With ‘cliff’ looming, T stalls for time

Bags 5-year capital plan for 2d year in a row

MBTA OFFICIALS are planning to put off the release of a new, five-year capital plan until June 2022, a move that reflects the financial uncertainty caused by the coronavirus and also the political calculus of a governor running out of funding options for the T’s ambitious capital spending program.

It may sound like a minor issue, but good government types recommend setting out capital spending targets in five-year increments. The Government Finance Officers Association says a multi-year plan is the best way to ensure proper development and management of capital assets and send a message to contractors that the money for projects is in the pipeline. “A capital plan should cover a period of at least three years, preferably five or more,” the association says.

 But officials with the state Department of Transportation and the MBTA announced at a joint board meeting on Monday that they are planning to issue one-year capital spending plans for fiscal 2022 – the second year in a row the agencies have gone that route.

 “Due to the ongoing uncertainty and the changes we all face with COVID, the one note here is we do not expect to proceed with a complete reset this year,” said acting state Transportation Secretary Jamie Tesler, referring to earlier plans to return to a five-year capital plan.

 Betsy Taylor, a member of the MassDOT board, said planning into the future is impossible with so many unknowns — about ridership as well as state and federal funding. “While this is not where we thought we had been heading, I welcome this change and support it,” she said.

A one-year capital plan also allows Gov. Charlie Baker to put off for another year any discussion about a looming shortfall in capital funds.

 Andrew Bagley, a vice president at the Massachusetts Taxpayers Foundation, appeared before the MBTA’s Fiscal and Management Control Board in November and warned its members that the state’s available funding for capital projects is going to fall off a cliff in fiscal 2025. By not putting out a five-year capital plan next year, Baker puts off the discussion about what to do about the cliff for another year.

 Bagley predicted capital funding sources for the T will start falling about $1 billion short of what’s needed in fiscal 2025. The T’s operating budget faces similar challenges. Fare revenue has plummeted during the coronavirus pandemic and the T’s latest projections indicate ridership will not return to pre-COVID levels by the fall of 2023 – and possibly never, given the growing acceptance of telecommuting.

“You really need lots of operating revenues and capital revenues, which right now don’t appear to be available,” Bagley told the control board.

Baker has been loath to say new transportation revenues are needed. Still, putting off the debate for another year comes with a downside, since next year the governor’s race is likely to be in full swing.

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Bruce Mohl

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About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Some sources say Baker may be hoping possible Biden administration initiatives on bus electrification and transportation infrastructure will bail the state out. Or perhaps the way forward is with less, not more, transportation investment, which may explain why state transportation officials are backpedaling on a $1 billion makeover of the I-90 Allston interchange and moving cautiously on bus and train electrification.

Joseph Aiello, the chair of the control board, on Monday predicted continued operating deficits at the T for a number of years. He said the T may need to keep using money it typically sets aside for capital projects to help balance the operating budget.

“We’ve got to scrub every capital program for any kind of flexibility we can buy over the next five years or so,” he said.