Baker to T: Cut spending but not service
Says agency can use extra state funds to cover any deficit
GOV. CHARLIE BAKER said on Tuesday that MBTA officials should continue to search for savings at the agency, but he indicated he didn’t want spending cuts to disrupt service.
The governor also eased some of the financial pressure on the T, saying the agency could use some of the so-called contract assistance money provided by the state to balance next year’s budget and avoid severe spending cuts. The comments by the governor, who is up for reelection next year, appeared to defuse growing opposition to commuter rail and paratransit spending cuts proposed by the MBTA.
The T has three main revenue sources. It receives roughly $1 billion from the state sales tax; generates revenue from fares, advertising, and real estate transactions; and collects another $187 million in extra contract assistance out of the state budget. The T has been trying to balance its budget without tapping the contract assistance so the $187 million could be plowed into longer-term capital investments in the system.
The T is expected to come up $50 million short in the current fiscal year, which ends June 30. A week ago T officials proposed a series of measures to balance the fiscal 2018 budget by paring back spending or increasing revenues by close to $47 million, but on Monday Baker took a $10 million item – the elimination of weekend commuter rail service – off the table. On Tuesday, he also hinted that a proposed $7 million cutback in RIDE paratransit service might be scaled back as well.
The governor said it would probably be OK if the T again used part of its contract assistance money to balance the fiscal 2018 budget. “If you said to me does [a balanced budget] have to be done for fiscal ‘18, I would say the Legislature is going to want to continue to see progress there,” he said. “Whether you have to get all the way there by ‘18 or not, there’s probably some latitude there.”
MBTA officials have acknowledged there is some flexibility, but they have also insisted that state law requires them to balance the budget.
Brian Lang, a member of the control board, welcomed Baker’s comments. “I agree with the governor and have held this view all along,” he said in an email.
The control board has indicated it may not go along with the push for a balanced budget in fiscal 2018. Board members at a recent meeting asked the T to come back with an analysis of what would happen if the agency ran annual deficits of $20 million and $42 million. At Monday’s meeting, T officials said a recurring $20 million deficit with annual spending growth of just 1.9 percent would mean $103 million less would be available for capital investments over the next five years. At $42 million, $217 million less would be available for investment in the T, assuming the same 1.9 percent rate of spending growth.Baker said he liked the way the MBTA allowed paratransit customers to use Uber and Lyft, which cut the T’s costs while providing paratransit riders with better door-to-door service. Most of the state’s savings, however, were gobbled up by paratransit riders using the service more often.
Baker urged T officials to keep looking for savings. “In this particular case, they should put their heads together and come up with a way, or a set of ways, to continue to provide the service but do it in a more cost effective way so that we and they can continue to invest in the infrastructure,” he said. “They need to think a little bit harder to get from here to there.”