MMA urges legislators to boost Ch. 90 funding to at least $300M per year and pass bill quickly

Dear Representative,

With the possibility that the Chapter 90 bond bill (H. 4358) will be before the House for action as early as today, cities and towns in every corner of Massachusetts are respectfully requesting that you and your House colleagues move swiftly to enact the bill with a $100 million-a-year increase, so that the fiscal 2023 Chapter 90 bond authorization reaches $300 million.

As the MMA has advocated for many years, cities and towns desperately need an increase in locally controlled funds used to maintain 30,000 miles of local roads and bridges in a state of good repair. Our recently updated biennial survey on gaps in local road funding across the state demonstrates that cities and towns need $600 million in Chapter 90 funding to adequately fund municipal road and bridge projects. Current Chapter 90 funding, generally flat at $200 million annually, supports only one-third of the reported need. Further, more than three-quarters of survey respondents reported that over the past five years they have had to save up Chapter 90 funds to cover the cost of necessary road projects that exceed their annual allotment.

As you know, the Governor’s $2.5 billion fiscal 2022 supplemental budget bill included a one-time allocation of $100 million for the Chapter 90 program. Local leaders were disappointed that the House and Senate versions of the bill did not include this funding. While the MMA will continue to call for a supplemental Chapter 90 appropriation in fiscal 2022, as the state collects billions of dollars in surplus tax revenue, H. 4358 is now the legislative vehicle that can finally secure a permanent increase in the Chapter 90 bond authorization to $300 million per year, indexed to grow with inflation. This is the time to support cities and towns and provide municipal public works departments with the resources they need to maintain our local roadways. We thank you for the $100 million allocation for winter road recovery repairs – that funding will go for very short-term pothole repairs, restriping of roads, guardrail repairs, and other measures to address New England winter roadway damage, and is not meant for the rebuilding of roads or execution of pavement management programs.

Chapter 90 bond-funded allocations have been generally flat at $200 million since fiscal 2012, except for fiscal 2015 when the Administration released $100 million in previously withheld authorizations to bring that year’s Chapter 90 funding to a very welcome $300 million. There have also been three smaller one-time supplemental authorizations ($30 million in fiscal 2015 for the Winter Recovery Program, $40 million in a cash appropriation from the fiscal 2018 state surplus, and $20 million in a cash appropriation in fiscal 2020 from the fiscal 2019 state surplus).

The reality is that the purchasing power of the Chapter 90 program has been substantially diminished since fiscal 2012, due to several factors, primarily construction inflation. If Chapter 90 remains at $200 million for fiscal 2023, the real (inflation-adjusted) level of state support for local road projects would drop by 42.6%, to an inflation-adjusted $117 million in fiscal 2023. That is a loss of $83.2 million in purchasing power over 11 years. This is illustrated in the following chart:

As you know well, municipalities spend far less on road maintenance and repairs than the estimated annual expenditure of $600 million that is needed to get our municipal road infrastructure system into a state of good repair. With a tightly capped property tax, communities do not have the resources to close this massive $400 million gap.

Increasing the bond authorization to $300 million annually would be an important step forward. Not only does the Chapter 90 program help keep municipal roads safe and in good condition, it also supports local businesses and economies in all parts of the state. These funds would be put to work immediately, and contribute to the state’s economic recovery from the COVID-19 pandemic as well.

Just as we urged earlier in the legislative process, we again respectfully ask you to act on H. 4358 as quickly as possible, so that the measure can be signed into law before the customary April 1 deadline, allowing cities and towns to begin the construction season on time. Because cities and towns cannot award contracts based on Chapter 90 reimbursements until official notifications are received, late passage of the Chapter 90 bond bill in recent years has forced communities to bid, award and start work on projects in a significantly shortened timeline and construction season, driving up the cost of projects due to more expensive bid responses, and reducing the scope of work accomplished. We recognize that the COVID-19 pandemic has caused the delay of many matters, including passage of the fiscal 2021 and 2022 Chapter 90 authorizations, which were not signed until July of each of those years.

Because of the shortened construction seasons, and because Chapter 90 is a reimbursement program, there has been some confusion about whether cities and towns have exhausted their current Chapter 90 allocations. It is crystal clear that cities and towns have committed all of their funding to projects that are in process, in the backlog, or require multiple years of Chapter 90 distributions. Communities can only be reimbursed after a project has been completed, so MassDOT’s record of “unexpended balances” is incomplete, unhelpful, and understates the true need. We ask you to contact your local public works department or your mayor or manager, and they will confirm this.

Last year, there was an additional delay, as cities and towns waited for enactment of a separate terms bill before official Chapter 90 notifications could be issued. To avoid this further delay, we ask you to either incorporate terms language into the bond bill, or to simultaneously advance the terms bill on a parallel track. In short, we respectfully urge timely finalization of the fiscal 2023 bond authorization and terms, and ask that you consider a multiyear authorization to avoid a process that lurches from year to year.

A multiyear bill would significantly improve the ability to plan at the local level by adding a measure of predictability and certainty regarding the amount and the timing of these critical local road funds. When Chapter 90 funding levels differ from year to year, or the timing of their release is uncertain, it is difficult for cities and towns to manage multiyear projects or implement long-term comprehensive pavement management plans. Moreover, as the Commonwealth continues to recover from the COVID-19 pandemic, enacting a multiyear Chapter 90 authorization would add to budgetary stability and legislative efficiency.

We ask you to support a permanent increase in the Chapter 90 program, with timely passage of the fiscal 2023 authorization. If you have any questions, or desire further information, please do not hesitate to have your office contact MMA Senior Legislative Analyst Jackie Lavender Bird at jlavenderbird@mma.org, or MMA Legislative Analyst Adrienne Núñez at anunez@mma.org at any time.

Thank you very much.

Sincerely,

Geoffrey C. Beckwith
MMA Executive Director & CEO