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Opinion: The Troubled T - Things Can Only Get Worse

The MBTA suffered a bad week, with two disabled subway trains leaving passengers wandering through darkened tunnels. And with the authority $8 billion in debt, things can only get worse.

It’s a dichotomy.

The MBTA is a roaring success - it’s used for 1.15 million passenger trips, each weekday.

The T is a complete failure; it’s broke, literally.

A Red Line subway breakdown last Tuesday left 400 passengers scrambling in the dark for safety. (Hopefully, no one had seen this movie.) Then, just four days later, a Green Line subway car derailed, forcing riders to walk through the tunnel between Hynes and Kenmore Square.

Blame was placed on the MBTA’s  of subway cars that has led to an increase in delays and breakdowns - some cars are over 40 years old, far longer than their expected 25-year lifespans. 

They can’t be replaced, or even refurbished, because the T is bleeding money and owes $8 billion in long-term debt. Meanwhile, the state proposes new (and costly) commuter rail lines and subway extensions.

What’s going on?

Born broke

In 2009, the MBTA Advisory Board released a special report, which outlined a major cause of the T’s problem:

In 2000 the MBTA was re-born with the passage of the Forward Funding legislation. This legislation dedicated 20% of all sales taxes collected state-wide to the MBTA. [However] It also transferred over $3.3 billion in Commonwealth debt from the State’s books to the T’s books.  

In essence, the MBTA was born broke.

Since then, the MBTA has faced constant budget deficits. Most-recently, in fiscal year 2012, its “structural imbalance” was estimated at $118 million, a hole it is only able to fill with one-off sales and financial gimmicks (including “restructuring” its debt, which simply pushes the payments into the future).

Fare revenue covers just 27 percent of the T’s costs. Meanwhile, 22 percent of its budget is dedicated to debt service. In a way, when you pay your $1.70 fare, $1.40 of it is going right out the door to pay interest on the T’s bonds, not toward the cost of your ride.

This isn’t sustainable! The problem is clear and simple: expenses are higher than revenues. If only the solution was so easy to figure out. 

Possible solutions

Increase fares: A system that only charges a quarter of what it costs is not practical. The T needs to educate its passengers on what it truly costs to run the trains and then charge them for it. As much as half the real cost should come from each rider. (I use the T as my primary mode of transportation, so I’m putting my money where my mouth is.)

Find new funding sources: Around 10 percent of the MBTA’s revenue comes from the 175 cities and towns serviced by the T. I don’t think these municipalities are going to be willing to cough up any more money, especially when the state continues to cut local aid.

Approximately 47 percent of the T's budget comes from taking 1 percent of the state's 6.25 percent sales tax. Additional revenue can be raised by increasing the gasoline tax to cover either the T’s existing debt or future capital expenses (or both). It seems logical that, since roads, bridges, and tunnels are paid for by the gas tax, so should the state’s other transportation needs.

The T is showing it's at least open to new funding ideas by opening its new . (Missed opportunity? How about a "I Got Mugged on the T" coffee cup?)

Slim down: The MBTA has a slew of projects already under way. It’s also planning to spend more than $3.8 billion on its Capital Investment Program.

The T can’t defer many of these projects; it needs to buy and refurbish subway cars, trains, and buses, and lay tracks and upgrade signals. But, it can’t afford to spend money it doesn’t have, which is why it doesn’t make sense to begin new projects such as the Green Line extension to Medford, the Blue Line extension to Lynn, a North-South Rail LinkSouth Coast rail, or a Red Line - Blue Line Connector. (The state's Department of Transportation would cover the costs of completing many of these projects, but the T will be on the hook for repairs, maintenance, and upgrades.)

At some point, we have to say, “No,” or, at least, “Not now.”

Of course, there are plenty of other ways to save money. I’m not alone in thinking there must be hundreds of thousands of dollars being lost to Green Line fare evasion, for example. And, although it may be premature to draw conclusions, I'm skeptical that reorganizing the Department of Transportation to include the MBTA has benefited the T in any way beyond a minor cost savings.

The future

MBTA General Manager Richard Davey is doing a great job. Not only has he improved communication between the MBTA and passengers, he’s willing to take responsibility when things go wrong. Even better, he actually rides the subway! (You can follow him on Twitter, @mbtagm.)

But alerting passengers of delays and breakdowns is only the beginning. The T needs to spread the word about the depths of its funding and financial problems.

When the T works, we don’t pay attention. But, when it doesn’t, we’re disappointed. Sadly, over time, we’ve come to expect its constant failures. 

Will we ever grow weary enough that we’ll take action and demand change?

Jonah Petri July 20, 2011 at 09:31 PM
Great article! Thanks for the good summary of the issues. One comment: the Commonwealth is obligated under the Clean Air Act to build and run the Green Line Extension to Medford. It cannot default on that obligation any more than it can default on its other debts. I would be tempted to consider the costs of running and maintaining that service as yet another debt which the Commonwealth pushed onto the MBTA.

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