative ideas, right, and kind of capital items that are important as well. But, you know, I've always been a supporter of the guilty tax, and I know it's something that, you know, we've had many debates about here over the years.
Should we really start taking a candid look at, you know, kind of places where Massachusetts is an outlier and things like that, where additional revenue could be realized so that we don't get ourselves into a situation where it's not too, you know, communities in my district that are facing an override to be able to to8392 do the most basic fundamental. They're not facing8394 overrides because they need to fix the roads. Facing overrides because we need to educate our8398 children. Should we be really looking seriously at that, or is there a way that we can I don't know? Is there a kind of way to balance that going forward so that we're not sitting here trying to put band aids on it through, you know, surplus budgets and and onetime, funding?
HOWGATE - Great question. And where I'll start is with rates of growth as opposed to8422 revenue basis, spending basis. Right? And pick whatever revenue structure you want. Pick whatever tax rates you want. They're going to grow, if you're lucky, at 3% to 4% a8432 year. And one of8433 the challenges we're facing now in mass health, challenges we're facing in a number of areas of spending is that the spending is growing by more than 3% or 4% a year. And to me, that's a structural issue that is going to require a lot of hard conversations for all of us about how to get our arms around8447 those cost growth factors. And so if you generate more revenue, can you spend more revenue? And the answer to that question is yes.
Are there consequences for different proposals to generate more revenue? Absolutely. There are as well. And have we already passed a major tax increase in Massachusetts over the last few years, and it has allowed you to have this supplemental budget before you today, but there are also a lot of fiscal pressures. And to me, so what's the bottom line? kind of what's the big takeaway for that? And to me, it is the fact that the revenue base we're going to have is a base that's going to have constrained rates of growth wherever we decide to pick8483 that. Right? And what we're seeing on some of those spending cost lines for a totally understandable reason, many of which related to things that we saw happen during8491 the pandemic.
Is cost growth of 7%, 8%, 9%. And if we don't get those things equalized over time, it it it's not going to work no matter what you pick as your revenue base. And one of the things we've talked about we talked about special education transportation as an example of that related to this. Another thing we've talked to folks about in the context of the FY 26 budget is the mass health program. Right? When you look at where the new spending in Governor Healey 's budget grows compared to the budget she signed last year, 80% of it is in health and human services. And that's not because we're expanding our mass health program or doing major new things. As I'm sure all of you are aware, that comes with some challenging decisions or proposals that have already been made.
But what it speaks to is the fact that we've got a real mismatch there between that growth in some areas of the budget and our ongoing revenues. And there's not going to be any easy solutions for how to do that. But 1 thing I'd love to see in this year's budget, especially given the uncertainty of whatever the feds are going to do, especially related to Medicaid, is to start8548 to task some folks with saying, how8550 do we start to manage Medicaid costs long term? What does that mean for our larger health care system? Right? We don't want to just push it down in one place to have it explode in another area of our health care system. And are there some things we can do to help us get our arms around that
Depending on what happens in the next six to nine months with federal, you know, with federal state federal partnership, with the larger economy. Who knows what kind of policy questions you folks are going to have to answer in terms of whether it's spending, balancing the budget, resources? I don't think I or any of you8579 could kind of say what's going to be there. What I will say though is wherever those questions lie, ultimately, we're going to need to be in a situation where we're aligning those long term spending and revenue pressures, and I think that's a big part of what we need to start getting our arms around as well.
MICHLEWITZ - Representative Elliott.
REP ELLIOTT - Thank you, Mr. Chairman. Just very briefly. Thank you, Mr. Howgate. I just want to just revisit the special education circuit breaker a little bit. And in particular, the transportation cost, has the state engaged in, as you correctly outlined, strategies to address these increasing costs. As we already know, on the municipal level, they know, and they feel it. And luckily, these revenues are available. But moving forward into FY 26, as we know, it takes some time to either implement any regulations or strategies. And I understand you it's important to engage communities and universities and academia to develop these. But is there something in the process that is being discussed to reign in these unsustainable costs as you correctly outlined in the memo?
HOWGATE - Sure. So I know the Department of Elementary and Secondary Education works with districts all the time on issues related to transportation, issues related to transportation, issues related to special education. So I don't doubt that there are things that they're doing with individual districts. I think the broader point we're trying to make is as you folks put together your budget, as you folks plan for next year, some kind of combined effort to understand that process, understand what those options are, I think would really, generate some benefits. And I don't believe anything like that is currently ongoing.
ELLIOTT - Thank you, Mr. Chair.
