Sanchez ups T appropriation by $27m

But doesn’t back paying workers with capital funds

THE HOUSE’S BUDGET CHIEF on Wednesday rejected a provision sought by the MBTA and Gov. Charlie Baker that would have spared the transit authority from taking a $27 million hit on its operating budget, but he made up for it by increasing the T’s legislative appropriation by a corresponding amount.

Rep. Jeffrey Sanchez, the chair of the House Ways and Means Committee, said at a briefing on his budget plan that he did not go along with the governor’s proposal to continue paying 200 employees with capital funds, which the T was counting on to balance its fiscal 2019 operating budget. But Sanchez neglected to mention that he upped the T’s legislative appropriation by $27 million, apparently to cover the payroll costs of the employees.

The Massachusetts Taxpayers Foundation brought the budget maneuver to CommonWealth’s attention after the magazine had already published a story suggesting Sanchez had thrown a wrench in the T’s budget plans. It was unclear why Sanchez didn’t mention the budget maneuver at his press briefing. Efforts to reach Sanchez’s office were unsuccessful.

A state law passed several years ago requires the MBTA to move all employees paid with capital funds on to the operating budget by the start of the next fiscal year. The T has moved more than 300 employees over to the operating budget, but has been seeking legislative approval to continue paying about 200 workers using capital funds (mostly federal or borrowed money). Without passage of the T legislation, the transit authority said it would need to move the salaries over to its operating budget and find $27 million in cuts or dip more into a legislative appropriation that the T’s Fiscal and Management Control Board has declared off-limits.

Sanchez said the House budget for fiscal 2019 did not include the MBTA provision because his committee wasn’t provided with sufficient backup information. “We felt that it was a broad-based request. We felt, given 2015 and our transportation reform plan that called for significant transparency, that we didn’t have enough from the administration to understand who those folks were. So we did not move forward on it,” Sanchez said.

Sanchez didn’t rule out supporting the T’s approach, but he didn’t sound very optimistic. “If we have the transparency and we’re clear, we’ll consider it,” he said. “But right now we didn’t feel we could move forward on that.”

Joe Pesaturo, a spokesman for the T, issued a statement saying the transit authority would continue pushing for its initiative. “The MBTA has transferred over 300 salaries worth nearly $30 million to the operating budget since fiscal year 2017 and looks forward to working with the Legislature to pay capital planning employees with capital dollars – a practice consistent with government accounting standards and with federal reporting requirements,” he said.

Andrew Bagley, vice president for policy and research at the Massachusetts Taxpayers Foundation, checked the actual House budget document and discovered that Sanchez had increased the T’s legislative appropriation by $27 million – boosting it from $127 million to $154 million – to allow the T to cover the cost of carrying all employees on its operating budget. (Another $60 million in capital funds is provided to the T out of state’s bond funds.)

The ban on paying workers out of capital funds arose because the T was paying large numbers of employees that way, and many of them had nothing to do with the capital projects. Many of the projects were also funded with federal or borrowed money, so in some cases the employee salaries also ran up interest costs for the T.

The T has not identified which employees it believes should continue to be paid out of capital funds, although a member of the Fiscal and Management Control Board said most of the employees are working on the Green Line extension to Somerville and Medford or working on capital delivery programs designed to bring the T into a state of good repair.

At its meeting earlier this week, members of the Fiscal and Management Control Board urged the Legislature to act quickly on the T’s proposal. Brian Lang, a member of the control board, said earlier this week that if the Legislature doesn’t pass the initiative 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.”

Meet the Author

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.

Meanwhile, the House budget provided no additional funds for 15 regional transit authorities, some of which are facing budget shortfalls requiring them to raise fares and cut service. In his budget proposal, Gov. Charlie Baker didn’t increase funding for the authorities beyond their existing $80 million appropriation, and Sanchez said he went along with the governor’s approach.

“Like so many other things, you’ve seen one RTA and you’ve seen one RTA,” he said, an apparent reference to the fact that not all the authorities are in the same financial situation. Authorities based in in Worcester, Pittsfield, and Springfield appear to be facing the biggest shortfalls and contemplating the biggest increases in fares and service cutbacks.

While the regional transit authorities are preparing for the worst, they do have a champion on Beacon Hill. Senate President Harriette Chandler of Worcester has made boosting funding for the regional transit authorities a priority.