Debate over new T revenues coming

Advisory board urges land transfer tax, shifting ferry operations to Massport

THE MBTA OVERSIGHT BOARD on Monday unanimously approved a $2 billion budget for the coming fiscal year and indicated it would tackle the issue of whether the T needs a new source of revenue later this year, probably after the election.

The issue of new revenues has been simmering for several years, but it appears the Fiscal and Management Control Board is now preparing to address it. Joe Aiello, the chairman of the board, said he would like to have a legislative proposal ready by the end of this year.

Paul Regan, the executive director of the MBTA Advisory Board, which represents the 176 communities in the T’s service area, said the transit authority needs new revenue to fund the services it currently provides and the services it wants to add in the future. He urged the control board to pursue revenue measures that play off the benefits provided by the T, such as a land transfer tax that would capture the increased value of property near T facilities.

A March 29 report prepared by the advisory board said the T doesn’t have the revenue it needs to operate for the long term. “No amount of management can change the fact that, to a large extent, costs of fringe, labor, and contracted services are beyond the control of the board,” the report said. “Growth in these areas will outstrip the dedicated revenue streams forcing regular fare increases that barely keep the authority afloat. All while customers are clamoring for expanded or additional service, and communities need reliable transit to assist with their economic development and housing growth.”

Regan said the timing is good for developing a new revenue stream because the T has brought its spending under control. “These deficits for the next couple of years are going to be relatively small, but the pressure is going to grow,” he said. “For all the progress they’ve made, five years from now we might be right back where we were, with $40 million, $50 million, or $60 million deficits because the deficit is structural.”

The MBTA Advisory Board also recommended that the T offload its ferry service operations to Massport. “It belongs with the agency that controls the port of Boston,” Regan said.

Regan also pushed for family fares at off-peak times, with anyone 16 or under riding for free. The T has been considering dynamic pricing, but has made no decisions yet.

Before addressing the revenue question, Aiello said the control board will first have to sort out how the T should be governed in the long run. The control board was established in July 2015 and is scheduled to go out of existence in 2020.

The approved MBTA budget for the year beginning July 1 is balanced using a number of fairly vague revenue and cost-saving initiatives. For example, the T is counting on $30 million in savings from unspecified efficiency initiatives. It is also counting on $7 million from new parking revenues and $8 million from a revamp of the corporate pass program, but the details of both initiatives haven’t been announced yet.

Evan Rowe, the T’s director of revenue, suggested fees already being collected on ride-hailing apps such as Uber and Lyft could be used to offset the need for some of the parking hikes. But board members were skeptical of the link between the ride-hailing apps and parking, with Monica Tibbits-Nutt calling the idea “insane.”

The T is expanding service in a number of areas, including the launch of Silver Line service between South Station and Chelsea ($5 million annual cost). The T is also launching three pilots, one for commuter rail service to Gillette Stadium in Foxborough ($1 million) and two for early morning and all-night bus service (a total of $3.5 million).

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Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Balancing the budget also relies on using $36.5 million of a $187 million legislative appropriation to cover operating expenses and winning legislative approval for using $27 million in capital funds to pay employees. State law bars the T from using capital funds to pay employee salaries, but the authority says an exception should be granted for high-level employees working on the Green Line extension and others working on capital projects.

Transportation Secretary Stephanie Pollack said lawmakers have expressed some concerns about using capital funds to pay employee salaries, but control board members said the financial arrangement makes sense as long as it is not overused.

Brian Lang, a member of the control board, said the Legislature needs to approve the use of capital funds to pay salaries or the T will be forced to raise revenue in other ways.  “It’s not a threat; it’s a fact,” he said. “If the Legislature doesn’t do that, it’s irresponsible on their part… I for one am going to raise holy hell if they don’t do it.”