MICHLEWITZ - Any other questions or comments from members of the committee? Doug, thank you for your testimony, your time in, answering our questions. I appreciate you being here today. Thank you. Next on the agenda is Kate Dineen from A Better City.
KATE DINEEN - A Better City - HB 55 - Hi, everybody. Chairman Michlewitz, Chairman Rodrigues, members of the committee. My name is Kate Dineen. I'm president and CEO of an organization called A Better City based here in Boston. And it is a real pleasure to be here today to testify in support of House Bill 55, which as we now know will provide vital funding to stabilize our transportation system in addition to supporting important education investments as well. And before I8732 begin, and share the A Better City perspective, I'd like to acknowledge the complexity of building a budget in this climate8738 and to thank you for everything you're8740 doing to lead our Commonwealth through this very uncertain time.
I'd also like to recognize my colleagues in education, for all of their tireless efforts to improve our system in our state. I'm a mom of a five year old pre K student and a one year old daycare baby, and I'm so grateful for all of their efforts. And I'd also like to8761 share that I'm a Western Mass native, and I still have a 413 area code, and I deeply appreciate all the very thoughtful questions regarding geographic equity. And today, I represent an organization called A Better City that has been around since 1989, and we've represented the Greater Boston business community on a wide range of transportation matters.
Because from our perspective, our transportation infrastructure is in many ways the foundation upon which our regional economy is built. A Better City now focuses on8793 transportation, climate and land use issues, which are obviously very intertwined, and we represent a multi sector group of nearly 130 business leaders and institutions that are united around the common vision of creating a more equitable city and region for all. From our perspective, a high quality public transit system8816 is a prerequisite to achieving8818 any of those goals, and so that is why we must act urgently to stabilize the MBTA's operating budget now. As such, a Better City supports Governor Healey 's proposed surplus surtax supplemental budget because it would do three things.
One, it would advance the initial recommendations of the Governor's transportation funding task force. Two, it would deliver on the promise of that 50:50 split of FareShare revenue, and three, it would stabilize the MBTA's operating budget in the near term. A Better City was honored to serve on the Governor's transportation funding task force, and as you know, the core recommendations of that task force report really prioritize the use of FareShare revenue to stabilize our transportation system statewide. The task force does make additional recommendations to enhance and transform our statewide system over time, such as continuing to aggressively pursue federal funds, which is obviously more challenging now, rationalizing existing transportation fees, and assessing the feasibility of new pricing strategies as well.
So we will undoubtedly all have work to do together in coming sessions. In your broader budget negotiations, we encourage you to consider the approach to leveraging FareShare funding that's reflected in the Governor's House one budget. But in the immediate, what we're8901 here to discuss today, House Bill 55 is a critical step in implementing that broader plan. The task force ultimately did recommend an even split of FareShare revenue between transportation and education. Over the past two years, transportation has received roughly 40% of FareShare funding despite the ballot question's promise of an equitable distribution, and House Bill 55 would move toward that more equitable split over time.
When we step back and we consider our statewide transportation needs, the most immediate and challenging is at the MBTA, where the financial gap begins in FY 26, which as8941 we know is less than three months away now. Our region, and I would argue our entire Commonwealth, cannot survive, let alone thrive without a safe, reliable, and accessible MBTA. The MBTA service area of 164 municipalities represents over 70% of the state's population, 74%8960 of the jobs, and 84% of the GDP, and we know that every dollar invested in public transit generates at least $5 in economic returns, and that same ratio is proven true, when you look at the MBTA. Under General Manager Eng's leadership and with the support of the legislature, the T has made tremendous progress toward addressing decades of underinvestment and getting the system back on track and really rebuilding trust with8989 the public.
From hiring sorely needed bus operators at8993 a record pace to removing slow zones across the subway system to most recently realizing the vision8999 of South Coast Rail, the current9001 MBTA leadership is delivering for our riders and delivering for our economy. And without additional funding provided by this proposal, the MBTA would undoubtedly be forced to contemplate service cuts, layoffs, and dire funding reallocation decisions. Plainly, from a Better City’s perspective, the MBTA would risk returning to a state of crisis that would potentially destabilize our economy and threaten all of our shared goals. In closing, transportation is, in many ways, the key to unlocking a more affordable, equitable, and competitive Commonwealth, and the key to recruiting and retaining top talent in this unstable economy.
Our major employers, including our higher education and health care institutions, our life sciences companies, our law firms, all of which are now under federal attack, rely on the MBTA to move the workers that move our economy. With unprecedented uncertainty at the federal level, one thing is certain, Massachusetts can and must take this near term action to take control of our own transportation future. House Bill 55 is a critical step at a critical moment, and a Better City respectfully urges the committee to support this proposal. Thank you for your leadership, for your partnership, and for your commitment to the Commonwealth.
