Paris Alston: This is GBH's Morning Edition. Governor Maura Healey unveiled her $58 billion budget plan this week, with tens of millions of dollars earmarked for the T. To discuss what that might look like in the year ahead and to catch us up on current efforts at the MBTA is GBH's transportation reporter Bob Seay. Good morning Bob. How's it going?
Bob Seay: Good morning Paris, how are you?
Alston: I'm doing well. So, Bob, we know that the T is getting a little more money here thanks to revenue from the millionaires tax, something that you have been reporting on. And, of course, now we are seeing what Governor Healey has allocated in the budget. So how is all of that going to shake out?
Seay: Well, the millionaires tax revenue will help to balance this year's budget, which, the budget year ends on June 30. But the next year, beginning July 1st, we do face a $93 million budget deficit. So that's going to take some careful management as the T works its way through the next few months. Ultimately, it will be up to the legislature to come up with a solution for the T's funding problems. And the governor also appointed or will be appointing a special transportation task force, which will tackle that very difficult challenge of figuring out how to finance the T in the years ahead. They're going to be convening within the next month, and they're expected to come up with a plan within the next year. But it will involve more fees, taxes, probably more use of the millionaires fund. And although no fare increases are being talked about now, I wouldn't take them out of the picture either for the next couple of years.
Alston: That's interesting considering the low numbers for ridership that have been reported from the T for a few years now, and also at the same time, the fact that the T is considering a reduced fare program for low-income riders. Now, you've been reporting this morning that that was presented to the T's board at a meeting yesterday. Tell us more about that effort and how likely it is to come to fruition.
Seay: Well, this is something that's been talked about for years, actually almost 10 years. So it's finally coming to the point now where the board has a proposal to consider. It would cut fares by 50% for those who qualified, those who made less than 200% of the federal poverty level, that's under $30,000 for individuals, under $60,000 for families. Now, this means a lot, especially for low-income communities who really do depend on the T. And the cost, monthly for some of them can be upwards of $100 or more, which is very significant in terms of their budget. So the T has found that if they do reduce fares, they've had a couple of pilot programs, they can increase ridership, they estimate, by 30%. So that will help recoup some of the revenue that will be lost. But this is considered to be a very important equity issue for the region, especially when it comes to commuter rail, which would be included in this proposal, because commuter rail involves a lot of the so-called gateway cities, where people have to commute long distances to get from Haverhill or Lawrence into Boston. And it can be really a financial burden for them. So this could be tremendous savings for a lot of riders on the T.
Alston: Now, no matter what fare you're paying, we know that getting around on the T is not always easy. But it's been, it's a big year for the T, Bob, because of all the track work and updates to the slow zones that have been promised. What's the update on that?
Seay: Well, good news for Green Line riders. The Green Line work will wrap up this weekend, and that includes all the re-gauging of the rails along the Green Line extension. So people should definitely see a better ride on the Green Line coming up starting next week. The next project will be the Red Line in February. That'll be shut down from February 5th to the 14th, from Alewife to Park Street, and then again on the weekend of the 24th and 25th. Slowly but surely, speed zone restrictions are being lifted, riders are taking notice, and they're also noticing cleaner stations because as they do make these track repairs, they are cleaning up as many stations as they can, and people are saying they are noticing a difference.
Alston: And we know, my co-host Jeremy Siegel has been out, at least with the day of those Green Line shutdowns kicking off, talking to riders about how that's been going. So we'll continue to hear from him as that goes on. And that is GBH's transportation reporter Bob Seay joining us this morning. Bob, thank you so very much.
Seay: Thank you. Paris.
Alston: You're listening to GBH's Morning Edition.
Gov. Maura Healey's push to increase state support for the MBTA could help the agency navigate the year ahead, but it would not be enough to solve a projected budget gap, officials said Thursday.
MBTA Chief Financial Officer Mary Ann O'Hara said budget-writers will need to find another $93 million in fiscal year 2025 to balance the T's revenues and expenses, even after accounting for the extra funding Healey's state spending plan would provide, if approved by the Legislature, and draining the last tranche of stashed-away federal pandemic aid.
"It will be a challenging [fiscal year] '25," added Chief Administrative Officer David Panagore. "So we have to watch our p's and q's."
Healey's $58.1 billion fiscal year 2025 budget calls for providing the T $127 million more in operating assistance, plus $45 million to cover the costs of implementing a low-income fare option.
The T, whose leaders typically roll out a draft operating budget in March, has long faced financial challenges. Officials project the funding gap could swell to more than $900 million by fiscal year 2029 in the most pessimistic outlook.
A persistent drop in ridership and fare revenue since the COVID-19 pandemic exacerbated the problem, which T officials in the past week have tied to the way the system has been funded for the past two and a half decades.
Before outlining their five-year financial projections, Panagore and O'Hara gave a presentation on the history of MBTA funding.
In 2000, after a string of MBTA budget shortfalls, Beacon Hill enacted a "forward funding" law that dedicated a percentage of revenue from the state's sales tax to the T. The measure also handed the MBTA billions of dollars in debt related to the landmark "Big Dig" project, they said.
Since then, Panagore and O'Hara wrote in their presentation, sales tax revenue "grossly underperformed expectations." It grew at an annual rate of 2.3 percent, well short of the 6.4 to 8.5 percent projected at the time. They estimated that left MBTA revenues cumulatively $8.9 billion to $15.5 billion short of expectations.
MBTA Board member Thomas McGee said during the presentation that the T would "be in a whole different place" if sales tax revenue growth matched original expectations.
"We made a -- we didn't find the right revenue that we needed to run the agency at that point," McGee, who served in the Legislature from 1995 to 2018 and co-chaired the Transportation Committee, said. "I'm not saying it was the wrong decision at the time, but as you're going through all of this, that's the piece that's really driving all of this other challenge."
"Don't forget the debt, too," O'Hara replied.
Thomas Glynn, who chairs the T board and previously served as its general manager from 1989 to 1991, said he has had conversations with another MBTA veteran, Richard Davey, who now leads the New York City Transit Authority.
"They did eight small things that cumulated to help solve their [financial] problem, as opposed to one big thing," Glynn said. "I mean, they had to do a lot of work. They had to talk to the Chamber of Commerce in Rochester. It's the same issue, upstate New York's view of New York City, et cetera. So they did a great job."
The heightened interest among MBTA leaders in drawing attention to its funding history comes as Healey and her deputies begin to explore long-term reforms. Alongside her budget proposal, Healey also signed an executive order creating a "Transportation Funding Task Force" instructed to craft recommendations "for a long-term, sustainable transportation finance plan that can support safely and reliably support road, rail and transit systems throughout our state."
It's a topic that previous administrations and the Legislature -- which has its own Transportation Committee -- have studied in depth on multiple occasions. One point that might become a newer focus this time around is how the state can replace revenue from its gasoline tax as electric vehicles slowly become more common and motorists buy less gas.
"We are going to continue to talk about how we fund transportation, not just in our annual budgets, but really talking about the next 10, 20, 30 years," Transportation Secretary Monica Tibbits-Nutt said at Thursday's board meeting.