STATE HOUSE, BOSTON, FEB. 29, 2012…..The Legislature, which has extended numerous fiscal lifelines to the MBTA over the years, is taking a wait-and-see approach to the agency’s latest bout with financial turmoil although one top leader says lawmakers will have to act this spring.
While facing pressure from constituents who may need to pay more to ride the T and see fewer services, legislative leaders say they won’t intervene to rescue the services for millions of commuters until the agency presents its own plan to close a $159 million projected deficit, which is expected within a month.
House Speaker Robert DeLeo told the News Service Tuesday that a hearing on T fare hikes and service cuts in Winthrop on Monday night drew hundreds of concerned residents.
“Right now, I think this is the issue that all reps are hearing out there. This is by far the issue that we’re hearing. I don’t remember the last time I saw a public hearing attended by this many people,” he said. “There are some folks who are screaming for increased taxes and whatnot and there are a lot of folks yelling – and they yell ‘no we don’t want to pay more taxes.’ The bottom line, and I said this last night, is I think it’s much too premature for us to be stepping in.”
DeLeo added: “I think before we talk about a legislative fix, I think you really need to see what the T is going to do. Let them play out and see what their answer is. What other places can they save? What other places can they have savings or what not? I think we have to let that play out a little bit before we get involved.”
DeLeo noted that he’s received information about proposals to move certain MBTA services under the more fiscally sound Massachusetts Port Authority, although he said has questions about their feasibility. He also cited a recent report by Inspector General Gregory Sullivan estimating that $60 million could be saved within the MBTA’s program for the disabled, known as the RIDE, one of the budget-busters that T officials say contributed to budgetary imbalances. MBTA officials also say soaring energy costs and a $5.2 billion debt burden have been sapping the agency’s funding.
Next fiscal year, which begins July 1, the MBTA anticipates receiving about $1.63 billion in revenue compared to $1.79 billion in expenses. MBTA documents show the agency expects to pay $442 million in debt service next fiscal year, an $80 million increase from this year, representing a 22 percent increase. Disability insurance costs are also set to rise sharply – by 173 percent, from $16.8 million to $46 million.
On the other revenue side of the ledger, the MBTA is anticipating the receipt of $794 million in sales taxes – a 2.3 percent increase – plus an annual $160 million boost that the Legislature began providing in 2009. Fare revenue is expected to climb 1.9 percent to $463 million.
To close the budget gap, the MBTA has proposed two solutions, one that would raise fares 43 percent and impose cuts to several dozen bus routes, ferry service and commuter rail, and another that would raise fares 35 percent but hit commuters with more drastic reductions in service, including the elimination of weekend and late-night commuter rail, as well as weekend service on the E Line subway.
With gas prices rising and the economy on a slow recovery path, the MBTA is nearing the end of hearings to gather public feedback. Each stop has featured hundreds of attendees demanding that the agency limit the pain to riders or, barring that, for the Legislature to step in and bail out the system.
The board of the MBTA is required to ratify a budget by April 15, although transportation officials say they’re more likely to act at an April 6 meeting, just over five weeks away.
Senate President Therese Murray, in an interview on WCVB’s “On the Record” Sunday, pledged legislative action after the hearing process plays out.
“There will have to be something done, and once they finish the public hearings that they’re doing across the state and their board comes to us and says this is what we have, this is what we have to do, then we’ll have to act,” she said.
Murray said any action by the Legislature would likely not be enough to prevent a fare increase and that it would be a precursor to a longer-term transportation financing solution to support the MBTA, roads and bridges, regional bus systems, and others transportation infrastructure. Many lawmakers represent communities not served by the MBTA but with other unmet transportation needs.
After passing a transportation reform law in 2009 during a debate lawmakers framed around a “reform before revenue” approach, legislative leaders and Gov. Deval Patrick have not come up with any revenue proposals for the transportation system, despite acknowledging major funding gaps that won’t be erased by reform initiatives alone. They’ve also warned that federal funding could be in jeopardy, the result of a Congress increasingly focused on spending cuts and deficit reduction.
Recently, some lawmakers have clamored for a solution to the MBTA’s fiscal woes, worrying that constituents in the 175 communities served by the MBTA would either be forced back into their cars – worsening air quality and clogging roads – or cut off from access to their jobs altogether.
The discussion of fare hikes and service cuts comes at the same time the T has boasted 12 straight months of growth in ridership. T officials announced this week that January rides increased 10.2 percent over the same months a year earlier, averaging 1.271 million trips per day. Officials credit higher fuel prices and an unseasonably warm winter for the increase, as well as declining unemployment. The agency saw increased ridership on all modes of transportation, including a 15.9 percent surge on the commuter boat, which would lose its entire state subsidy under the T’s budget proposal.
The co-chairs of the Legislature’s Transportation Committee have been non-committal about whether they intend to act to assist the MBTA, instead speaking generally and without specifics to the need for a long-term solution for statewide transportation finance woes, one they say likely won’t materialize until next year.
The Legislature has a long history of assisting with the MBTA’s finances. After years of paying the tab for the T’s unpaid bills, the Legislature a decade ago adopted a so-called forward funding system that awarded the T a portion of the state’s sales tax revenues and was designed to make the agency fiscally independent. The T subsequently raised fares three times, the last coming five years ago. In 2009, Patrick proposed raising the state gas tax, but lawmakers balked, opting instead to raise the sales tax 25 percent – from 5 percent to 6.25 percent – and to earmark more revenue toward transportation system.
Murray has suggested that the Patrick administration should lead on a transportation finance plan before the Legislature responds.