What Exactly is the MBTA's 'Big Dig Debt'?
The back-and-forth over the MBTA finances has seen a great deal of attention to the MBTA’s $5.2 billion in debt. A portion of that debt has been tagged with the nearly toxic label ‘Big Dig Debt’, and it’s important to be precise about what that actually means.
The MBTA’s debt comes from three sources — $1.85 billion from spending since the 2000 start of forward funding, $1.65 billion that was transferred to the MBTA under forward funding and was related to previous transit projects, and $1.7 billion in funding for projects mandated under a Big Dig-related agreement. (N.B. All above figures are from the MBTA Advisory Board’s Budget and Fiscal Analyst Brian Kane’s invaluable Born Broke report. Kane, of course, shouldn’t be held responsible for the opinions in this blog.)
It’s also important to define what that $1.7 billion was spent on. The projects were agreed to in 1990 by the Sec’y of Transportation and the Conservation Law Foundation (see Exhibit A here) and have ‘evolved’ over time.
The key point is that despite the moniker “Big Dig Debt,” all of these projects directly relate to transit expansion or improvements like extending the commuter rail on the South Shore and to Worcester, adding parking spaces, building out the Fairmount Line — not roadways and, certainly, not the Big Dig. They came about as a result of an agreement that had to be signed in order for the environmental permitting around the Big Dig to take place. Some suggest that another driver behind the signing was to lock in a commitment to transit expansion and that the air quality justification for the agreement was flawed.
The state has now said it will fund future MBTA expansion and has started to put some money on the table. But, unless they take some things out of the existing state capital plan, the state has limited ability to finance major projects. Not to mention, the state has no capacity to take debt off of the MBTA unless they come up with a new revenue stream or breach their current debt affordability standards.
Part of the conversation around the MBTA — and transportation finance, more generally— should be how to fund the debt. But let’s at least be clear about what the ‘Big Dig Debt’ funded: Transit expansion and improvement, not roadways.