Under 2015’s record snowfall, we have unfortunately seen the aging infrastructure of the Massachusetts Bay Transportation Authority (MBTA) routinely fail. I share your frustration and the frustration of many across the region as these failures have had a severe impact on commuters, families, and local businesses.
The MBTA provides public transit services to 176 communities across Massachusetts, servicing a population of nearly five million, making it America’s fifth-largest mass transit system. A modern, reliable, affordable public transportation system is of critical importance to the greater Boston area, including our communities. It is necessary for the Commonwealth’s economic health and growth; just consider how many people-hours of work were lost due to the MBTA’s shutdowns and delays. Further, public transit vastly improves our environment by giving commuters an alternative to increasing automotive traffic. Finally, an excellent public transit system vastly improves the region’s quality of life.
The MBTA faces significant financial problems that are largely beyond their making. The root cause stems from decisions that were made in 2000 when the MBTA was re-born with the passage of “Forward Funding” legislation. Prior to 2000, the state legislature would appropriate money each year to pay for the portion of the MBTA’s costs not covered by their own revenues (all major public transit systems in the United States rely upon a mix of system-generated revenues and public subsidies).
Under the Forward Funding legislation, the MBTA was given 20% of all sales tax revenue collected annually by the state, and was required to manage its own budget. This seemed prudent since it would force the MBTA to run more efficiently and end each year with a balanced budget. From 1990-2000, sales tax revenue grew at an average of 6.5% per year. Unfortunately, since 2000, sales tax revenue has grown at a far lower rate, well below revenue projections that were assumed in the Forward Funding plan.
Along with lower revenue than anticipated, the MBTA, like many businesses, has also faced rapidly rising energy and healthcare costs. The MBTA is the largest user of electricity in Massachusetts, and has seen its energy costs rise from $40 million in 2000 to $110 million in 2011. Healthcare costs for employees have doubled in the same time period, much as they have for other employers.
The MBTA’s debt stands at about $9 billion, giving it the highest debt burden of any public transit system in America. This cripples the ability of the MBTA to make urgently needed repairs, upgrades, and renovations to its aging infrastructure as nearly 25% of the MBTA’s budget goes solely to debt service. However, once again, this is a situation that is largely not of the MBTA’s own making.
A decision was made in 2000 to transfer $3.3 billion of transportation-related debt from the state to the MBTA. Furthermore, as a result of settlements to lawsuits brought against the Big Dig, the MBTA was mandated to construct a number of new public transit projects that required the assumption of more debt. This high debt burden has been an untenable anchor on our public transportation system.
Over the past five years, the MBTA has made substantial efforts to cut expenses, find efficiencies, and increase non-fare revenues. They have partnered with NSTAR to use energy efficient lighting, joined the state’s healthcare plan which has a good track record of managing costs, restructured debt, and eliminated positions and overtime spending for employees. New initiatives to increase revenue have included expanded advertising and sales of MBTA merchandise. The Massachusetts Department of Transportation (MassDOT) also made the difficult decision to raise MBTA bus, subway, and commuter rail fares several times.
The state legislature has also taken important steps in recent years to implement substantial reforms and to increase investment in our transportation system, including the MBTA. An Act Modernizing the Transportation Systems of the Commonwealth, passed in 2009, eliminated the Turnpike Authority and created a consolidated and streamlined MassDOT. It has saved tens of millions of taxpayer dollars, made our transportation agencies more efficient and responsive to public needs, and significantly improved overall management of transportation services. For example, the new MassDOT was responsible for the impressive Fast 14 Project that repaired crumbling bridges on I-93 in 2011.
Then, in 2013, the state legislature passed an $800 million transportation funding bill, An Act Relative to Transportation Finance, designed to increase investment in the maintenance and repair of roads, bridges, and public transit. Unfortunately, the financing package in that legislation partially unraveled, including most recently with the voters’ repeal last year of indexing the gas tax to inflation. That alone resulted in an estimated loss in revenue dedicated to transportation of more than $1 billion over the next decade. We can only wonder, with Mother Nature exposing the dire need for investment in our transportation infrastructure, whether the result of this ballot question vote would be different today.
When our public transportation systems do not function, our economy is harmed and our public safety is put at risk. This is simply unacceptable in the 21st century. The Baker administration and we in the state legislature must make the urgently necessary investments in our transportation system and enable the MBTA to make clearly needed upgrades, repairs, and renovations. If we do not address these obvious shortfalls in our public transportation system, I fear that the service failures we have encountered amid historic snowfall in 2015 could become more commonplace in the months and years ahead.