STATE HOUSE NEWS SERVICE
THE MBTA, which recently voted to raise fares and made significant headway on its structural deficit this year, could look to service cuts in fiscal 2017 when it tries to bridge the remainder of its projected $80 million gap, a top T official said Thursday.
The transportation authority is counting on approval of a $187 million appropriation from state lawmakers this spring to fill the fiscal 2017 budget hole and increase spending on maintenance projects.
Further reducing the structural deficit could involve service cuts, MBTA Acting Chief Financial Officer Michael Abramo said at a meeting of the MBTA Advisory Board on Thursday.
The meeting centered around the roughly $2 billion annual budget given initial approval by the MBTA Fiscal and Management Control Board.
“We’re funding to keep the service uncut for the next year, although technically the financial control board could cut them to save money,” said Robert Guttman, Beverly’s representative to the advisory board, hoping to have his statement confirmed.
“I would say we’re reviewing all services,” Abramo responded, continuing, “In the deck that we presented to our control board for our budget, there’s a discussion of potentially cutting some services.”
“On paper it’s funded for the next year, but the financial control board is reserving judgement on whether to cut midyear,” Guttman replied.
“Yes,” said Abramo. “And part of that would be to address that $80 million.”
Deficit reduction in fiscal 2016 has been driven in large part by holding the line on overtime and other spending, while extended-hours service on the weekends was cut earlier this year.
“The T had been historically increasing expenses by about 5 percent a year with revenue growth of like 1.6,” Abramo said. “We actively spoke with every department head and said, ‘Listen, can you hold the line in the current year with the current spend that you have?’ and then we actually asked for a 5 percent reduction.”
Expenditure growth over the first several months of fiscal 2016 has been basically flat, and the projected fiscal 2017 deficit fell from $242 million to $80 million.
MBTA Advisory Board Executive Director Paul Regan said new decisions await the control board, which was created by the Legislature last year to take over the struggling transit system.
“The bottom line is the [control board] has a three-to-five-year life. The first year is always the low-hanging fruit. It doesn’t feel like it but you do the easy things first and then you do the hard things,” Regan told the News Service. “There’s nothing harder than cutting service. The things that we’ve heard about are weekend commuter rail service wholesale.”
Earlier this year chanting protesters drowned out the control board as it raised fares an average of 9.3 percent.
Regan praised the budget submitted by the T this year, saying it was “very different” from prior years, including more up-to-date financial information. He also praised the T’s new oversight board.
“They’re not shy about asking hard questions,” Regan said of the five-member volunteer board that meets nearly every week.