MICHLEWITZ - Okay. Thank you for your testimony,9085 your patience, and your continued efforts and work with us, in the legislature here as we move forward on this discussion and further other transportation issues as well. So thank you for being here. Any other senator Collins.
COLLINS - Thank you, Chair Michlewitz. And thank you to ABC for your testimony and work.
TANG - Thank you, senator.
COLLINS - History has been an important part in planning and transportation, particularly in my district. As we're talking about precious transportation dollars and the enormous challenges that we're trying to face and meet head on, I also think about competitiveness. We just talked about tariffs and the potential effects there. The competitors of the Port Of Boston and that being at risk. Do you think that we should be including legislative frameworks, when cities and towns or or the state wants to, you know, basically restructure our transportation network through, you know, bike lane infrastructure or bus lane infrastructure to9161 get stakeholder buy-in?
Because it doesn't seem to be that that's the case across the board. We look9167 at the disaster that was on the street that luckily got pulled back, and ABC had a big role in the planning for the Crossroads Initiative. That was basically from the convention center to South Station Yep. With the truck basically from the convention center to South Station Yep. With the truck routes on. I mean, we were literally, you know, the Port Of New England, you know, UPS, FedEx, DHL, Connolly Terminal, Marine Industrial Park Bus lane right through it for two years. And, you know, where the bike lane infrastructure that was planned thoroughly with ABC at the table, for the crossroadness of works just fine from, the convention Center to South Station.
You know, we didn't have the same stakeholder process at all and spent a million upfront, probably a million to slowly remove that, all the while stakeholders like the Massport Authority, the Convention Authority, hotels, and everybody was, you know, raising alarm and other stakeholder groups. Is that something that we should be putting in legislation to ensure that when we're spending significant tax dollars or providing it to municipalities to make improvements that we at least have that kind of buy-in? Because it seems to be not a, you9232 know, common threat that it happens sometimes, doesn't happen, and9236 then we see situations like this when you bring up competitiveness in this particular case with respect to the Port Of Boston.
DINEEN - Yeah. Well, thank you for your question, senator. I think it's a timely one. You know, from a better cities perspective, as you know, we feel strongly that as a city and as a region, we do need multimodal transportation options to thrive, and that includes driving,9257 transit, active transportation, and we will need to build out that active transportation infrastructure and also transit infrastructure to support those multimodal uses. So we need to see the continued development of bus lanes and bike lanes, and to your point, it has to be thoughtful, and it has to ensure that all stakeholders are at the table. And I think, especially9277 from our perspective, to consider the needs of, potentially impacted businesses, and economic drivers, like many of whom you referenced and that you represent.
Regarding your question about requiring that in statute, I think there are a lot of different ways to get there to that same outcome. I think that is certainly one approach. I know that we at a Better City are looking forward to reviewing Mayor Wu's, 30 day review plan where she's taking a backward looking look at, I believe, all transportation infrastructure that's been installed9308 in the last three years to see what9310 changes may need to be made to infrastructure that's already in place, and also to take a forward looking view of how can the process be improved moving forward, how can we ensure that we have really robust stakeholder engagement, and9323 not just input, but, that that9327 folks are at the table early enough to9329 influence the design, right, and9331 not just to kind of approve it. So we're really looking forward to reviewing that plan, and to be a partner moving forward on this.
COLLINS - Thank you. Yeah. I just think most people's philosophy is they shouldn't, it's not that bike lanes and bus lanes shouldn't be anywhere. They just can't be everywhere.
TANG - Right. Yep. Thank you.
MICHLEWITZ - Any other questions or comments from members of the committee? Okay. Thank you so much for your testimony. I appreciate it. Next up from the Massachusetts Municipal Association, Adam Chapdelaine.
ADAM CHAPDELAINE - MASSACHUSETTS MUNICIPAL ASSOCIATION - HB 55 - Good afternoon, Chair Michlewits, Chair Rodrigues and distinguished members of the committee. I want to start by thanking you for inviting the MMA to be here today and for holding this important hearing. For the record, my name is Adam Chapdelaine, and I'm proud to serve as the executive director and CEO of the Massachusetts Municipal Association, which serves local government in all corners of the Commonwealth representing all 351 cities and towns. Since the enactment of the voter approved surtax, we've appreciated your strong support with targeted and thoughtful investments that have benefited local government in Massachusetts.
