MBTA Control Board lays out ‘tough choices’

‘Unpopular, even painful’ decisions ahead

The MBTA Fiscal Management and Control Board outlined the steps that the MBTA needs to take to stabilize its finances and operations in its first annual report released Tuesday.

The report is an exhaustive summary of previously released data points and stopped short of advocating that specific recommendations be set in motion. Instead, the board laid out a complex but familiar menu of “tough choices” for state lawmakers and the general public to pick through. The control board did not request additional state assistance; instead, it called on the authority to look “inward at its own costs.”

The MBTA remains trapped in a fiscal quagmire with a $242 million operating deficit for fiscal 2017; operating expenses that continue to increase while ridership remains flat; and a debt burden that is the highest in the country, just for starters.

The board’s five members – Joseph Aiello, Lisa Calise, Brian Lang, Steve Poftak, and Monica Tibbits-Nutt – cautioned that the responsibility for regaining its financial footing rested with MBTA. They proposed 27 separate fare “revenue and cost options,” including fare increases, previously negotiated union wage give-backs, and service cuts. The group stressed that these measures would be “unpopular or even painful.”

The board’s plan to use a “significant” portion of funds destined for operating expenses for capital improvements, such as switch and signal upgrades that the rail network needs, along with a push to improve fare collecting capabilities with upgraded automated equipment, has recast the conversation surrounding how the agency can improve without further infusions of state funding.

The controversial proposal to raise fares more than 5 percent has stoked public anger, particularly among commuter rail riders who have long complained about haphazard fare collection. Keolis has hired additional staff to address those concerns, but fare recovery remains a pressing issue throughout the MBTA network.

The current automated fare collection system used on buses, subway, and trolleys is almost a decade old and is hampering fare collection efforts, according to the report. The board identified a complete overhaul as an “urgent technology priority,” one that would allow the MBTA to consider structuring fares by other means, such as distance traveled. The authority may also consider contracting out fare collection management, which currently carries a price tag of $30 million.

Debt service costs ate up $452 million, or 30 percent, of MBTA annual operating budget in fiscal 2016. Interestingly, in a nod to those transit advocates who would like to see the Legislature absolve the T of at least a portion of its debt, the board noted that if Big Debt and the debt that the MBTA assumed when the Legislature inaugurated forward funding were eliminated, the authority’s structural deficit would drop to $288 million by 2020. Right now, that deficit is currently forecasted to reach nearly $430 million.

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Gabrielle Gurley

Senior Associate Editor, CommonWealth

About Gabrielle Gurley

Gabrielle covers several beats, including mass transit, municipal government, child welfare, and energy and the environment. Her recent articles have explored municipal hiring practices in Pittsfield, public defender pay, and medical marijuana, and she has won several national journalism awards for her work. Prior to coming to CommonWealth in 2005, Gabrielle wrote for the State House News Service, The Boston Globe, and other publications. She launched her media career in broadcast journalism with C-SPAN in Washington, DC. The Philadelphia native holds degrees from Boston College and Georgetown University.

About Gabrielle Gurley

Gabrielle covers several beats, including mass transit, municipal government, child welfare, and energy and the environment. Her recent articles have explored municipal hiring practices in Pittsfield, public defender pay, and medical marijuana, and she has won several national journalism awards for her work. Prior to coming to CommonWealth in 2005, Gabrielle wrote for the State House News Service, The Boston Globe, and other publications. She launched her media career in broadcast journalism with C-SPAN in Washington, DC. The Philadelphia native holds degrees from Boston College and Georgetown University.

On the capital investment side of the ledger, putting a spit shine on the MBTA by spending $765 million annually to reduce the state of good repair backlog has grown in importance, especially since the Green Line extension fiasco has put a damper on expansion conversations. Some transit advocates have called on the MBTA to suspend fare increases until service improves—which the authority cannot really do until it sinks hundreds of millions into the network.

With the exception of Red and Orange Line cars, which are already on order, and the federally mandated positive train control systems that the MBTA must install, no other expansion projects were discussed at length in the report.