Capital Spending

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bgcolor="#7F99B2" height="14"> </td> <td colspan="2" bgcolor="#7F99B2" height="14"><a target="_top" href="/bb/fy2004h1/execsumm/es9.shtml">Revenues</a></td> </tr> <tr valign="top" bgcolor="#7F99B2" class="nav1"> <td width="15" bgcolor="#7F99B2"><img src="/bb/fy2004h1/images/arrow1.gif" width="15" height="15"></td> <td colspan="2" bgcolor="#7F99B2" height="14"><a target="_top" href="/bb/fy2004h1/execsumm/es10.shtml">Capital Spending</a></td> </tr> <tr valign="top" bgcolor="#7F99B2" class="nav1"> <td width="15" bgcolor="#7F99B2" height="14"> </td> <td colspan="2" bgcolor="#7F99B2" height="14"><a target="_top" href="/bb/fy2004h1/execsumm/es11.shtml">2004 Budget Summary</a></td> </tr> <tr> <td colspan="3"><img src="/bb/fy2004h1/images/navdots_5.gif" border="0" alt="" width="190" height="1"></td> </tr> <tr> <td height="24"> </td> <td height="24" colspan="2" class="nav"><a href="/bb/fy2004h1/budget_recommendations/govarea">Budget Recommendations</a></td> </tr> <tr> <td colspan="3"><img 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cellspacing="0" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111"> <tr> <td width="425" bgcolor="#7F99B2"><h2>Executive Summary</h2></td> <td width="125" bgcolor="#7F99B2"> </td> </tr> <tr> <td height="24" bgcolor="#26517D"><h3>Capital Spending</h3></td> <td bgcolor="#26517D"><div align="center"> <a href="/bb/fy2004h1/print/execsumm/es10-print.shtml" target="_top"><img border="0" src="/bb/fy2004h1/images/printer_friendly2.gif" width="97" height="23"></a></div></td> </tr> </table> <table width="550" border="0" cellspacing="0" cellpadding="0"> <tr> <td height="15" colspan="7"><img src="/bb/fy2004h1/images/spacer.gif" width="15" height="15"></td> </tr> <tr valign="top"> <td width="15"><img src="/bb/fy2004h1/images/spacer.gif" width="15" height="15"></td> <td width="100%"> <body bgcolor="#FFFFFF"> <p>The Commonwealth’s capital budget supports construction and maintenance of a variety of important public assets that contribute to the economic well-being and quality of life in Massachusetts. Fiscally responsible management of our long-term assets is essential.</p> <p>In order to maximize the effectiveness of capital investments, the Executive Office for Administration and Finance is undertaking a comprehensive strategic review of the Commonwealth’s capital planning practices to ensure that the capital spending program fits within a sustainable growth framework.</p> <p>This review entails an examination of how capital spending priorities are established and financed as well as whether additional or alternative planning tools might be useful for determining the prioritization of capital investments and the resulting allocation of capital resources. We are also looking at whether the current annual capital spending cap of $1.2 billion is set at the appropriate level, given such factors as historical patterns of capital spending and finance, the growth in the depth and breadth of the Massachusetts economy over the past decade, the need to invest in the infrastructure to assure a base for continued future growth and preservation of the long-term viability of existing assets. </p> <p>About $3 billion will be spent on capital projects in 2003. Subject to the strategic review now underway, the table below summarizes planned capital spending.</p> <table width="500" border="0" align="center" cellpadding="0" cellspacing="0"> <tr> <td bgcolor="#999999"> <div align="center"> <center> <table width="100%" border=1 cellpadding=2 cellspacing=0 style="border-collapse: collapse" bordercolor="#111111"> <thead> <tr> <td bgcolor="maroon" nowrap ><b><font size="2" face="Arial" color="#FFFFFF">USES</font></b></td> <td bgcolor="maroon" align="right" ><b><font size="2" face="Arial" color="#FFFFFF">2003</font></b></td> <td bgcolor="maroon" align="right" ><b><font size="2" face="Arial" color="#FFFFFF">2004</font></b></td> <td bgcolor="maroon" align="right" ><b><font size="2" face="Arial" color="#FFFFFF">2005</font></b></td> <td bgcolor="maroon" align="right" ><b><font size="2" face="Arial" color="#FFFFFF">2006</font></b></td> <td bgcolor="maroon" align="right" ><b><font size="2" face="Arial" color="#FFFFFF">2007</font></b></td> <td bgcolor="maroon" align="right" ><b><font size="2" face="Arial" color="#FFFFFF">Total</font></b></td> </tr> </thead> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Transportation</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial"> $ 2,028</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">$ 1,632</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">$ 1,290</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">$ 923</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">$ 710</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">$ 6,583</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Infrastructure</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">282</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">279</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">252</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">252</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">252</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">1,317</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Economic Development</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">350</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">222</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">47</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">44</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">54</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">717</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Environment</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">129</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">125</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">125</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">125</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">125</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">629</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Housing</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">114</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">113</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">101</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">101</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">101</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">529</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Information Technology</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">86</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">115</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">105</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">105</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">105</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">516</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Public Safety</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">41</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">29</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">21</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">21</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">21</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">132</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Reserve</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">          1</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">        