MBTA Trying to Balance Budget Without Fare Increase

The MBTA intends to fill a $135 million deficit on its fiscal year 2012 budget (July 1, 2011—June 30, 2012) without increasing fares and maintaining service levels, announced T officials on Wednesday, according to reports by Associated Press and the Boston Globe.

Through a combination of measures that include leasing the 1,275-space parking garage below North Station and TD Garden, and securitizing revenues (selling future parking revenue from 50,000 spaces to investors in exchange for cash upfront to bridge its current deficit), the T expects to raise or save enough funds to balance its 2012 budget.

MBTA officials plan to keep staffing below 6,000 and increase ridership by at least 3 percent, as well as boost advertisement revenue.

Saving measures include switching buses to low-sulfur diesel fuel, reducing overtime, restructuring stations, and streamlining cleaning contracts.

All these steps combined would still leave a gap of $33 million for fiscal 2012.

In addition, the T has a $8 billion long-term debt obligation, which has a scheduled payment of $450 million next year. Debt payments will have to be met through refinancing or through service cuts and fare increases.

Debt service accounts for about one-fourth of the T’s nearly $1.7 billion projected budget. Revenues include $550 million from fares and advertising; and a portion from the state sales tax and additional legislative assistance that bring in over $1 billion.

Where does the T financial condition leave JP's Arborway Yard?

The yearly operating budget is separate from the Capital Investment Plan (CIP), which is money committed over a five-year period to infrastructure maintenance, rolling stock, new bridges and tunnels, track improvement, and the like, as explained on the T's 2011 budget document.

The Arborway Yard is a 18-acre swath of land on Washington Street and the Arborway in the Forest Hills section of Jamaica Plain.

Around 1999 the MBTA built a facility on the yard that was meant to be only temporary for five years, to be replaced by a permanent transit facility that would be a model of environmental soundness and safety. Close to half the land would be turned over to the city for affordable homes, small businesses, and open space.

On its 2012-2016 Capital Investment Plan the MBTA omits the $220 million funding for the Yard.

In the original plan the facility design was expected to be completed in the spring of 2011, and be shovel ready in time for the state Department of Transportation board meeting in April, when the yearly budget and the 2012-2016 CIP are discussed and approved.

Several JP organizations and individuals have been urging the transit authority to reinsert the Arborway Yard Transit Facility into the CIP, among other reasons because $30 million have already been invested into the site, including costs for planning and design of the new permanent facility.

working with MBTA staff, architects, City of Boston experts, the Boston Redevelopment Authority and others, to design an exemplary facility to serve the long-terms needs of the MBTA, its ridership and the adjacent community.

 in January, Patch received a letter written to concerned residents by the T's General Manager Richard Davey, in which he expresses “As you know, the MBTA faces very difficult fiscal circumstances because of legacy debt burdens and a $2.7 billion backlog in state of good repair projects. Due to these constraints, we had to refocus the current MBTA CIP to invest in the Authority’s aging infrastructure,” and expressed that if additional funding is identified the Arborway Yard will be considered one of the “prime candidates for inclusion into a future MBTA CIP.”

Wednesday's meeting of the MBTA board is the last before the Capital Improvement Plan is finalized. Local advocates are encouraging residents to attend the meeting to push for inclusion of the Arborway Yard project.