T control board’s annual report calls for new revenues
Raises alarm on pension, debt costs, backs means-test fares
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THE MBTA’S Fiscal and Management Control Board sent a 10-page annual report to the Legislature on Monday that is fact-based and largely straightforward with its updates on major initiatives and its appeals for more revenue, continued transparency, and means-tested fares.
Brian Lang, a member of the control board, said he liked the report, the sixth issued since the board was created in 2015. “It’s taken us six tries to get one concise enough that people will actually read it,” he said.
There aren’t a lot of editorial comments in the report, but it nevertheless takes issue with a number of stances taken by Gov. Charlie Baker, who appointed all of the control board’s members.
The report bluntly states that the current funding structure of the MBTA needs to be adjusted to deal with soaring pension and debt service costs.
The control board also confirmed what many budget analysts are saying — that the MBTA’s capital spending program is threatened by rising debt service costs, which are paid out of the T’s operating budget. In other words, the interest the T is paying on the money it has borrowed is eating up a larger and larger share of the transit authority’s operating budget, forcing the agency to choose between sought-after capital projects for the future or keeping trains running now.
Interest costs currently represent 23 percent of the T’s operating budget, a percentage the board says is likely to rise as federal and state funding sources dry up.
“We recommend that new state, federal, and other sources of dedicated revenue be found for capital improvements which will mitigate the MBTA’s debt service burden. This will allow the MBTA to continue and accelerate our aggressive capital program which is key to modernizing the MBTA, supports the Commonwealth reaching our climate goals, and allows the MBTA to offer increasingly better service at affordable fares,” the report said.
The segment of the report dealing with means-tested fares was interesting as much for what it didn’t say as what it said. The report said the control board was pleased the Legislature acknowledged in its transportation bond bill the need for means-tested fares (fares tied to the income level of riders) and a funding source to pay for them.
The report did not mention that Baker vetoed the means-tested fare provision in the transportation bond bill and that he also vetoed a potential funding source – new fees on Uber and Lyft rides capable of raising upwards of $55 million. The control board’s annual report pegged the cost for means-tested fares at $40 to $55 million, plus additional money for operating costs.
The report also recommended setting the number of required meetings at 18 per year rather than the current 36. Last year, the board recommended holding a minimum of 15 meetings each year.