Category: Transportation

Improvements to South Station Could Boost Framingham/Worcester Rail

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According to Massachusetts Transportation Secretary Richard Davey, Boston’s South Station is “becoming a choke point in the system and an obstacle to expanded service.” Davey placed a request with lawmakers on October 9 asking them for help with negotiating a deal that has the potential to allow the expansion of South Station.

Before the MBTA can add an additional seven tracks to the existing 13, it must first purchase property owned by the U.S. Postal Service. This piece of land has been the topic of discussions for years. The property is critical for the expansion of the station in its efforts to provide prompt service to commuters traveling through South Station.

The U.S. Postal Service and South Station “have yet to strike a deal,” said Davey, who will be leaving his post as transportation secretary at the end of October. He has asked Transportation Committee chairmen Sen. Thomas McGee (D-Lynn) and Rep. William Straus (D-Mattapoisett) for assistance with coming to an agreement. Davey also mentioned that the office is interested in purchasing property that once belonged to the Spaulding Rehabilitation Hospital. This purchase would enable the expansion of the North Station rail lines with two new tracks and a center platform.

Following the signing of a transportation bond bill in April, the Patrick administration re-engaged with the Postal Service, offering to build a $350 million mailing facility in the Boston Seaport District. “Frankly, we’re a little stuck,” Davey admits. “We’ve made a number of different proposals that we thought were compelling, that made the Post Office whole.”

The Postal Service has expressed concerns that the new Seaport land would depreciate, resulting in a lower price if it should attempt to sell the property in the future.

MA Senate Passes $80 Million Spending Bill

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An $80 million spending bill was recently approved by the Massachusetts State Senate to end the 2014 fiscal year. The bill will allow select state agencies to spend money from the 2014 fiscal year in the 2015 fiscal year. Five million dollars was also included to reimburse cities for expenditures from extreme weather conditions.

While several riders ended up attached to the bill, a rider to authorize the sale of the state transportation building in Boston was stripped. This rider originated in the House and would have allowed the Massachusetts Department of Transportation building on Tremont Street to be sold to the highest bidder. The Senate was wary about moving forward with the sale. After the Senate passed the spending bill, Democrat Senate Ways and Means Chairman Stephen Brewer said, “We will have an ongoing discussion about that. I am not going to prejudge where anything ends up.”

A myriad of other items were also included in the bill. There was a section on a commission to address sex offenders, a section on prescriptions written by nurse practitioners or physicians assistants, a section regarding Taunton State Hospital, the crafting of a new unemployment table, a section on the Cambridge Public Health Commission, and sections on home energy assistance to low-income families.

There was also a specific section that earmarked two million dollars to cover the restoration costs of the Mayflower II. A section could also be found that allowed the building of a three million dollar public safety building in Senator Brewer’s hometown.

The bill seems to effectively dispense with the budget surplus, estimated to be at twenty-five million dollars, amassed by the Patrick Administration as a result of tax collections that greatly exceeded revenue estimates made for the 2014 fiscal year.

The Senate and the House orchestrated no debate or public explanation of the bill. Senator Brewer stated he is optimistic to have the final bill on Gov. Patrick’s desk quickly.

Ebola and the Economy

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Unless you’ve been under quarantine for the past few weeks, you know that Ebola has once again reared its ugly head, causing widespread concern – bordering on panic in some quarters – about the possibility of a global pandemic. How realistic a possibility is this?  Could it actually happen? Frankly, it’s still too early to say one way or the other. However, it’s not too soon to make some basic predictions about how some businesses will be affected should matters get much worse.

Dr. Bruce Aylward is the Assistant Director General for the World Health Organization (WHO). He recently announced that organization’s prediction that the number of cases is expected to top 9000 by the end of this week, and the fatality rate of the current outbreak has risen from just under 50% to over 70%. When asked how the situation might evolve over the next 60 days, he warned: “We anticipate the number of cases occurring per week by that time to be somewhere between 5,000 and 10,000 per week.”

As in previous instances of global health scares, airlines, theaters, sports arenas, and other locations where large “fraternities of strangers” gather are sure to be the first to suffer the economic consequences of a population frightened into isolation. Participating in purely recreational activities will be weighed against the fear of contagion, and attendance is sure to plummet.  Schools, churches, and other venues where attendance is “less voluntary” will follow suit in very short order if the outbreak is not quickly reigned in.

The WHO announced yesterday that the Ebola epidemic had officially been halted in Nigeria, Africa’s most populous country.  Sadly, Liberia, Sierra Leone, and other nations in the region remain mired in the misery of a highly-contagious, incurable, deadly viral outbreak, and new cases are popping up around the globe on a daily basis.  Should this situation continue, the global economy is sure to take a big hit.

From a business perspective, this could cause a loss of billions of dollars in revenue. On a more personal level, this could very likely fundamentally change the way we socialize. How big a change depends entirely on how long this outbreak takes to be subdued and how much damage it does in the meantime.

Are Occupational License Requirements Stifling Competition?

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Thanks to established corporations trying to prevent their customers from jumping ship, U.S. entrepreneurs are facing a barrage of stifling occupational licensing requirements that raise the threshold expense of launching their own business. These requirements effectively curb competition through the constraints they impose. Nationwide, the number of state-licensed occupations has skyrocketed 25 percent since 1950.

Here in Massachusetts, several groups are demanding additional license requirements for those that would otherwise enjoy what they define as an unfair competitive advantage. Specifically, Uber, an on-demand driving service that has cab owners in an uproar, is being targeted – some would say persecuted – by officials in an attempt to shut the service down.

Maggie Donovan, the Vice President of Worcester’s Red Cab, says “Because they are an app company, they aren’t required to be regulated in the same way that traditional taxi companies are. This is a company that wants to destroy the taxi industry and ultimately doesn’t care about the customers that they are providing services to.” She added, “I’m not a bank competing with a bank, I’m a bank competing with a bank robber.”

The issue has led Rep. Sam Graves, U.S. House of Representatives Small Business Committee Chair, to pen a letter to the Office of Advocacy. In it he writes, “We are concerned that occupational licensing laws…could have the unintended consequence of stifling entrepreneurship. Occupational licensing also may impede innovation and business development as would-be entrepreneurs focus their resources on meeting licensing board requirements rather than on meeting the needs of their businesses or customers.”

The committee’s first of two hearings found an interior designer, Patti Morrow, who fought the legislation in two states, stating, “Licensing this industry is nothing more than restraint of trade.”

Melony Armstrong, a hair braider in Missouri, victoriously prosecuted her state’s licensing stipulations, avoiding 3,200 hours of courses to become a licensed cosmetologist just to teach hair braiding. She asserted that “The group that benefited most from Mississippi’s regulatory regime was the cosmetology establishment. Practicing cosmetologists made up the State Board of Cosmetology and could set the bar for entry to their occupation high (and thereby keep competition to a minimum)…I was not about to submit to such naked economic protectionism.”

An official from the Federal Trade Commission said that licensing provisions do safeguard customers from dangers to their well-being, but that frequently the primary result is the stymieing of competitors. Andrew Gavil, who directs the FTC Policy Planning office, said that “In the long term, they [regulations] can cause lasting damage to competition and the competitive process by rendering markets less responsive to consumer demand and by dampening incentives for innovation.”

Currently a case is pending before the U.S. Supreme Court, between the N.C. Board of Dental Examiners and non-dental service providers for teeth whitening. Rep. Graves wrote, “It is likely…the ruling will have significant implications for occupational licensing boards moving forward.”

It’s a certainty that the decisions reached on these cases will have a huge impact on how business is conducted here in the Commonwealth.