Governor Healey’s first budget will provide the opening look at the administration’s policy priorities. This glimpse comes at what is almost certainly a defining moment for Massachusetts. After a long string of success, the state’s economy faces serious peril, brought on by a potent combination of the COVID-19 shock, regulation inhibiting housing production, and systemic failure to adequately maintain vital transportation infrastructure.

It will come as no surprise to our readers that we see HDIP as priority number one. Since COVID-19 hit, Massachusetts has lost the equivalent of a city the size of Cambridge to out-migration. And we have yet to see signs that this exodus is slowing. MassINC’s 2022 forecast that the state could lose nearly 200,000 skilled workers by the end of the decade is looking more and more conservative by the day. As we read in the Globe over the weekend, rising housing costs are forcing out even those with deep roots and a strong desire to be here.

This is especially painful to witness knowing the dramatic difference that HDIP could make. The tool has proven itself, unlocking the production of thousands of housing units and stimulating Gateway City revitalization. Massachusetts would be able to house thousands more in vibrant urban neighborhoods with walkable downtowns and excellent access to transit, if it would simply make HDIP available to all of the developers who want to build with it.

By increasing the annual cap on HDIP in her budget, Governor Healey can get construction going on dozens of at-risk projects overnight. Equally important, including HDIP in the budget will send a loud signal that the administration is committed to partnering with developers who bring private capital and know-how to complex urban infill projects. While this action alone could more than double the rate of housing production in Gateway Cities over the next decade, we recognize that it only responds to part of the problem.

When it comes to attracting and retaining talent, the state’s transportation woes have become almost as large a drag as housing. Writing for Commonwealth last weekend, former state transportation secretary Jim Aloisi offered sage advice for the new Governor: Get the state’s house in order before attempting to hire a new manager for the MBTA. His to-do list includes shoring up the agency’s finances, hiring drivers, and overhauling procurement and capital projects. We would add correcting irrational commuter rail fare policy and a dysfunctional relationship with the regional transit agencies.

Effectively operating a rail service is an impossible task when residents of the communities served by rail cannot afford to utilize it and those with the means find a much better value-proposition in driving, no matter how much traffic they encounter. High fares also undermine the economics of transit-oriented development by essentially placing a heavy tax on those who would otherwise find it attractive to live in a dense neighborhood within walking distance of a commuter rail station.

We believe the revenue brought into the system by the induced ridership lower commuter rail fares will produce could more than offset lost revenue, especially if the approach leans heavily on a means-tested component. But the Governor should still establish a contingency fund in her budget to make up for any lost revenue, which is likely in the short term, as commuting patterns shift in response to an economical regional rail transit option.

The Healey Administration can provide a final piece of much needed leadership by establishing an adequate and predictable funding mechanism for regional transit agencies. When it comes to making Gateway Cities dense economic centers, RTAs are just as important as regional rail to the long-term formula. No matter how innovative, the efforts of these agencies to improve service so that households can live comfortably in Gateway Cities without owning a vehicle struggle to gain traction because of perpetual budget challenges. It is impossible to build and retain ridership when the resources to sustain routes and adequate service vary from year to year.

Compiling a first budget that responds creatively to the diverse range of needs in the commonwealth is a test for every administration. Our transition memo presented numerous ideas, including investments in people that will be equally critical to the long-term future of Gateway Cities and their regional economies. But there is no doubt that the acute housing and transportation crises demand bold and immediate action. Next week we will see how the Healey team rises to the challenge.

The Gateway Cities Innovation Institute strengthens connections across communities and helps Gateway City leaders advance a shared policy agenda. Click here to sign up for the biweekly Gateway Cities Journal to receive updates on current policy issues impacting Gateway Cities across the state.