Through funding for public schools, school building projects, universal free school meals, local road and bridge funding, and much more, You've all been excellent stewards of these new critical resources, and municipalities are grateful for your partnership. As we highlighted last week at the joint committee state budget hearing, today, cities and towns are facing daunting fiscal challenges. They're facing a perfect9441 storm of fiscal pressures, inflation hitting all city and town departments, health care cost increases, federal funding uncertainty,9451 and as we learned earlier9453 this week, even federal funding rescissions. And now all of this must be managed within the confines of proposition two and a half, which as we know caps local revenues through property taxes.
Despite these challenges, cities and towns have been proud to partner with speaker Mariano, senate president Spilka, and the leadership of this entire committee to target strategic, one time investments that can make a true difference for local officials and the residents that they serve. So when we think about this opportunity9487 that you all have before you, the MMA advises a framework that supports all regions in all communities in the Commonwealth, whether a gateway city along Route Two, a small town on the South Shore, or a hill town in Western Mass, all have unique strengths and needs. Providing strategic investments through a lens of regional equity will further empower our communities9514 and bolster critical services provided by our cities and towns.
So to talk about transportation, first, again, we want to express our gratitude for the investments that the state has made over recent years in improving municipal roadways. That really has made important progress. Yet, with more than 30,000 miles of roads under municipal control, which accounts for nearly 90% of all roads statewide, funding dedicated to supporting our local roads and bridges is still desperately needed. Our most recent Chapter 90 survey has totaled the gap in funding to be in the hundreds of millions of dollars just to bring our roads to the state of good repair. Over time, cost drivers and inflation have further decreased the value of available funding, which has now only been made worse by9566 construction9566 inflation and economic threats from Federal Action.
And again, under a tightly capped property tax, communities simply don't have the adequate resources to make headway on bringing roads to a state of good repair. So to address this, we urge your consideration of an additional $100 million of supplemental funding for Chapter 90 eligible projects. I know you can all appreciate and understand this need. We all know that you hear from your own local officials on the importance of this funding. But it's also important to remember that this funding could be put to use immediately in cities and towns across the Commonwealth. Every one of them has a shovel ready project that could repair crumbling roads or advance another type of critical Chapter 90 project and improve safety on our neighborhood roadways.
Next, we'd urge consideration of $25 million to support local bridges and culverts. Culverts, it's a municipal nerd alert, are a significant part of local infrastructure, but they're often only noticed when they fail. But when that9633 happens, sizable costs are incurred, which would be a massive hit to any budget but9639 are especially impactful on our smaller and rural communities. Across the Commonwealth municipalities are in need of support to maintain and upgrade the countless culverts under municipal care to meet the necessary resiliency standards, especially as we face increased and unpredictable precipitation patterns. The funding would support upgrades of9662 municipally owned small bridges and culverts in order to protect public safety, improve climate resiliency, and restore ecosystem connectivity.
I also want to highlight the proposal included in house 55 for the Winter Resilience Assistance Program or RAP. The MMA greatly appreciates9680 the Healey Driscoll administration for including this important provision, which would distribute supplemental aid to municipalities based on road miles. This is a successful method for9690 supplemental apportionments to assist all communities again while prioritizing regional equity. For wrap, we respectfully request consideration of $50,000,000, which is an increase over the administration's proposal. Each municipality, again, has a list of shovel ready projects in need of supplemental funding, all of which can be put to use right away. The construction season is upon us. With the effects of climate change exacerbating the damage to local roads, this is an essential investment to improve access and quality of life for residents across the Commonwealth.
Through these proposed investments in local roads, bridges, and culverts, the legislature has a great opportunity to address a backlog of needs across all 351 cities9740 and towns, all while promoting regional equity with a limited infusion of surplus resources. So to9748 shift to education, I'd start by appreciating the attention on the special education9753 circuit breaker, which is9755 an essential program to reimburse districts for the cost of services and transportation to students with some of the highest needs in the Commonwealth. We support fully funding this critical account and look9766 forward to working with you all in determining the best approach in the coming months.9770 Further, school transportation accounts continue to be a high priority for municipalities.9776 Inadequate funding for these programs can create major hardships for school districts and municipal budgets.
We're grateful for your ongoing support in recent years for the needs of regional school transportation, out of district vocational, and special education transportation, as well as the transportation of homeless students under McKinney Vento. As we view this unique funding opportunity in terms of programs that are both related to education and transportation, we're respectfully requesting a special one time pothole account to address in district transportation. Regular day in district school transportation is a major area of high cost with no current financial support from9824 the state. While state law provides for state funding for regular day in district transportation, municipalities haven't seen financial support from the Commonwealth for decades as the section is subject to appropriation. But at a time when districts are facing such acute increases in school transportation.
