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 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.”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.
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.