MBTA eyeing next fare hike in July ‘19

Relying on increased parking fees, more advertising dollars and some expected legislative relief from an employee-financing law, MBTA officials have scrunched down their projected budget gap to $36.5 million.

That is about two thirds smaller than the roughly $100 million deficit T officials projected last week, and chief administrator Michael Abramo.

The full budget will be sent to the MBTA Advisory Board next week and so far T officials are mum on some of the specific plans that could impact riders' pocketbooks, though it appears fare hikes will not be part of the picture for the budget year that starts this July 1.

MBTA General Manager Luis Ramírez recommended raising fares starting July 2019, which would have the effect of pushing back fare hike talks until after this November's elections when Gov. Charlie Baker will seek a second term.

"I wanted to wait until next year, tied to our fiscal budget process and give it the right time that it deserves," Ramírez told reporters, noting that the decision ultimately lies with the Baker-appointed board.

The public will also need to wait for details on how the T plans to extract more money from those who park their cars at T garages and lots.

The T plans to raise another $7 million in parking revenues, including $5 million from an "occupancy-based fee increase," $1 million from citation fee increases and $1 million from "event based and premium parking," according to a budget presentation that Acting Chief Financial Officer Paul Brandley made to the control board.

After the meeting, Ramírez said T officials are "still working on the plan" for parking fees, and Abramo said officials will make a presentation about parking fees to the board.

The T last raised fares in 2016 in an acrimonious process where activists drowned out a control board meeting with chanting as fares climbed 9.3 percent on average. Under prior leadership, T officials initiated a 23 percent fare increase in 2012 amid a public outcry, and two years later quietly and without controversy raised fares an average of 5 percent. Before 2012, the last fare increase was in 2007.

"If we follow this route we're going to end up having a three-year gap between fare increases," control board member Steve Poftak said Monday. "I think one of the important issues in terms of making the MBTA - putting it on a sustainable footing - is our intent that fare increases would occur on a regular basis."

Fare increases should happen "regularly at a modest rate," Poftak said.

Transportation Secretary Stephanie Pollack agreed, saying "modest but regular" fare increases are warranted.

Under the timeline Ramírez envisioned, the expected 2019 fare increase would be the last one before the T implements a new system for automatic fare collection, according Pollack, who said new fare-collection technology would make it more "technologically simple" to change fares.

State law now prohibits the T from raising fares more often than once every two years and limits the T to increases of no more than 7 percent. When the control board passed the last fare increase, they resolved not to raise fares again until January 2019 at the earliest.

An expanded digital rollout is expected to bring in another $6 million in advertising, and T officials are counting on an additional $8 million from the corporate pass program.

In prior budget discussions, T officials said a statutory requirement to move T employees off the capital budget and onto the operating budget would cost $27 million, though they hoped lawmakers would spare them from that requirement. On Monday, agency officials expressed optimism that lawmakers will go along with the governor's plan to relieve the T of that requirement.

Debt service and wages are expected to rise by several million dollars each in fiscal 2019, pushing the T's fiscal 2019 expenses to $2.057 billion under the preliminary budget presented Monday. About $30 million in savings are expected from unspecified savings in operations that Ramírez has touted as "lean productivity" programs.

T officials are counting on another roughly $187 million outlay through the annual state budget, most of which would be dedicated for capital projects.

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