We believe this proposed account could mitigate the impact they're having on local school budgets. And based on this, we're respectfully requesting consideration of a one time $45 million pothole account towards this effort. Research consistently demonstrates a strong9859 link between reliable and accessible school transportation and improved student attendance, particularly for economically disadvantaged students. Studies have shown that transportation access can increase attendance rates and reduce chronic absenteeism. So again, thank you for your time. We're deeply grateful for the committee's attention to all of these priority issues for local government. We look forward to partnering with you in the months ahead on all of these issues, and we appreciate your consideration of important investments supporting all 3519890 cities and towns in the Commonwealth. Thank you.
MICHLEWITZ - Adam, thank you for your patience and your testimony. Appreciate you being here and, given the perspective from the MMA. We appreciate that. Thank you. Any questions or comments from members of the committee? Representative Peace.
PEASE - Thank you, mister chairman, and and thank you for your testimony. And I guess something that came to my attention recently, and we talk a lot about regional transportation budgets. And, but also, I think within a city, they're having issues because they usually have one person to bid, one company to bid. It's not very competitive. At least in my area, we're seeing those costs go up quite a bit because of the lack of competition. So I don't know how we deal with that, but that's something else that's going to come down the road and really add to our increased cost of education. So I just want to point that out.
CHAPDELAINE - Thank you for raising that. I would say we've had some dialogues9945 with some of your colleagues in this committee about this, and we are very open to continuing a dialogue about any potential avenue to increasing the competitiveness of that market. Thank you.
MICHLEWITZ - Any other questions or comments from members of9960 the committee? Adam, thank you again for being here.
CHAPDELAINE - Thank you very much. I9964 appreciate it.
MICHLEWITZ - Your testimony. I appreciate it. Next up, Ed Lambert from the Massachusetts Business Alliance for Education.
EDWARD LAMBERT - MASSACHUSETTS BUSINESS ALLIANCE FOR EDUCATION - HB 55 - Good afternoon, Chairman Rodrigues, Chairman Michlewitz , members of the committee. Thank you very much for the opportunity to be here with you this afternoon, and to offer some comments. I'm here representing the Mass Business Alliance for Education. Our members come from every corner of the state representing every business type and industry and every9998 major business organization from every region. We're committed to advocating for high quality educational experiences for all students to prepare them for college, career, and citizenship. We very much recognize, how uncertain these times are and offer our gratitude to you all, with great appreciation for the work and the very thoughtful consideration that you have given over the last couple of years relative to the expenditure of FareShare revenues and doing so in a way that protects and preserves the opportunity to fund important investments.
And as such, we're not here, to add to a growing list of competing priorities, but rather to ask for some very targeted investments and a very small handful of things that we think will10043 make a difference for students. Four on that short list, three of which are already included in House Bill 55. Today, we're here to support several highly targeted evidence-based investments in the supplemental budget proposal that have the potential we believe to be transformative for students and for our state's public education system. These are tenuous times in our state's education ecosystem. Student outcomes are on a downward trend. Many of our students are still struggling to recover learning impacted by10072 the pandemic. Racial and socioeconomic achievement gaps are growing wider.
Standing by as we lose one of our major competitive advantages in Massachusetts, an education system that has been the envy of the nation, clearly standing by is not an option. And so we ask for some urgent action now on behalf of our students or our economy will suffer for many years to come. We have the opportunity with the targeted use of this10098 surplus surtax funding to invest in some game changing strategies that have been shown to make a big difference for students. Let's start with early literacy high dosage tutoring. We support the Governor's proposal to allocate $25 million to allow 10,000 students to participate in early literacy high dosage tutoring in the next school year. We must get all students reading on grade level before they fall too far behind and the research shows very clearly that high10124 dosage tutoring is an effective intervention that can help do that.
10128 Currently,10128 only 42% of our state's third graders were proficient in reading on the 2024 MCAS, and that number dropped to 24% for our low income students. These numbers are alarming when you consider that students who can't read by third grade can't read to learn, which then affects all of their academic outcomes, following in all subject areas and impact their future success. We can significantly change that trajectory with this investment. A recent analysis by Johns Hopkins University of this model, as it's currently being practiced, through philanthropic funding in many of your districts across Massachusetts, showed that participating students grew their reading skills substantially more than10171 expected as compared to their peers, achieving 5.4 months of additional learning in comparison to their peers over the course of the year.
They were much10181 more likely to be reading on grade level by the end of that school year. With this investment over time, in districts with this strategy combined with high quality curriculum material and science of reading instruction, we could expect those third grade proficiency rates to rise to as high as 80%. To scale this up, to do it the way some other states have invested, in10205 this game changing strategy, we're10207 recommending $25 million a year10209 for several year period aligned with, investing, the investments being made in literacy launch by the administration to line that time frame up, and to do so in a way that gets us to the point where we scale it up, but also giving us the next few years to determine how we will integrate this into district operating budgets in a more sustainable state local partnership way.
