Group seeks debt relief for the T
A coalition of lawmakers and public interest groups plan s to file legislation tomorrow requiring the state to take over a portion of the MBTA's debt, allowing the transit agency to become less dependent on fare increases and to spend more on maintaining the rail and bus system and improving service.
In return, the bill would bar the T from raising fares beyond the local cost-of-living index. If that provision had been in effect, it would have reduced the fare increase that on Jan. 1 raised the price of one-way subway rides from $1.25 to $1.70 and bus trips from 90 cents to $1.25.
The consumer price index for the Boston region rose about 6.5 percent between January 2004, when the last fare increase took effect, and the first half of last year, the most recent figure available. The most recent fare increases raised subway fares by 36 percent and bus fares nearly 39 percent.
The legislation is backed by groups that opposed the fare hike, including the T Riders Union, the Conservation Law Foundation, and Livable Streets Alliance.
The groups' leaders now say they recognize the larger financial problems that forced the T to raise fares three times in the past seven years .
"The T has serious financial problems that go way beyond fixing through efficiencies and fare increases," said Eric Bourassa of the Massachusetts Public Interest Research Group . "The T's huge debt challenges the long-term viability of the authority and needs to be seriously addressed by the Legislature."
The bill, which will be introduced by Senator Jarrett T. Barrios and Representatives Alice K. Wolf and Carl M. Sciortino Jr., calls for the state to accept $2.9 billion of the T's $5 billion debt ($8.1 billion if interest is included). The state paid the T's debts until the Massachusetts Bay Transportation Authority's funding system was changed seven years ago to make the authority more fiscally responsible. As part of the change, the MBTA took on $2.9 billion in existing debt from the state. The proposal is the first legislative attempt to relieve any of that burden.
Under the funding system in place since 2000, the T receives 20 percent of the state's 5 percent sales tax, with guarantees that the amount will never go down.
But since then, overall sales tax receipts have slowed instead of rising as they did through most of the 1990s . And the T has taken on more debt, mostly to build major transit projects required in an agreement with environmental groups to offset pollution and congestion from the Big Dig.
The T's debt is now the highest of any transit agency in the nation, with payments and interest of $370 million annually eating up 27 percent of the T's operating budget.
"That's not money being invested to expand service," said Daniel A. Grabauskas , the T's general manager. "It's a very difficult situation."
State Senator Steven A. Baddour , a Methuen Democrat and co chairman of the Joint Committee on Transportation, called the legislation "a good first step," but said his committee will probably hold comprehensive hearings on reforming how the T is funded.
"The debt is crushing the MBTA, and we as legislators need to look at ways to alleviate this debt," Baddour said
He said the committee could consider guaranteeing more revenue by revising how the T is funded, as well as relieving some of its debt. One possible proposal would be to guarantee 3 percent annual growth in the state appropriation to the T regardless of what happens to the sales tax.
T officials said that relieving some of its debt would be a huge help to the 109-year-old transit system, which requires $500 million annually to maintain and repair existing services. It would also allow the T to invest more money in the system. Over the last two budget cycles, the T dipped into its reserves twice, losing $4.7 million and $7.2 million from its emergency fund.
The proposals to change the T's funding come at a tough time for the state and new Governor Deval Patrick , who says the Commonwealth is facing a budget deficit of $1 billion or more.
Patrick has made extending commuter rail service to New Bedford and Fall River a top priority, and also wants to increase the number of trains running between Boston and other regional hubs.
A spokeswoman for Patrick said yesterday that his administration has not decided whether to support the T financing bill.
Stephen J. Silveira , chairman of a commission studying the state's long-term transportation funding, said "the T's finances are absolutely in crisis."
The commission, which is scheduled to issue its recommendations in a few weeks, estimates that the T is short between $4 billion and $8 billion to cover its maintenance needs over the next 20 years, even without any expansion.
Barrios, a Cambridge Democrat, said the bill to relieve $2.9 billion in T debt is essential for the agency, whose health is crucial to the state's economy, serving 1.1 million commuters each workday.
"The 800-pound gorilla in the middle of the room is debt that should never have been given to the T in the first place," he said. "It has become an unmanageable problem. It affects the ability of the T to deliver good service today, to develop good service for tomorrow, and forces them to raise fares and work to generate alterative revenues in a way that's just not sustainable. This bill isn't a luxury. It's a necessity."
Mac Daniel can be reached at mdaniel@globe.com. 