T fares may climb as MBTA eyes riders to help close budget gap

Printed from: https://newbostonpost.com/2015/10/27/t-fares-may-climb-as-mbta-eyes-riders-to-help-close-budget-gap/

BOSTON – T riders may be called on to help ease a growing budget shortfall at the Massachusetts Bay Transportation Authority.

Increasing fares is one of several options the agency’s fiscal management control board is considering as it comes up with a plan to tackle a gap projected to hit $242 million in fiscal 2017 compared with $170 million in the current fiscal year as expenses rise faster than revenue. Possibly revamping the T’s advertising policies and boosting parking fees are also under discussion, according to board member Steve Poftak.

“We are unpacking all of the pieces of revenue,” Poftak said Monday in an interview. “The T has a fairly limited universe of revenue options and a fare increase is one piece we’re looking at.”

State officials created the fiscal management control board after record snowfall last winter wreaked havoc on the aging transit system. Beverly Scott, then the agency’s head, abruptly resigned following high-profile system failures, suspended and delayed services in February.

Documents presented at recent meetings of the financial control board show that the average subsidy for each mode of transport offered by the agency varies widely. For subway rides for instance, taxpayers finance 61 cents of each trip. Trolley fares are subsidized at more than twice that rate, or $1.39 per trip, and bus rides come with a $2.86 rate. But those all pale in comparison with the $5.75 taxpayer contribution to the cost of each commuter rail journey, and paratransit subsidies skyrocket to $45.53 for each time someone uses The Ride service, the MBTA analysis shows.

The special transportation service using cars and minibuses provided about 2.1 million passenger trips at a cost of about $102 million in fiscal 2015 and about $95 million of that was subsidized, according to the T.

In addition to the budget gap, the T also faces a $7.3 billion backlog in maintenance projects and equipment upgrades needed to bring the system up to peak efficiency, according to the board. The Pioneer Institute, a nonprofit research organization in Boston, has recommended changing the way The Ride operates to a model used by state agencies that would cut its costs by as much as $82 million a year.

Still, the system’s subways, trolley lines and buses bring in two-thirds of T revenue and provide 91 percent of all the rides taken on the system, which includes The Ride, ferries and commuter trains, T documents show. Trains that reach as far out as Plymouth, Worcester, Fitchburg and Lowell account for just 8.5 percent.

Regardless of the T’s fiscal woes, a fare increase ought to be the last thing on officials’ minds, said Jim Aloisi, a former state transportation secretary and the co-founder of the Pemberton Square Group consulting firm in Boston. The last fare increase, in 2014, only generated between $20 million and $23 million in additional revenue, Aloisi said.

“You can’t possibly solve this problem on the backs of the T riders – it cannot possibly happen,” he said in an interview. “We’ve got to face a harsh reality, which is recognized by the governor’s own fiscal control board: The needs are huge.”

And asking T riders to pony up more, given the transit system’s poor state of affairs, is not exactly a winning business model, Aloisi said. Raising prices without fixing the service provided could drive off some riders while effectively punishing those who continue to use the subways, street cars and buses that are the primary source of revenue for the transit system.

“We need to understand who the customer is,” Aloisi said. “It isn’t the person making a million dollars working for Fidelity. It’s the secretary in the law firm taking the commuter rail. It’s the senior citizen in East Boston who is going to Mass General downtown. It’s a college student. It’s all of those people.”

Aloisi instead urges officials to consider transferring the transit agency’s debt to the state, which would free up as much as $300 million annually, he said. Currently, the MBTA is spending $305 million annually on debt borrowed for capital investments – such as replacing tracks and buying equipment. Another option is shifting available highway funds toward mass transit, Aloisi said.

Gov. Charlie Baker, a Republican, remains undecided on fare hikes, saying that the issue must be discussed as part of any plan to revamp the T.

“I’m saying that I’m not going to rule them in or out at this point,” Baker said during an appearance on WCVB-TV’s “On The Record” show on Sunday. “I certainly think they should be part of the conversation.”

Poftak said he expects the fiscal management and control board to present a set of recommendations to the state legislature in mid-December. Any fare changes would require public input before taking effect. If officials move ahead on that line, new fares could be in place by July of next year.

State law limits transit fare increases to 2.5 percent a year, but the T’s policy has been to make one adjustment of 5 percent every two years, according to agency documents.