We're also here to support the proposed $32.5 million allocation to reimagine high school in Massachusetts. As fewer students enroll in college and far too many struggle to transition to the workforce, we have to accelerate our efforts to redesign that high school experience, make it more relevant, and create a more personalized pathway for all students. Too many high schools in Massachusetts are stuck in the past using old models of teaching and learning that are not aligned with the realities of education in the 20 first century. Those traditional models are holding too many students back from reaching their full potential with many of them just disengaging from school. We support the Governor and Secretary Tutwiler's, proposal to, invest in reimagining that high school experience, in ways that can support a variety of initiatives that include expansion10280 of pathways like early college and innovation career pathways, the awarding of industry recognized credentials.
And as secretary Tuckweiler said, the expansion of MYCAP dedicated career counseling for all students. We need to continue to expand early college, which is an initiative that the data is showing is having great impact. It's an important way to increase student opportunity and equity as well as sustaining our state's economic competitiveness. Mass Inc,10303 as many of you might already know,10305 projects that the state will have 200,000 fewer college educated workers by 2030. And so we need to double down on investments like early college, which actually doubles the odds for sustained college enrollment for students, meaning more degrees and more homegrown talent for our state's key industries. I will point out that this year's House One proposal from the Governor contains $4 million less than what is needed to expand early college next year.
I believe that, there may have been an intent to use some of this reimagining high school money for that, and so we would recommend that that get shifted somehow, through financial support in House One as something that we know will be in the base and need to be in the base for years going forward. The other investment we strongly support is the $75 million for expanding career technical education, and we're very enthusiastic about this investment. As many of you know, families and business leaders are clamoring for more seats in these important pathways. We know that Massachusetts has some of the most successful CTE programs in the country, thanks in large part to the funding and the support given to that sector by this legislature. They are producing exceptional results for students.
However, we know that demand is much greater than the supply of available seats and that many VocTech schools have far more applicants than they're able to accept, leading to long waiting lists and denied entry for many applicants. Worse yet, we know that many of the students turned away are those who could benefit most and would be most likely to enter the skilled fields that such programs are designed and prepare graduates for. So that's why we I recommend you support10403 the proposal to allocate $75 million to be used to provide grants to allow for the expansion of CTE slots in all schools. I appreciated the conversation, earlier from both Senator Feeney, senator Cronin, both of whom we know have been focused on this issue with regard to how that $75 million will get invested.
We understand the need to reduce waiting lists, but we also want to make sure that those investments go to comprehensive high schools as well where there's a very significant need, for there to be more work based learning opportunities for students, in many of those schools. And so we would ask for prioritization of those things as well as programs that meet both regional and state labor market needs and then expand access to CTE and training in equitable ways. And finally, let me close by, asking, your permission to propose for your consideration, a new item, the establishment of a student support model that will protect the investment that this legislature has made to create universal access to public higher education. We10461 are very grateful, as an organization, for the historic investments that you all10465 have made to expand higher education access and affordability.
The increases in college enrollment we've seen is evidence of the success, but we also know that the return on that investment will be diminished if we don't have a commensurate focus on college completion rates, which we all know need to be improved. And so we believe this sub-budget might be the most appropriate vehicle for a one time investment of approximately $7 million to be spent over the next three years to develop, pilot, and launch a student success model showing great results in other states, which is called ASAP, Accelerated Study And Associates Programs. The evidence is very clear, and we believe that as you have made these historic investments, you will want to protect those investments, to ensure that students are not just attending college, but they are completing in some very significant ways. ASAP has a very robust evidence base, can be easily adapted to our system, and would serve as a short money protection for your larger higher and investment, and do so over the course of the next couple of years.
Maybe with a million dollars in planning grants for next year, and $2 or $3 million to pilot it on three to five campuses, in the two years beyond that, so that you could make some smart decisions to protect that overall public higher ed investment. Let me close by, voicing our support for the other proposed investments in House 55 related to education, the funding of the SPED circuit breaker, reducing ESOL wait lists, and certainly expanding access to pre-k, particularly as a strategy for having high quality early childhood available, particularly in gateway communities. We appreciate the challenges you face. We know that you're weighing competing priorities, but we're certainly grateful for your consideration of these recommendations. And as always, we look forward to continuing our work with you on behalf of the state students. Thank you very much for your time today.
