Poftak pushes feds for $32b for transit agencies

WITH FINANCIAL CHALLENGES mounting at the MBTA, General Manager Steve Poftak joined transportation officials from across the country on Tuesday to press Congress to pass a stimulus package containing $32 billion of financial aid for the nation’s transit authorities.

The amount is more than the $25 billion the agencies received under the earlier CARES Act and far more than the $15.75 billion the House included in a stimulus package that is currently sitting dormant on Capitol Hill. A $32 billion package could be worth $1 billion to the MBTA.

At a virtual press conference organized by the American Public Transportation Association, transit officials from Phoenix, Denver, Maryland and elsewhere said they were already laying off workers and cutting services, while the T is only beginning discussions on how to deal with an expected $300 to $600 million shortfall expected to show up in mid-2021. Poftak said the T will likely have to curtail its capital spending and cut services, actions that he said will impact employees and third-party vendors in the long run.

Poftak and other T officials have not mentioned layoffs or furloughs during budget discussions so far, but the general manager has said everything is on the table. “None of us got into this business to take service away from people,” Poftak said.

Even as Poftak pressed for more federal funds, the Massachusetts Taxpayers Foundation issued the second of three planned reports on MBTA finances. The first report, released in June, said the T was spending more on operations than it was taking in and was facing an “existential crisis” with the downturn in ridership precipitated by COVID-19. Federal relief funds totaling $827 million helped balance the T’s fiscal 2020 and 2021 budgets, but those funds are now spoken for and no more money is on the way.

The second report suggests the authority’s success over the last few years in addressing long-standing maintenance and modernization needs may come to a halt in four years. The report describes an “impending chasm” between the billions of dollars needed to bring the transit authority’s assets into a state of good repair and the money to fund that work. The report suggests the chasm may even be deeper than it appears because the T has failed to account for substantial costs to decarbonize its operations and to protect its network from the effects of climate change.

“This steep dropoff in capital resources poses a potentially devastating outcome for public transit,” said the Taxpayers Foundation report.

To preserve money for the maintenance of existing core assets, the report recommends deferring or canceling many capital projects that are either planned or already on the drawing boards. Many of the projects already have a strong base of support.

New Red and Orange Line cars will be purchased, but the Taxpayers Foundation report said initiatives to achieve service levels every 3 to 4 ½ minutes could go, at least for now. So could proposals for a new West Station as part of the Allston I-90 makeover; a subway connection between the Red and Blue Lines; an expansion of track capacity at South Station; a transformation of the commuter rail network to electrify it and provide more frequent service; expanded service to Worcester, Springfield, Greenfield, the Berskhires, and Cape Cod; and the so-called phase two of the South Coast Rail project to New Bedford and Fall River.

The Taxpayers Foundation report suggests the capital spending program needs to change to accommodate changing work and travel patterns. “What drove the demand for travel before the pandemic – real estate usage, health care services, education, business conferences, and tourism – may not drive future transportation needs,” the report said.

For years, the T balanced its operating budget by deferring maintenance, which turned into a major problem as many of its assets were allowed to deteriorate. The estimated backlog in maintenance spending grew from $2.7 billion in 2010 to $10 billion in 2018. Over the last several years, the T has upped capital spending dramatically ($8.3 billion is slated to be spent between fiscal 2020 and fiscal 2024) and cut the time to bring the system into a state of good repair from 25 to 15 years.

Now all that progress is in danger as available money for capital spending is likely to drop dramatically, falling from an estimated $1.8 billion in fiscal 2024 to $800 million in fiscal 2025 and $600 million in fiscal 2026, according to the Taxpayers Foundation.

MBTA officials did not dispute the conclusions in the Taxpayers Foundation report but they noted the Legislature is currently considering an $18 billion transportation bond bill with a host of authorizations – but no additional money – for spending using borrowed funds. The Baker administration is also working with other states to assess a carbon fee on vehicle fuels to raise money for transportation and climate initiatives.

With the T’s situation deteriorating, it’s no wonder that Poftak is looking to the federal government for help. If Congress and President Trump were to agree to a stimulus plan including $32 billion for transit authorities, the T’s share, assuming it receives the same percentage that it did under the CARES Act, would be just over $1 billion.

Transit officials on Tuesday said the situation is dire. Paul Ballard, the CEO and general manager of the Denver Regional Transportation District, said his agency is facing a deficit of $166 million in 2021. “This translates into a lot of negatives,” he said, referring to a number of cutbacks, including the layoffs of 550 employees. “In my 40 years as a transit CEO, I’ve never seen anything like this,” he said.