MBTA balances costs, revenues for first time in a decade
Wages, benefits drop by $10m; Keolis hit with $10m in penalties
THE MBTA REVEALED on Monday that its revenues during the year ending June 30 were enough to cover the transit agency’s operating expenses and debt service, the first time that has happened in a decade.
Michael Abramo, the T’s chief administrator, said the balanced budget represented a major accomplishment for the transit agency. He said it showed the T was capable of holding the line on spending even as it increased revenues. Even more important, Abramo said, the balanced budget allowed the T to invest more money in badly needed capital projects that will allow the T to provide better service in the future.
Each year, the Legislature appropriates an additional $187 million to the T to cover its operating deficits. In fiscal 2017, the T used $30 million of that money and pumped the rest into capital projects. In fiscal 2018, which ended June 30, the T didn’t touch any of the legislative appropriation, which allowed all of it to go for capital projects. Over the last three years, Abramo said, more than $500 million from the annual legislative appropriations has gone for capital projects.
It’s unclear how long the T can continue to balance its budget. The T is currently projecting a $36.5 million deficit for fiscal 2019 and the agency is facing increasing pressure to hire more people and expand service. For example, 55 new bus drivers are expected to be hired this year.
In fiscal 2018, total revenue increased $90 million, or 5 percent, over the previous year, while operating expenses and debt service increased $60 million, or about 3 percent.
On the revenue side, the big increases were in own-source revenue (up $31.5 million, or 55.6 percent) and a category called other income (up $39.5 million, or 74 percent). Among own-source revenues, real estate was up $6 million, or 53 percent; parking rose $5 million, or 18 percent; and advertising income increased $8 million, or 48 percent.In the category of other income, the biggest increase was from penalties assessed on Keolis Commuter Services, which runs the commuter rail system for the MBTA. The penalties totaled $10 million, according to Abramo’s briefing presentation.
On the expense side, wages and benefits fell by $10 million, or 1.3 percent, while most other costs rose, with debt service going up $44 million, or 10 percent, and commuter rail costs rising by $9 million, or 2.4 percent.