IT'S EASY to scoff at the MBTA's fiscal woes. If the T can't make ends meet with $4 a gallon gasoline and ridership at record levels, when will it ever stand on its feet? But fares cover less than half the actual cost of a trip. And the agency has a millstone around its neck: an $8.1 billion debt that saps 27 percent of operating costs just to pay the interest. The debt is unfair and severely distorts the T's balance sheet. The state should find a way to ease the burden.
"We are sinking in quicksand," says Daniel Grabauskas, the T's general manager. Grabauskas made his reputation as a public reformer by overhauling the sclerotic Registry of Motor Vehicles under former governor Paul Cellucci, and with a few high-profile exceptions - such as the practice of letting some managers drive T-issued cars for personal use - he has tightened the reins at the T.
Grabauskas says overtime pay is down 35 percent since he took office in 2005, and he recently won concessions from a state arbitrator that for the first time will have T pensioners contributing 10 percent to their healthcare premiums (heretofore they paid nothing). Crime is down to the lowest point in 10 years, new trains are coming on line, and the Charlie Card system is working, offering discounts to cardholders.
But Grabauskas sent up a flare this week: If the state can't rescue the T from its crushing debt, fares will likely have to go up again - a counterproductive move that could halt the steady rise in new riders. The MBTA is a public utility - and a necessity for lower-income people who don't own cars. It needs to keep fares absolutely affordable, not just cheaper than driving an SUV.
Unfortunately, fares are the only significant part of the T's budget over which Grabauskas has control. Fare revenues haven't kept pace with costs, since buses and commuter trains run on pricey fuel, too. In June the T's bus service took in $400,000 more in fares than June of 2007, for example. But fuel costs that month were up almost $900,000 over last year. A similar dynamic holds for commuter trains, boats, and even the subway, which runs on electricity.
It must have been frustrating for Grabauskas to watch the Massachusetts Turnpike Authority get help from the Legislature in the waning hours of this session. After all, Grabauskas didn't get in over his head with exotic market "swaptions" the way the Pike did. Governor Deval Patrick broached a plan to let the Pike transfer a portion of its debt to the Commonwealth, where it could pay a smaller interest rate, and the Legislature added some much-needed oversight reforms. But unlike the Pike, the T's credit rating is actually better than the state's.
The biggest chunk of the T's revenue comes from a dedicated percentage on the state sales tax. But because those revenues fluctuate with the economy, they have been unreliable. It would make sense to give the T a mix of revenue streams to protect against one source collapsing, or at least put a guaranteed floor under the revenues.
Grabauskas knows this is a moment of truth for the MBTA. Will the flood of new riders get hooked on inexpensive, reliable service, or will they flee from crowded trains and spotty schedules as soon as gas prices ease? For the first time in years, the state has a governor who supports public transportation for its environmental and social value. Together the T and the state need to keep it an economic value, as well.
