T official: We’re good on revenues right now
Capital spending ramping up dramatically at transit agency
THE MBTA’S CHIEF ADMINISTRATOR said on Monday that the transit agency doesn’t need new revenues in the near term, but he said the situation could change in the future.
“In the current fiscal year, on the operating side and the five-year capital investment program, we do not need more money. We’re fully funded. Longer term, as we start to do that analysis in the 20-year plan, that may change. Currently, we are fully funded,” said Mike Abramo, the T’s chief administrator.
MBTA and Baker administration officials have been saying for years that it would make no sense to increase revenue support for the transit agency until it gets its fiscal house in order and is capable of spending the money it has.
At a press briefing on Monday, T officials indicated they may be nearing that point. They noted the T will come in under budget for fiscal 2018, which ended June 30, and they documented a dramatic increase in capital spending over the last five years. Spending on capital projects, including funding for new vehicles, facility upgrades, signal and rail work, the Green Line extension, and a new automated fare system, has risen from $631 million in fiscal 2014 to $867 million in the just-completed fiscal 2018.
“This is a major accomplishment for this team,” said Luis Ramirez, the general manager of the T.
Brian Shortsleeve, a director of the Fiscal and Management Control Board and a former chief administrator and general manager at the agency, hailed the T’s fiscal discipline and its tremendous progress in both investing in the system and the employees needed to carry out the work.
Steven Poftak, another director of the control board, which was appointed by Gov. Charlie Baker, said the change at the agency in the last three years has been amazing. When he joined the board, Poftak said, the T was in an existential crisis. “It was essentially devouring itself,” he said. He suggested the agency has turned a corner.
Despite the strong financial picture, T officials have indicated they will seek a fare increase in the middle of next year.
Joseph Aiello, the chairman of the control board, has indicated the T may hold some discussions about new revenues later this year, although he said a firm decision about new revenues could be several years out.“While we have been allocating more capital, we have not been able to spend it fully,” Aiello said in March. “That is changing dramatically now and we are getting on a glide path where we’ll be able to confidently invest more and more capital over time. So that’s a topic [new revenues] that we’re getting ready to sort of field. It’s probably three years out, when we show that we can actually spend all the money that we’ve been given.”
The T gets its operating revenue from fares, the state sales tax, municipal assessments, and a legislative appropriation. Capital investments, money spent on transportation infrastructure as opposed to operations, unding comes from the federal government (46 percent), MBTA debt issues (23 percent), the state (14 percent), savings from the operating budget (11 percent), and other initiatives.