2017 MBTA Budget Shrinks Deficit, Creates Repair Fund

The MBTA’s board approved a new budget they hope will satisfy commuters unhappy with the upcoming fare hike.

Charlie Card for the MBTA Photo by Garrett Quinn

Charlie Card for the MBTA Photo by Garrett Quinn

Anyone who rides the MBTA knows it has many problems. From creaky old trains that fail with regularity to new stations that leak not long after they open to a long delayed extension of the Green Line, Boston’s public transportation system suffers from decades of systematic neglect and mismanagement. One of the causes of this neglect is the MBTA’s crushing debt burden from the Big Dig, a massive expense that eats up nearly a quarter of the agency’s budget.

On Monday, the MBTA’s Fiscal and Management Control Board unanimously approved a new $2.02 billion budget that closes its existing budget deficit by 15 percent to $80 million while addressing some of the agency’s debt burden. On its face, this doesn’t seem like much, but in practice it’s like turning the Titanic around: Just two years ago, the MBTA’s budget deficit was $242 million. Fixing the MBTA will not be accomplished in a month or a year, but they are making some progress. During the budget review process, the MBTA’s Advisory Board concluded that this was the “easy year” for a financial turnaround expected to take 3-5 years.

The MBTA’s new budget for the coming fiscal year benefitted greatly from the combination of a controversial fare hike, higher sales tax revenues, a collapse in fuel prices, and tighter management of the agency’s finances. The MBTA will receive approximately $187 million in additional funding from the state this year, but the uses of those funds are limited primarily to paying down the authority’s huge debt and transferring employees to its operating budget.

“This is the year you get the low hanging fruit. Your challenge is going to get even more severe,” said Paul Regan, executive director of the Advisory Board during a presentation before the FMCB.

Regan said the agency needs to evaluate the wages and benefits of employees, create flexibility with the contracts it issues, review external vendors, reevaluate ways to find cost savings on services with low ridership, and develop a strategy to extract additional revenues from parking facilities.

FMBC member Brian Lang pushed back against the part of Regan’s presentation that described MBTA operators as having the highest wages in the country. Lang, the president of Local 26, a hospitality union, said the MBTA needs a less confrontational approach for working with unions if it is serious about turning the agency around.

“We need to have a strategy that is going to work and it has got to be different from the approach the T has taken and the unions have taken for the last umpteen decades,” said Lang.

The new budget also creates what’s known as a “pay-go capital” fund that will immediately address overdue maintenance issues like signals and power systems that are badly in need of an overhaul. The new fund, they hope, will directly address many of the agency’s pressing infrastrucuture problems while giving MBTA riders an improvement in service quickly.