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“It’s very troubling to know we are struggling to even keep our head above water here,” said director Tom McGee. “We continue to get farther and farther behind.”
The causes of the T’s financial crisis have been well studied for many years and have only worsened since the pandemic.
Related: It’s been four years since the pandemic shutdowns. Riders in Boston are still waiting extra long for the train.
Money the T gets from the state’s sales tax, the T’s biggest revenue source, has not kept up with projections. And the agency is on the hook for debt plus interest from money it borrowed to pay for construction projects, including about $4 billion from projects it was required to take on to mitigate the environmental impacts of The Big Dig.
Many also point to the T’s mismanagement, such as the failed Orange Line shutdown in 2022, and routine cost overruns, including on the Quincy bus garage.
Before the pandemic, fare revenue covered about 33 percent of the T’s operating budget that pays for debt, employee wages, supplies, fuel, and its commuter rail operations contract, among other things. Now, fare revenue covers only about 15 percent. The agency is still providing far fewer bus and subway trips than it did before the pandemic.
For the upcoming fiscal year that starts July 1, the MBTA projects its operating expenses will exceed its revenues by $479 million.
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Budget proposals for the upcoming fiscal year from Governor Maura Healey, the state House of Representatives, and the state Senate all still leave the T hundreds of millions of dollars short, forcing the agency to transfer federal dollars meant for preventative maintenance and money from its “deficiency fund” to make up the difference.
For its five-year capital budget that pays for upgrades to its infrastructure, the MBTA can only pay for less than one-tenth of its needs, the agency said Tuesday. In November, the T estimated that 64 percent of its assets, including tracks, signals, stations, and train cars, are in need of repair and replacement to the tune of $25 billion. Hundreds of projects the T has deemed critical, like building electric bus garages, buying more train cars to increase frequency, and overhauling certain stations to make them accessible, do not have funding in the $9.6 billion plan.
Director McGee called the funding level “totally incapable of getting us where we need to be.”
Lynsey Heffernan, the T’s assistant general manager for policy and strategic planning, said the T is ready to spend more money if the agency can get it.
“If tomorrow, somebody said the team has another $200 million ... would we find a good use to spend it and put shovels in the ground immediately? Yes, we would,” she said. “There is an incredible backlog of need.”
And that need isn’t going away.
The T’s operating budget gap is projected to grow to reach $700 million by the fiscal year that starts next summer and so far there are no plans from the Healey administration or the Legislature to fully fund the agency.
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Roy Epstein, chair of the MBTA advisory board’s committee charged with providing oversight of the agency’s operating budget, called the situation an “existential issue” and urged the board, the governor, and the Legislature to intervene.
“There is a looming crisis in sight,” said Epstein. “We would be remiss not to emphasize how critical it is to deal with an issue that is entirely foreseeable at this point.”
Healey formed a 31-member task force in February that is supposed to deliver a report to her with funding recommendations by December. While other states have fully funded their largest transit agencies for years to come with new tax revenue, Healey recently told a business group she has “no plans to propose new taxes or raise existing ones” and shut down an idea floated by Transportation Secretary Monica Tibbits-Nutt, who chairs the task force, to put tolls at the state’s borders.
One of the first initiatives overseen by the task force was a . The consultants — some charging as much as $610 per hour — are supposed to research how transportation is and could be funded in Massachusetts, as well as how other states and countries do it.
One of the task force members, Brian Kane, executive director of the T’s advisory board, urged the T’s board of directors and the Legislature to consider taking the agency’s debt off its plate, saying it would “help significantly.”
“Doing nothing will only lead to service cuts and stagnation,” Kane said.
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The business-backed Massachusetts Taxpayers Foundation called the situation a “fiasco” in a report urging the governor and lawmakers to resolve next summer’s enormous MBTA budget gap by the end of this year.
“Even as the MBTA works to increase staffing and improve service, what is missing – again – are predictable resources to balance budgets,” said Doug Howgate, president of Massachusetts Taxpayers Foundation and member of Healey’s task force, in a statement. “Employers, commuters, and the larger economy pay the price of a failed transit system.”
In the meantime, T general manager Phillip Eng said he will “keep making the case to fund the T.” He said he is focused on eliminating all slow zones on the T’s subway system by the end of the year and reviewing capital projects to make sure they stay on time and on budget.
“I’m going to hold my commitment to ... making the best with what we have and then keeping the public informed,” he said.
Taylor Dolven can be reached at taylor.dolven@globe.com. Follow her @taydolven.
