Large Fare Increases, Service Reductions, Or Greater Debt Are Options to Close Budget Deficits in Coming Fiscal Years
Read the Report.
Boston—The
Massachusetts Bay Transportation Authority (MBTA) faces a number of
“unhealthy choices” to close an estimated five year budget deficit of
between $357 million and $438 million, according to research by the
Massachusetts Public Interest Research Group (MASSPIRG).
Largely
caused by an $8.1 billion debt with interest, the MBTA will be forced
to dramatically increase fares, cut service, or borrow more money to
close annual budget gaps if state lawmakers do not address the MBTA’s
massive debt burden, says MASSPIRG.
The projections are based
on MBTA budget figures from the Transportation Finance Commission
(TFC), which released a report in March documenting a $15 - $19 billion
funding gap across all of Massachusetts’ transportation agencies over
the next twenty years. The TFC calculated several sets of figures to
account for different variables that can alter the budget calculation;
basing the most accurate MBTA budget projections on the best
revenue/worst cost and worst revenue/best cost scenarios over the
twenty-year projection.
“These budget gap numbers paint a bleak
picture,” said MASSPIRG Consumer Advocate Eric Bourassa. “The options
available to the T to close the deficits—higher fares, less service, or
a greater debt—would without a doubt negatively impact ridership.”
The
report outlines that fare hikes and service reductions reduce transit
ridership. And that many commuters not taking the T will likely drive
instead.
“The consequences of more fare increases, or even
service cuts, would be worse traffic congestion and air pollution, and
greater stress on our already deteriorating roads and bridges,”
continued Bourassa.
According to the report, entitled Derailed
by Debt: Unhealthy Choices the MBTA Will Be Forced to Make in FY2009 –
FY2013, the MBTA has three primary options to close these budget gaps:
1. Fare Increase
Fares
would have to increase by at least 38 percent over the five-year projection to
close the gaps. To illustrate, that percentage increase would translate
into raising a single ride subway fare by $.65 over five years from
$1.70 to $2.35 on a CharlieCard or $2.00 to $2.75 for rides taken with
a CharlieTicket. The Link Pass would increase from $59.00 to $81.00 a
month. A commuter rail Zone 4 pass holder would see an increase from
$186.00 to $257.00 a month over the same five-year period.
2. Service Cuts
If
the MBTA chooses not to increase fares, another option for closing its
budget gap would be to enact several service decreases in order to
reduce costs. Prior to the 2007 fare increase, the MBTA broadly
categorized the types of service decreases riders would experience in
order to obtain the same $70 million in projected gains from that
year’s fare increase in its draft impact analysis. These include:
- 50 percent reduction in bus and rapid transit service after 9 p.m. weekdays and all day on weekends
- Reduction of up to 20 bus routes, focusing on those losing the most money
- Elimination of 50 percent of Commuter Rail service after 9 p.m. and 50 percent of service all day on weekends
- Increase peak rapid transit headways by removing one train set from each time period before 9pm on weekdays.
- Elimination of The RIDE service in towns not mandated by law
- Elimination
of Suburban Transportation Program, which provides partial funding for
local municipal bus services in seven suburbs and the Mission Hill Link
bus.
According to the impact analysis prepared by
Central Transportation Planning Staff (CTPS) on May 10, 2006, these
measures would lead to an annual 18 million loss of ridership.
3. More Borrowing
The
third option presented in the report is more borrowing by the MBTA,
pushing off debt payments into the future and therefore increasing the
agency’s $8.1 billion debt in the long run. Currently, annual debt
service payments represent about 28 percent of the T’s operating budget, with
payments ranging from $436 million to $504 million over the five-year
projection.
On Tuesday, MASSPIRG delivered the report to
Governor Patrick’s office in the State House, and called on the
administration to make the MBTA’s financial troubles a top priority.
MASSPIRG
points to the MBTA’s massive debt burden, the largest in the nation for
transit agencies, as the T’s core financial problem. Since $1.8 billion
of the MBTA’s debt has come from transit expansion and improvement
projects associated with the Big Dig, MASSPIRG is advocating that the
MBTA be relieved of this debt. MASSPIRG echoes the recommendation of
the state’s Transportation Finance Commission, which included relieving
the debt associated with Central Artery/Tunnel commitments.
“It’s
not fair that the MBTA is suffering because of projects the Authority
was forced to pay for as a part of Big Dig air pollution mitigation,”
said Bourassa. “The state should have factored in and budgeted for the
environmental and public health impacts of the Big Dig, and not dumped
those costs on the T and T riders.”
In January a number of state
lawmakers, including Representatives Alice Wolf (Cambridge) and Carl
Sciortino (Somerville), filed legislation to relieve the MBTA of a
large portion of the agency’s debt.
“The T is vital for the
culture, economy, and life of Boston,” said Representative Sciortino.
“Relieving the T of a portion of its debt will go a long way towards
assuring that our residents and visitors have a public transportation
system that reliably meets their needs.”
Echoing this sentiment
Representative Wolf said, “Public transportation is essential to the
Commonwealth. The newly released report clearly shows that unless we
relieve the MBTA of some debt, ridership will decrease, fares will
increases, and service will further deteriorate. It is imperative that
we act now to save our public transportation.”
