Despite the overwhelming need for capital investments and the limited resources available to fund them, the Patrick-Murray Administration has made great progress in improving the Commonwealth’s capital investment program since taking office in January 2007. The following highlights summarize some of the Administration’s accomplishments in the areas of capital investments and capital finance generally.
First-Ever Debt Affordability Policy - The Patrick-Murray Administration developed and published the first-ever debt affordability policy, which has been positively reviewed by credit rating agencies. This analysis has been updated annually and the current analysis is presented in Appendix A.
First-Ever Five-Year Capital Investment Plan - The Administration published the first-ever comprehensive and transparent five-year capital investment plan based on the new debt affordability policy. This report represents the Administration’s sixth annual five-year capital investment plan and has been developed within the parameters set forth in the debt affordability policy.
Bond Bills - After publication of its first five-year capital investment plan in the summer of 2007, the Governor filed a series of multi-year bond bills authorizing over $16 billion in capital investments that, together with the $1.8 billion Immediate Needs Bond Bill passed earlier in 2007, reflected the capital investment priorities for the Commonwealth included in the five-year plan. The legislature overwhelmingly approved each of the bond bills. In August 2010, the Governor signed into law an economic development bill that included new bond authorization for certain economic development programs. In 2011 and 2012, the Governor approved two $200 million bond bills for local Chapter 90 road and bridge construction, and in 2012, an additional $885 million in bond authorization to continue transportation projects through FY2013 and leverage federal funding. At this point, some of the bond authorization will be soon exhausted and the Administration will be seeking additional authorization over the next year. The bond bills are described in more detail in Appendix B.
Completion of Key Projects - A number of important new capital projects and programs have been initiated and completed by the Administration, including: the new Worcester Recovery Center project, the Emerging Technologies and Innovation Center at the Lowell campus of the University of Massachusetts, new courthouses in Taunton, Salem and Fall River, the Corrections Master Plan and many more. The Administration also initiated and continues to work on the Green Line Extension, South Coast Rail and the Accelerated Bridge Program. These and many other capital investment project highlights are described later in this report in the respective investment category sections.
Accelerated Bridge Program - The Administration, working with the legislature and the Treasurer, developed a $3 billion Accelerated Bridge Program which is repairing hundreds of structurally-deficient bridges, creating new construction jobs, building conditions for long-term economic growth and saving the Commonwealth hundreds of millions of dollars in avoided construction cost inflation and deferred maintenance costs. This program is well underway and is discussed in more detail in the Transportation section of this report.
State Facility Maintenance - The Administration has taken steps to improve maintenance and accessibility of state facilities. Funding in the capital budget is dedicated for small capital maintenance and repair projects. By dedicating more funding to these types of projects, the state will defer less of its capital investment needs and avoid larger, more expensive capital project needs in the future. The funding for these projects is allocated based on a need-based evaluation process through the Division of Capital Asset Management and Maintenance (DCAM). The Administration is committed to building on its efforts to improve the maintenance and accessibility of state facilities.
Energy Efficiency Requirements for State Building Projects - Governor Patrick issued Executive Order 484 which, among other things, established the Governor’s “Leading By Example Program” requiring that all state agencies reduce their environmental impact by promoting energy conservation and clean energy practices. The Administration has also set high minimum “green building” standards for all new state building projects and aims to go above and beyond such standards wherever possible, including plans for certain buildings to be “energy neutral”.
Clean Energy Investment Program – In January 2010, the Governor created the Clean Energy Investment Program as a means to affordably finance energy efficiency and renewable energy improvements to state facilities. These investments are crucial to achieving the goals of Executive Order 484.
Accelerated Energy Program – In this capital investment plan, the Patrick-Murray Administration has taken its commitment to energy efficiency use one step further with the launch of the Accelerated Energy Program. Modeled on the highly-successful Accelerated Bridge Program, and using the innovative funding mechanism of the Clean Energy Investment Program as well as assistance from energy utilities, the Accelerated Energy Program will “green” 700 sites in 700 working days.
Innovative Financing Initiatives – In addition to the Clean Energy Investment Program mentioned above, the Administration has pursued various other financing initiatives to more effectively leverage state resources to fund more capital project needs. These initiatives include: increased allocation of private activity bond volume cap to multi-family affordable housing projects to leverage related federal tax credits to fund millions of dollars of affordable housing projects, including improvements to our public housing supply; “I-Cubed” legislation to finance infrastructure improvements needed to support new private development with the new state tax revenues generated from the development; and the financing of the East-West Parkway project at the former South Weymouth Naval Air Base from new state tax revenues to be generated from private development at the base.
Oversight and More Transparency through the State Finance and Governance Board (formerly the Finance Advisory Board) - Through new gubernatorial appointments, staff support provided by the Executive Office for Administration and Finance (A&F), and greater oversight responsibilities included in recent legislation, the Administration has strengthened the role of the this board. With these improvements, the board ensures transparency, accountability and best practices among state entities that borrow, invest and manage public funds. In furtherance of promoting transparency, accountability and best practices, the Board has adopted regulations with respect to debt issuance and derivative transactions. In the context of the turmoil in the financial markets since 2008, this oversight is critical to ensure public confidence in the sound management of public funds.
Creation of MassWorks Infrastructure Program – The Administration created the MassWorks Infrastructure Program to consolidate state infrastructure grant programs that support economic development and to provide one-stop shopping for municipalities seeking to participate in these programs. This program coordinates state review of applications and decision-making.