MICHLEWITZ - Ed, thank you for your testimony. Appreciate your perspective, as always.10578 Thank you. And, we will certainly take all that into consideration in this discussion. So thank you. Senator Collins.
COLLINS - Thank you, chair Mike Woods. I had a question about your thoughts about the effectiveness of regional, vocational schools versus ones that are, you know, led within a school district. Obviously, we've struggled in Boston and, you know, I know they're coming up to ask for significant help from the Mass School Building Authority, that I would support, you know, major renovation long overdue. Understanding that places like Worcester that have it inside the school district have had success, but seems to a lot of others that are regional or county based. Do you have an opinion one way or the other on how the model is more effective one way?
LAMBERT - I don't know that one model is better than the other. I think as you correctly pointed out, there are some really stellar regional vocational technical schools, in Massachusetts, and then you have an example like in Worcester, where you've got a school with a great, a great history that has done tremendous work. I know that the BPS has struggled with Madison Park and the mission and all of that over time. I don't know that there's one quick fix for that, but I do think that the idea here is to not just segregate Voc Ed in those schools, but to start to expand it to all schools. That indeed every student, even if they're on a career path, should have some work based learning opportunities, and every student who's getting some CTE work should have access to college credit and the like, so that we don't track students.
But we give them really kind of a wide range of things. That doesn't mean we shouldn't invest in schools like Madison Park, particularly for some of the very specific technical skills that are needed in a region, electricians, carpenters, etcetera. The only other advice though I would offer is that that we've we feel very strongly that these investments, the $75 million there, and and this legislature has already taken care on this, to ensure that they are aligned with labor market need. We're not doing students any service if we put them into vocational education programs for which there is no future. And so trying to identify where that work is going, making those smart investments10720 in those particular areas, we think is10722 the best way to go, and there's no reason why Madison Park or any other high school couldn't be part of a dynamic new future.
MICHLEWITZ - Thank you.
COLLINS - Thank you.
MICHLEWITZ - Thank you. Any other questions or comments from members of the committee? Okay. Ed, thank you so much.
TUTWILER - Thank you so much.
MICHLEWITZ - Thank you. Our final10739 testimony will be from10741 Reggie Ramos from Transportation for Massachusetts.
REGGIE RAMOS - TRANSPORTATION FOR MASSACHUSETTS - HB 55 - Thank you, chair Michaelowitz, chair Rodericks, and members of the committee for inviting us here today. My name is Reggie Ramos. I'm the executive10765 director of transportation for mass Massachusetts or t T4MA. And I am joined by my colleague, Pet Wilson. T4MA is a statewide coalition of community based organizations, transportation, housing and public health advocates who are collectively working to improve our transportation system across the commonwealth so residents can flourish. T4MA has long been a supporter of new revenue for transportation and a FareShare amendment has significantly increased the amount of available funding for transit, roads, bridges, and roadway safety. In 2023, T4MA, and over 30 other organizations asked the legislature for three things.
One, split FareShare spending 50:50, with education. Two spend the funds in a transparent way. Three, do not supplement current funding with FareShare dollars. To the credit of your leadership, for the most part you have supported three requests. You have recognised that these funds were initially skewed towards education and transportation remains in significant need of funding. The education and transportation fund has shown voters exactly how these funds are being spent. And funding has increased for transportation, especially for the 15 Regional Transit Authorities or RTAs across the state. Our members and your constituents are now seeing the benefits of low income fares on the MBTA and free fares on the RTAs.They are also seeing expanded service on RTAs to include evenings and Sundays, as well as no slow zones on the T for the first time in decades.
These investments have reduced commute times and aggravation10883 for residents who take transit, but we still have many needs to address across the Commonwealth. We're still at rank number four in the country for congestion in the Boston10895 area. Transportation is the leading source of emissions, and we have billions of dollars of backlog maintenance at the MBTA. Bridges needing repair and RTA service have yet to grow with increasing resident needs. We are fortunate to have the FareShare funds available to prevent draconian service cuts and fare increases at the MBTA. However, as you can see from the graph that we asked the court officers to distribute. The unexpended resources or surplus of FareShare dollars will not be sustained over the next few years as we land more accurate revenue projections and thus have increased budgeted funds.
Whichever way we invest these10939 funds, particularly the surplus, we need to make sure that they are for one time spending and that they are not over committed to programmatic investments that need to be funded in future years as there will not be enough FareShare revenue to pay for them. In short, while FareShare dollars are serving us well, the reality is investing in the Massachusetts transportation system for the long term as we should also require new sustainable10969 and dedicated revenue services. Finally, as we deliberate about how to spend for transportation or how to fund transportation, I would be very remiss not to underscore the changing landscape of marriage rates in the distribution of federal funds.
