MBTA deficit solutions too narrow in scope

Investments in the T are investments in economy

Discussion about the MBTA’s proposal to implement fare hikes and service cuts to meet a $160 million dollar budget shortfall has, until Boston Mayor Tom  Menino’s recent letter to Secretary of Transportation Richard Davey, been much too limited in scope.  The T is a critical piece of the transportation infrastructure of Massachusetts, and it threatens our economic well-being to talk only of how much of this infrastructure should be cut back, and how much the remaining ridership should pay in fare increases.

The mayor rightly draws attention to the economic (as well as the human) impacts in his recent letter to the secretary.  As stewards of the Commonwealth’s economy, the governor and Legislature should carefully consider his observations before deciding what public investment is merited in light of the T’s budget gap.

From 2009 until recently, I was a member of the senior leadership team at MassDOT.  When periodically the notion arose in staff meetings that T service cuts might be inevitable, I would sometimes counter-propose that perhaps we should also save money on the highway side by closing Interstate 93 on weekends.  Or perhaps we should just not plow 128 this winter – think how much money we could save!

Initial amusement was followed by looks of disbelief or concern with my sanity, but eventually the point was usually taken – the impact of doing what I suggested was unthinkable.  Roads would be paralyzed with commuters not getting to work, cars idling in traffic jams, polluting the air, wasting gasoline,  and time. It seems obvious that even public discussion of closing down transportation infrastructure on that scale would have a detrimental effect on the region’s economy.  Businesses thinking of expanding or relocating here, or individuals thinking of taking a job in the area, would now have reason to hesitate.  Operating and maintaining the Commonwealth’s highways, bridges, and airports is not a luxury; it is an investment in the economic health and quality of life in the Commonwealth.  So it is with the T, and it is time we started acting like it.

Economists like to talk in terms of positive and negative “externalities.”  And we have all become accustomed to hearing public transit advocates talk about some of these, such as the positive environmental, health, and energy effects of getting cars off of the road.  But the positive externalities generated by the T are not limited to things loved by liberals alone. To take the liberty of quoting former President Clinton:  “It’s the economy, stupid.”  One need only look at the explosion of activity in the Seaport District, supported by the Silver Line expansion, for an obvious example of the positive economic externalities generated by a recent investment in public transportation.

Perhaps the problem is that none of the economic benefits realized by operating, or expanding, the T ever appear on its own ledger; in fact it is quite the opposite.   As the inside joke goes:  “The T loses money on every ride, but they make up for it in volume.”

Until we recognize in an explicit and consequential way that the T’s operation, maintenance, and expansion are as important to our economic well-being as our electric, water and sewer, and life-safety infrastructure, as well as the other parts of our transportation infrastructure such as our roads, bridges, and airports, we are doomed to go around and around in this debate about public transportation in an ever-accelerating “death spiral.”  This issue is, coincidentally, a preview of the debate that will be front and center during the coming presidential race, and President Obama is already teeing it up, on a much larger scale.

There are mechanisms to “value capture” the increased tax and other revenues generated by publicly funded infrastructure, such as tax increment financing.  Over the long term, these could be applied to public transportation to recognize the full economic impact created by the T and thereby  ensure that the T receives funding that accurately reflects its impact on the region’s economy.  But the current crisis is too urgent, and implementing this type of global solution cannot avert it in time.

We delude ourselves into thinking that we “can’t afford” to invest public funds in public transportation.  The truth is we “can’t afford” not to.  I know $160 million  sounds like a lot of money.  But Greater Boston is the sixth largest economy in the country and the 12th -largest in the world.  If we proceed with disinvesting in the T, or other critical parts of the infrastructure that supports the economy, we will have, sadly, been the agents of our own economic contraction.

Meet the Author

Peter O'Connor

Lawyer and economic development consultant, Self-employed
Peter O’Connor served as the Deputy Secretary for Real Estate and Economic Development in the Executive Office of Transportation, and later as a member of the senior staff at MassDOT.  He can be reached at peteroconnorboston@gmail.com.