Transportation Reform

Overview of the Reform Act

The Patrick-Murray Administration is leading the radical change of the Commonwealth’s transportation systems, which have suffered from decades of neglect and inaction.  In June 2009, Governor Patrick signed Chapter 25 of the Acts of 2009, “An Act Modernizing the Transportation Systems of the Commonwealth of Massachusetts, (as amended by Chapter 26 of the Acts of 2009, collectively, the “Act”) creating a streamlined Massachusetts Department of Transportation (MassDOT).  A renewed focus on customers, safety, innovation and accountability drives the day-to-day operations of the new Massachusetts Department of Transportation.

A modern transportation network is essential to our economic future.  Our roads, rails and bridges serve as the conduit for commerce and economic growth. A high functioning transportation system is a necessity for the Commonwealth to attract and retain the investment that assures opportunities for ourselves and our children.  The improvements made possible through this Act matter to businesses which need to be able to move goods and services around, across and through the state to markets.

Transportation is an essential resource for the Commonwealth’s residents and visitors.  From Route 2 to Interstate 91, the MassPike to Route 24, a coordinated and functioning transportation system matters to residents who need to get to work every day and home again.  A Regional Transit Authority or MBTA bus matters to students who need it to get back and forth to school.  Our roads, buses and trains matters to the millions of tourists and other visitors who need convenient access to the Commonwealth’s many cultural and recreational attractions

MassDOT represents a merger of the Executive Office of Transportation and Public Works (EOT) with the Massachusetts Turnpike Authority (MTA), the Massachusetts Highway Department (MHD), the Registry of Motor Vehicles (RMV), the Massachusetts Aeronautics Commission (MAC) and the Tobin Bridge.  In addition, the Massachusetts Bay Transportation Authority (MBTA) and Regional Transit Authorities (RTA) are subject to oversight by the new organization.  The new organization also assumed responsibility for many of the bridges and parkways formerly operated by the Department of Conservation and Recreation (DCR).

An organization chart showing the hierarchy of MassDOT.  The department is organized into the following five divisions, Highway, Transit, Aeronautics and Motor Vehicles.

The department is governed by a five member board and administered by the Secretary of Transportation, appointed by the Governor to serve as Chief Executive Officer of the department. MassDOT is comprised of the following four divisions:

Transportation Funding Sources

The Commonwealth’s transportation system is funded from five sources and administered through two separate funds.  Funding sources include state taxes, motor vehicle fees, federal funds, toll revenue and bond proceeds. These funding sources are maintained within the Commonwealth Transportation Fund (CTF) and Massachusetts Transportation Trust Fund (MTTF) to segregate and fully account for transportation-related revenue and expenditures. A description of these funding sources and the related trust funds is provided below. 

The Commonwealth Transportation Fund retains revenue from the motor fuels tax, a dedicated 0.385% of the state sales tax and motor vehicle fees.  The fund is used to pay debt service associated with highway maintenance and construction projects and provides funding for the operation of MassDOT. It also receives federal reimbursement generated by the Commonwealth’s expenditures on transportation construction projects. The Fund was established as part of the historic transportation reform Act and replaces the former Highway Fund, beginning in fiscal year 2011, as the principal source of transportation-related revenues and expenditures for the Commonwealth.

Prior to 2000, the MBTA received an unlimited “net cost of service” payment from the Commonwealth to offset costs incurred in the previous fiscal year for providing bus and rail service within the metropolitan Boston region.  The “forward funding” reform of 2000 provides the authority with a current year dedicated 1% of the sales tax.  However, since 2000 the dedicated sales tax growth has been much slower than overall historic and projected trends.  During this period, operating expenses have continued to grow based on the rising cost of health care, energy, transit services and collective bargaining agreements.  For this reason, in fiscal year 2009 Governor Patrick and the Legislature agreed to provide the authority with an additional $160 million in supplemental funding to ensure safe, cost effective services expected by riders of the “T.”

Regional Transit Authorities have similar financing sources as the MBTA but they continue to receive net cost of service payments from the Commonwealth in arrears.  The 15 individual authorities rely on fares, local assessments levied on cities and towns within their service district, operating subsidies provided the Commonwealth and federal funds.  These authorities are also required to operate within their own revenue sources.

House 2 Recommendations for Transportation

In prior fiscal years, the annual budget included individual line items for transportation agencies and programs. The Act eliminated that structure.  The fiscal year 2011 budget recommendations reflect changes brought about by the Act.  MassDOT receives the amount appropriated from the Commonwealth Transportation Fund after obligations for debt service, contract assistance and other state transportation programs are funded.  In addition, the transferred amount also includes the sales tax earmarked to the MBTA and RTAs by Chapter 35 of the Acts of 2009.

The new line item structure is consistent with the goals of reform and provides additional transparency and flexibility for the funding of MassDOT and its component divisions. Through the annual operating transfer, MassDOT will fund its operating divisions as well as targeted investments for the MBTA and RTAs. Based on available revenues and projected transportation debt service, the Governor’s budget recommendation proposes to appropriate a transfer of $375.1 million to the Massachusetts Transportation Trust Fund in fiscal year 2011. This amount includes $160 million for the MBTA, $15 million for Regional Transit Authorities and $200 million for the operation of MassDOT.  The amount of the transfer allocated to each MassDOT division and program will be reflected in a fiscal year 2011 budget to be released later in 2010 by MassDOT.

Reform Activities and Cost Savings

The road to transportation reform began long before June of 2009.  After receiving the Transportation Finance Commission report in 2007 that detailed decades of inaction and neglect by previous administrations, Governor Patrick began a plan to secure the Commonwealth’s economic future and maintain safety of the state’s roads and bridges.  Under Governor Patrick’s leadership, the transportation agencies and authorities generated savings and efficiencies through the Massachusetts Mobility Compact, while working on a long-term reform plan.  Those reforms included joining 49 other states in using civilian flaggers rather than police details on construction projects, streamlining project delivery time at MassHighway by 40%, saving $47 million at the MBTA by reducing overtime costs and staff levels and increasing employee health care contributions, and saving $31 million at the Turnpike by eliminating middle management and toll takers.  With the legislature’s support, the Governor launched the Accelerated Bridge Repair Program to address the backlog of maintenance projects left by previous administrations.

Over the past seven months employees from former state transportation agencies, quasi-independent authorities and other state agencies have been engaged in implementing the historic reform act.  As a result of these activities, MassDOT is a functioning, independent department providing services to visitors and residents of the Commonwealth.

As a result of transportation reform, the department has realized the following savings and efficiencies:

MassDOT continues to integrate the Turnpike Authority and Highway Department into the new Highway Division.  The administration will improve Registry operations for the 21st century with the goal of shorter wait times, enhanced customer service and focus on safety programs. Statewide airport planning, financing and operations efficiencies will be realized through the new Aeronautics Division.  Finally, the newly formed MassDOT is building upon the fiscal, human resources and legal “Shared Services” programs implemented by the former Executive Office of Transportation and Public Works in 2004.  Shared Services allows division heads to make policy and funding decisions while implementation of those decisions is managed by secretariat staff.  This creates additional freedom and resources for line level and division managers to focus on core mission activities.  The new MassDOT website,, is routinely updated with progress reports demonstrating the department’s commitment to safety, transparency and the goal of creating one transportation system for the Commonwealth.