The new administration via a USDOT directed ordered preferential treatment for places with higher births and marriage rates in the distribution of the federal funds. Massachusetts does not rank in either of these categories. We are at the bottom. The bipartisan infrastructure bill is set to expire in September 2026, and every indication from the Trump administration is that future federal government spending will be reduced across the board. In addition, tariffs will spike the cost of infrastructure projects, dramatically reducing the buying power of the funds we have. Simply put, we are most likely to be on our own as a commonwealth. And the residents of Massachusetts11035 recognize this to be so.
In a recent statewide poll, nearly 60% of residents said they believe that we need to come up with a transportation funding plan without relying on federal funds. While we support the shoring up of funds from FareShare for transportation to address the urgency of the moment, it behooves us to do more. We believe we can do more. A strong transportation infrastructure and network benefits the entire economy and connects people with opportunities. We can only truly have this if we have consistent funding streams made up of various and dedicated revenue sources. We encourage and respectfully implore this committee to look beyond FareShare for new alternative equitable ways to fund transportation in the Commonwealth to benefit all residents so we can address our transportation challenges for the long haul and for good.11093 And so cyclical cliff two years hence. With that, I'd like to turn over to Pet Wilson for remarks on the Governor supplemental budget proposal.
PETER WILSON - TRANSPORTATION FOR MASSACHUSETTS - HB 55 - Thank you, Reggie and members of the committee. I'll be brief because I know the hour is getting late as they say. I'm Pet Wilson, senior policy director at T4MAS. I just want to make a couple of comments on the Governor's sub proposal as well as her FY 26, House one proposal. We more or less support the one time expenditures that are in, House Bill 55 to, put the MBTA on stable footing. However, we do recognize the disparity in the regional equity piece that Senator Commerford and others have pointed out. And we think that combined with the11157 FY 26 budget that it needs to be addressed, significantly. If you look at the Governor's FY 26 House One proposal, the MBTA receives an additional $373 million over what they received in FY 25. The RTAs received no additional funding. It's the exact same amount with the exact same distribution as this current fiscal year.
We implore these committees and the House and the Senate to look significantly at RTA funding for, across the Commonwealth. The 15 RTAs across the Commonwealth serve over 250 communities. With the fareShare funds that they have received over the last few years, they've expanded11201 service, including Sunday service, as well as adopted free fares in 13 of the 15 RTAs. The Worcester RTA in particular has seen record ridership as a result of this, and the Merrimack Valley Planning Commission just published a report that because of fare free services in the Merrimack Valley, they've seen a $2 million boost in economic activity. People need to get to where they need to go. We also would support more additional and sustained funding for micro transit.
Currently, there is no definition of micro transit in state law, So we don't know exactly what these services are, what definitions they fall under for sustainable funding, but we don't think grant funding is the way to go. It's no way to run a railroad as they say, pun intended. And11255 the second thing I'd like to point out in the Governor's FY 26 budget proposal, when the education and transportation trust fund was established, to Reggie's point, it is11265 very transparent how FareShare dollars11267 were being spent. Line items, allocations, exactly language where it's going. If you look at the Governor's proposal to securitize the transfer to make more or less an off-budget transfer to the Commonwealth Transportation Trust Fund, you will not see that language11287 anymore moving forward in the budget.
We would ask that the legislature establish a real11295 time public dashboard for how FareShare dollars on transportation are being spent. It's transparent to the voters. It allows, advocates like myself and Reggie and other organizations to understand how these dollars are being spent, as well as members of the legislature to understand not only the11314 direct allocations from the CTF, but also the bonding implications that we have moving forward for the Governor's $8 billion dollar 10 year plan. We feel that transparency is the best way to move forward when it11326 comes to spending these dollars, and that the CIP process and the fFareShare spending report that A&F does at the end of every year is not sufficient enough. So, thank you for your time. And with that, we're happy to answer any questions.
MICHLEWITZ - Rajeev and Pete, thank you for your testimony. Appreciate it in the perspective as well. Open up for any questions or comments from members of the committee. It is the witching hour, so you got off easy. We appreciate, again, you being here. Thank you, once11359 again. And so, and we'll keep talking as we move forward in this discussion. Thank you.
WILSON - Thank you.
11363 RAMOS11363 -11363 Thank11363 you.
MICHLEWITZ - So that is the testimony. That is it for the hearing. Our next Ways and Means hearing, we're going back to the FY 26 budget on Monday, in Attleboro, with health and human services, at 11:00AM, I believe. So thank you all, and, we'll talk soon. Thanks.