MBTA treading in uncertain waters

TO HELP WITH THE STATE’S reopening, the MBTA is preparing to restore service to pre-COVID levels to accommodate social distancing but does not expect to see large numbers of riders return to the transit system any time soon.

“We’re not expecting a big influx of customers,” Transportation Secretary Stephanie Pollack said on Monday at a meeting of the T’s Fiscal and Management Control Board. “That’s what social distancing means for the MBTA.”

Currently, ridership is down 80 percent on the T’s bus system and 92 percent on its subway system.

Faced with a tremendous amount of budget uncertainty, members of the control board raised concerns on Monday that a preliminary budget plan for fiscal 2021 could leave the transit authority facing a massive shortfall in fiscal 2022.

The T intends to use $250 million of federal funds to balance its fiscal 2020 budget, which ends June 30. The T has another $577 million in federal funding in hand to help balance the fiscal 2021 budget, but there is concern on the Fiscal and Management Control Board that without radical changes to the way the agency operates the T could be left with a large structural deficit in fiscal 2022.

“You can’t count on a federal bailout of this organization in fiscal 2022,” said board member Brian Shortsleeve. He predicted the T could face a “gigantic hole” of $300 to $400 million unless it radically changes the way the organization operates.

David Panagore, the T’s chief administrative officer, said he agreed with Shortsleeve’s assessment but indicated any major adjustments could be made this fall, at the latest by November.

Panagore is currently projecting that monthly fare revenue, which is currently hovering around $3 million amid a dramatic downturn in ridership, will double to roughly $6 million a month for the second half of this year before slowly starting to rebound in January. He projects fare revenue will rise to $11 million in January and continue upward to $37 million in June 2021. Pre-COVID-19, fare revenue was averaging $59 million a month.

Overall, revenue at the T is expected to fall to $1.65 billion in fiscal 2021, down about $716 million compared to what the agency had been forecasting as recently as March.  The $577 million in federal funds should help close the gap, but a shortfall will remain of roughly $139 million.

The T is currently planning no increase in fares and no layoffs or furloughs of workers. The T is also planning to use all of an expected $127 million legislative appropriation to fund operating expenses; in previous years, the bulk of those funds went for capital projects. The T is also moving ahead with previously announced plans to allow free transfers on the Fairmount commuter rail line.

To help close the funding gap, the T is examining a series of scenarios that would delay spending on its safety initiatives and cut back or eliminate funding in fiscal 2021 for new rail, bus, and fare collection initiatives.

The T is seeking legislative approval of a proposal that would allow the transit authority to use bond funds to pay for the salaries of employees working on capital projects, which would free up an estimated $66 million.

Steve Poftak, the T’s general manager, described the roughed-out budget plan as “plausible to pessimistic,” one designed to guard against the need to make spending cuts mid-year.

The T normally develops a five-year capital spending plan each year, but this year, because of all the uncertainty, the plan is to develop only a one-year plan.

The control board is expected to vote on its fiscal 2021 budget next Monday, solicit feedback from the MBTA Advisory Board, and then take a final vote on May 21.