T board chair doubtful on cutting or eliminating fares

WITH MBTA officials projecting steadily rising budget deficits over the next five years, the chair of the transit authority’s board on Thursday put a damper on talk of reducing or eliminating fares and raised the prospect of increasing them.

“Without a fare increase over this five-year period, I have a serious problem,” said Betsy Taylor, the chair of the MBTA board. “I know there are many people that would like us to consider reducing certain fares as opposed to increasing them, and I think this points out that if we were to consider that we very much need to hear proposals, hopefully from the same people, on what revenues might offset any such decreases. There clearly is a lack of revenue here.”

At a subcommittee meeting of the full board, Taylor and two of her fellow board members also heard a presentation on what procedures the T would need to follow in order to raise fares. Lynsey Heffernan, the T’s assistant general manager for policy and transit planning, who delivered the presentation, said she would be returning sometime in the near future to talk about actual fare changes. She did not specify what type of changes she would be proposing.

The tone of Taylor and her fellow board members was markedly different from the previous T oversight board — the Fiscal and Management Control Board. The old board in its final year was pushing for additional revenue from the Legislature for the board’s priorities, including adjusting fares based on the income level of the rider. Taylor, by contrast, on Thursday seemed intent on having the T live within its existing revenues. The issue of fares based on the income level of the rider has not come up yet, even though the old board had set plans in motion to have the new board set up a pilot project in October to test the idea.

The Fiscal and Management Control Board used to hold meetings roughly twice a month to address T business, but the new MBTA board so far has been meeting once a month and leaving other business to subcommittees of the full board. On Thursday, the finance and audit subcommittee heard presentations on the T’s tentative five-year budget forecast.

Mary Ann O’Hara, the T’s chief financial officer, outlined five-year budget projections that used three different scenarios for ridership and relied on hundreds of millions of dollars in one-time revenues in the early years from federal money set aside for future use. The projections also included a $500 million transfer from the operating budget to the capital budget.

Under the most optimistic scenario for ridership, O’Hara said the T’s budget would remain balanced through fiscal 2024 before slipping into the red in fiscal 2025 and ending up with a $341 million deficit in fiscal 2027. Under the most pessimistic scenario for ridership, the T’s budget would dip into the red in fiscal 2023 and end up $551 million in the red in fiscal 2027.

The middle-of-the-road scenario, the one the T is currently planning to use, would see the budget dip into the red in fiscal 2024 and steadily rise to a deficit of $471 million in fiscal 2027.

Under all three scenarios, fare revenue would not return to 2019 pre-COVID levels by fiscal 2027.

Taylor and her fellow board members, Mary Beth Mello and Scott Darling, all raised concerns about transferring $500 million to the capital budget at a time when the operating budget is facing rising shortfalls.

Jay Neider, the T’s chief of capital programs, urged the board to support the transfer because the money would be used to meet match requirements for funds that will soon become available under the recently passed federal infrastructure law. He said some of the matching funds are needed to take advantage of direct federal grants to Massachusetts and some are needed to compete for grants that are competitively awarded.

“If we don’t have the match for the federal funds, we can’t spend the federal funds,” he said.