The MBTA is facing a $161 million budget gap for the fiscal year (FY) 2013. On top of lacking cash to make it through the year, the MBTA currently owes $20 billion to the state– a result of taking loans to pay for debt. As a solution to the problem, the MBTA is planning to raise fares by as much as 43 percent overall. They also plan to cut service and reduce operating hours.
The MBTA’s Fare Increase Booklet proposes “two scenarios to close the projected deficit. Scenario 1 includes a higher fare increase and a smaller number of service reductions. Scenario 2 includes a slightly lower fare increase but larger service reductions.”
Hannah Hutchinson, chair of MassPIRG’s State Board as well as the UMass Boston Chapter, has been working to spread the word about the fare hikes and encourage people to attend the meetings hosted by the MBTA. “The solutions are not solutions,” Hutchinson said. “The [state legislators and MBTA officials] should be looking for new sources of revenue, instead of pushing the burden of their debt on to their customers.”
According to Steve Martinson, Director of Transportation Services, the university plans to write a letter to the MBTA, informing them of the negative effect fare hikes and reduction in service would have on UMass Boston students.
The MBTA has implemented cost-saving strategies like firing people and cutting overtime pay. The Fare Hike Booklet claims “staff reductions, scheduling and assignment changes have produced substantial savings to the Authority. Savings over seven years total $90.3 million. […] Reduced overtime spending over the last five years [has fallen] to $30.9 million in FY 2011.” It also claims that collective bargaining wages did rise during that time, although amount of rise is unspecified.
The State House News Service reported on Jan.31, 2012 that Boston Mayor Thomas Menino wrote a letter to Transportation Secretary Richard Davey, in which Menino said, “I am eager to work with you, Governor Patrick and the legislature to identify solutions that will address the long-term fiscal deficit at the MBTA […] We are in desperate need of a dedicated revenue source and immediate action is needed to identify sustainable funding for the MBTA.”
The News Service also reported that “There’s no momentum currently on Beacon Hill behind any alternative to the fare hikes and Governor Patrick, while acknowledging the need for a broader transportation financing plan, has not offered one.”
How did the MBTA end up in so much debt?
In 2000, in an effort to bring the MBTA’s mounting debt under control, the state legislature passed the Forward Funding Act, by which the T inherited $3.6 billion in outstanding transit debt from the state.
Moreover, the Forward Funding Act dedicated 20 percent of the state’s sales tax revenue to the MBTA. At the time the Act was passed, legislators expected sales tax revenue to grow by 3 percent annually, according to a Feb. 2011 article published by Boston Magazine.com. However, the sales tax revenue only increased one percent per year since 2000. The plan did not account for rising costs in fuel and energy.
Almost fifty percent of the MBTA’s operating budget comes from sales tax revenue.
