The MBTA faces a Fiscal 2013 Budget deficit of $161 million (roughly 10% of its budget) and has proposed two alternative scenarios for closing the gap: Scenario I relies primarily on substantial fare increases (overall increase of 43%); Scenario II substantially consolidates bus routes — eliminating many, but improving a few of the most heavily used, while nonetheless still increasing fares by 35%. Constituents all across my Senate district have voiced strong concern about both scenarios but have tended to prefer fare increases to service cuts.
The problem is real: I haven’t heard any knowledgeable commentator suggest that the budget gap is illusory or that it can be substantially narrowed by better cost-control. Moreover, fare revenue currently covers less than half of the operating cost of the system and every route in the system loses money; therefore, it is not practically possible to make the system more profitable by increasing service.
Public transit is broadly beneficial to the metropolitan area, improving air quality, reducing central congestion and providing an essential alternative commuting mode for many workers. In recognition of its importance, state and local taxes already subsidize two-thirds of the total budget of the system, including both operating costs and debt service. Click here for a summary of the MBTA’s budget.
An infusion of additional state subsidy funds might appear to offer an alternative to the grim scenarios proposed, but there is more bad news that we need to absorb: (a) the budget gap is expected to widen in future years; (b) the true budget gap is much greater than stated — if the T were spending what it should to maintain its assets, the gap would be several hundred million dollars greater.
Some additional infusion of state funds is clearly necessary, but that infusion should go first to restructure debt payments that are slated to balloon in future years and to improve maintenance. If we don’t pay down the debt, we’ll face further financial crises. If we continue to under-maintain the system, the likely result will be more breakdowns and surprises and a degradation of service that will drive riders away and possibly threaten the region’s economy.
Some combination of fare increases and service cuts appears inevitable in Fiscal 2013. An infusion of state funds is also inevitable, and I will advocate for that over the months to come. However, it would not surprise me if it takes a another year or two for us to grapple with the long-term issues and structure a new revenue source for the T. We will need to satisfy legislators across the state that the cost structure of the T is reasonable and that all alternatives to greater subsidy have been fully explored.
As to particular routes that are of concern to my district, I think that most have a good shot of being preserved in the coming year. The first scenario proposed by the T, the scenario involving larger fare increases, eliminates only bus routes that have subsidy levels more than three times the system-wide average — the average is $1.42 per weekday passenger bus trip, 3 times the average is $4.26. The routes affected are mostly more remote suburban routes beyond Cambridge, Belmont, Watertown and Boston. For a good view of the how the cuts fall, view the figures that follow page 6 in the T’s impact analysis.
In Scenario II, routes where the subsidy per passenger trip is greater than $2.00 are targeted for elimination. This criterion sweeps in routes all over the metropolitan area. Brighton’s 64 (at $2.33) and 501 (at $2.68) and Belmont’s 74 (at $2.34) are not far above that threshold and so would likely be protected in a compromise scenario. However, Brighton’s 503 and Belmont’s 78 may be harder to protect over the long term with respective subsidies of $3.45 per passenger trip and $3.60. See Table 2-1 of the T’s impact analysis to compare subsidy levels for different bus routes.
I look forward to working with the T and with my colleagues in the legislature to minimize service cuts and to put the system on a firm financial footing for the long-term.
Here is a list of online resources on the issues:
- A T pamphlet offers a basic view of the alternative scenarios and what the T has been doing to control costs and improve service; it also includes a schedule of public meetings.
- The T’s budget projection shows increasing deficits for years to come.
- The T’s impact analysis provides the most detailed explanation of the scenarios considered.
- The D’Allesandro report on the condition of the T offers a thorough analysis of how the finances of the T have deteriorated, primarily as a result of increasing operating costs.
- The 2007 Transportation Finance Commission reportputs the problems of the T in the context of broad underfunding of the transportation system.
- A report by MASSPIRG emphasizes the historical impact of Big Dig cost overruns on the financial condition of the T.
- Energy Information Administration publications show that fuel oil prices more than doubled from 2000 to 2011 and electricity prices jumped by more than 50%.