26</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">      114</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">      117</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">      107</font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial">       365</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial"><b>TOTAL USES</b></font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial"><b>$3,030</b></font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial"><b>$2,540</b></font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial"><b>$2,055</b></font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial"><b>$1,688</b></font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial"><b>$1,475</b></font></td> <td bgcolor="#FFFFEF" align="right"><font size="2" face="Arial"><b>$10,788</b></font></td> </tr> <thead> </thead> <tr> <td bgcolor="maroon" nowrap ><font size="2" face="Arial" color="#FFFFFF"><b>SOURCES</b></font></td> <td bgcolor="maroon" align="right" ><font size="2" face="Arial" color="#FFFFFF"><b>2003</b></font></td> <td bgcolor="maroon" align="right" ><font size="2" face="Arial" color="#FFFFFF"><b>2004</b></font></td> <td bgcolor="maroon" align="right" ><font size="2" face="Arial" color="#FFFFFF"><b>2005</b></font></td> <td bgcolor="maroon" align="right" ><font size="2" face="Arial" color="#FFFFFF"><b>2006</b></font></td> <td bgcolor="maroon" align="right" ><font size="2" face="Arial" color="#FFFFFF"><b>2007</b></font></td> <td bgcolor="maroon" align="right" ><font size="2" face="Arial" color="#FFFFFF"><b>Total</b></font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Long-Term Debt</font></td> <td bgcolor="#FFFFEF" ><font size="2" face="Arial"> </font> </td> <td bgcolor="#FFFFEF" ><font size="2" face="Arial"> </font> </td> <td bgcolor="#FFFFEF" ><font size="2" face="Arial"> </font> </td> <td bgcolor="#FFFFEF" ><font size="2" face="Arial"> </font> </td> <td bgcolor="#FFFFEF" ><font size="2" face="Arial"> </font> </td> <td bgcolor="#FFFFEF" ><font size="2" face="Arial"> </font> </td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Statutory Limit</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">$1,225</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">$1,200</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">$1,200</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">$1,200</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">$1,200</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">$6,025</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Not Subject to Statutory Limit</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">576</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">103</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">100</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">778</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Special Obligation Debt</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">259</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">148</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">406</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Grant Anticipation Notes</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Operating revenues</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">27</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">480</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">283</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">22</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">812</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Third-Party payments</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">245</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">117</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">134</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">185</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">--</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">682</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial">Federal payments</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">698</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">492</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">338</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">281</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">275</font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial">2,084</font></td> </tr> <tr> <td bgcolor="#FFFFEF" nowrap ><font size="2" face="Arial"><b>TOTAL SOURCES</b></font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial"><b>$3,030</b></font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial"><b>$2,540</b></font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial"><b>$2,055</b></font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial"><b>$1,688</b></font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial"><b>$1,475</b></font></td> <td bgcolor="#FFFFEF" align="right" ><font size="2" face="Arial"><b>$10,788</b></font></td> </tr> </table></center> </div> </td> </tr> </table> <p align="center"><font size="1">Estimates include funds on deposit and certain dedicated fees and earnings.</font></p> <h6>Debt issuance</h6> <p>The primary source of funding for capital spending is proceeds from the sale of long-term debt. The state issues two types of bonds. The first is general obligation bonds that are backed by the full faith and credit of the Commonwealth. These bonds are subject to the annual capital spending limitation and debt service is paid through the operating budget. In 2003, an additional $25 million in general obligation bond authorization was carried forward from the previous year. For Fiscal Year 2004 and beyond, the appropriate level will be determined based upon the results of the comprehensive review referenced above.</p> <p>The second type of long-term debt is special obligation bonds, which are not subject to the cap. These bonds are backed by and financed through a dedicated revenue stream, such as registration and license fees. The current plan calls for expending $835 million of such debt in 2003 and $251 million in 2004. </p> <h6>Other sources</h6> <p>Massachusetts receives federal reimbursements for transportation-related improvements: $689 million in 2003 and $492 million in 2004 is anticipated, primarily as shared funding of the Central Artery/Tunnel project. The Commonwealth also receives various fees and payments, including contributions from the Massachusetts Water Resources Authority to offset watershed land protection costs and from the Massachusetts Port Authority for the Central Artery/Tunnel project. In 2003, $245 million in capital investments will come from third-party sources; $117 million is anticipated for 2004.</p> <table width="90%" align="center"> <tr> <td width="48" align="left"><a target="_top" href="/bb/fy2004h1/execsumm/es9.shtml"><img src="/bb/fy2004h1/images/prev.gif" alt="previous" height="47" width="48" border="0"></a></td> <td width="100%"> </td> <td width="47" align="right"><a target="_top" href="/bb/fy2004h1/execsumm/es11.shtml"><img src="/bb/fy2004h1/images/next.gif" alt="next" height="47" width="47" border="0"></a></td> </tr> </table> </td> <td width="15"><img src="/bb/fy2004h1/images/spacer.gif" width="15" height="15"></td> </tr> <tr> <td height="15" colspan="6"><img src="/bb/fy2004h1/images/spacer.gif" width="15" height="15"></td> </tr> </table> <table width="550" border="0" cellspacing="0" cellpadding="5"> <tr> <td><div align="center"> <p class="Copyright">© Copyright 2003 Commonwealth of Massachusetts</p> </div></td> </tr> </table> </td></tr></table> </td></tr></table> </body>