MBTA, facing severe financial crisis, avoids fiscal cliff for another year using one-time federal funds

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Most of the T’s projected revenue for the coming year’s budget comes from state sales tax at $1.33 billion, followed by tariffs at $474 million, aid from the State at $187 million and municipal fees at $184 million.

The T plans to spend the bulk of its funds on salaries and benefits at $932 million, followed by contracts with companies that operate commuter rail, The Ride and ferry services at $652 million, and debt payments for capital projects at $566 million.

Federal COVID-19 relief funds and rainy day funds filled a $288 million gap in the budget this time around, T chief financial officer Mary Ann O’Hara told board members. ‘administration.

“It highlights the issue of continued fiscal sustainability,” she said.

Ridership on the T remains well below pre-pandemic levels. In April, average weekday trips on the MBTA transit system, including commuter rail, were just 55% of April 2019 levels, according to MBTA data. Weekday ridership on the bus system has been the most resilient, reaching 67% of pre-pandemic levels in April.

Prior to the pandemic, fare revenue was about ⅓ of MBTA’s operating revenue. For the coming fiscal year, MBTA estimates that it will derive about 19% of its revenue from fares.

Without additional funding for its operations, T riders could face service cuts, warned Brian Kane, executive director of the MBTA Advisory Board, a group made up of representatives from municipalities served by the transit system. He urged the board to slow spending growth and advocate for new sources of funding for the T.

“One-time federal funds will expire and the T’s sizable reserves are dwindling, but they are not depleted,” he said. “There is a lot of hope.”

Last year, the business-backed Massachusetts Taxpayers Foundation warned of a T’s shortfall in the coming years. MTF vice president for policy and research Andrew Bagley, who wrote the report on T’s finances, said T had to find the revenue needed to sustain its operations or the agency would be forced to cut the service.

“The T has managed its operating budget remarkably well thus far,” he said in a statement. “But if remote or hybrid working persists as expected, operating costs to provide safe and reliable service will far exceed revenues, making a crisis inevitable in the next 18 to 24 months.”

The looming fiscal cliff comes as the T awaits the conclusions of a nearly unprecedented federal security review at the agency, sparked by a series of recent security incidents, including the dragging death in April of a passenger whose arm got stuck in a red line train gate.

O’Hara said there are 148 new budgeted positions specifically designated for security in the next fiscal year, an investment of $15 million.

MBTA Board Chair Betsy Taylor said she was “appalled and concerned” by the most recent known serious safety incident last week when two Green Line trains crashed near the Government Center, sending four operators in the hospital.

“I now challenge the general manager, the head of security and every employee at T to do more,” she said. “I’m asking staff to report back to the full board on what steps can be taken quickly and quickly to refocus everyone’s habits at T in a way that quickly increases the safety of our customers and employees.”

Last week’s Green Line collision was the second time in a year that two Green Line trains have crashed – safety incidents that could have been avoided by technology the federal government first recommended at the MBTA 13 years ago. In March, the council approved a plan to accelerate the implementation of collision avoidance technology on the Green Line by one year, through 2023.


Taylor Dolven can be reached at taylor.dolven@globe.com. Follow her on Twitter @taydolven.

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