MBTA to lay off 75 to trim deficit

The layoffs, which will include Transit Police and call center employees, along with office staff and managers, will save $4.5 million to $6 million a year, but will probably not be enough to prevent the agency's budget gap for the coming year from growing even larger than the previous projection of $160 million, said Grabauskas. The cuts will not have a direct impact on bus, rail, or other commuter services.

"I expect the deficit to be larger," Grabauskas said. "But I can't tell you how much."

He cataloged a multitude of new woes facing the Massachusetts Bay Transportation Authority yesterday - including fewer passengers, decreases in advertising revenue, and increases in pension costs - that could add millions to the deficit as the T begins a budget year fraught with uncertainty July 1. Grabauskas has said he will have to raise fares and cut service drastically unless the authority gets help from the State Legislature, far from a certainty, given leading lawmakers' lack of support for a gas tax increase.

Grabauskas also announced new rules preventing retired employees from working under consulting contracts with the T, or working for the T through employment agencies. Former T employees could still work for companies hired by the agency for outside projects, but companies will be required to disclose the relationships, Grabauskas said. The new rules were adopted after a recent report in the Globe that the T had hired four retirees as contractors, allowing them to collect both pensions and salaries.

"I want to avoid even the perception of favoritism," said Grabauskas.

His effort to build public support for a rescue has been hampered by the report of double-dipping retirees. Talking to reporters yesterday, Grabauskas pointed out a number of efforts he has made to reduce costs, including a 34 percent reduction in overtime expenses between 2005 and 2008.

The T announced furloughs and layoffs a week after Governor Deval Patrick imposed similar measures on other state agencies. The T, an independent authority, maintains a separate budget from the state, but also relies on sales tax dollars to pay the bulk of its operating costs.

"We're in a global recession," said Senator Steven A. Baddour, a Methuen Democrat who cochairs the Joint Transportation Committee. "We're going to be forced to make some very difficult decisions that will fundamentally change the face of state government."

The combination of lower-than-expected tax collections and increasing payments on the T's $8.1 billion debt have hurt the authority's efforts to escape a cycle of deficits. In recent years, the T has restructured its debt repeatedly to come up with cash necessary to stay afloat. Because of that, its debt payment will increase in the next fiscal year by $77.5 million, the biggest single factor in the looming deficit.

The T has about 6,244 employees. In addition to trimming 75 positions, the T has reduced its staff by 187 people since a 2008 hiring freeze and plans to reduce staff by an additional 70 positions in the coming budget year, Grabauskas said.

All but about 300 of the T's employees are covered under union contracts, meaning the 3- to 5-day furloughs and wage freezes announced yesterday will affect only a fraction of its staff. Union workers, as part of an arbitrated contract settlement, are scheduled to receive 4 percent pay raises in the coming budget year, costing the agency $14.7 million.

Grabauskas, who has said he will forgo an increase in his $255,000 salary, said he has held informal talks with union leaders about similar concessions, but has yet to sit down formally. The head of the T's largest union, the Boston Carmen's Union, could not be reached for comment yesterday afternoon.

The T has known about the higher union salary costs and the increased debt payments for months. But other issues have taken longer to emerge. Passenger counts, which reached record highs last year amid rising gas prices, have begun declining again, with drops of 4.9 percent in January and 4.8 percent in February.

The T had been assuming an increase in ridership of 1 percent for the coming budget year.

Public transit advocates have been warning of the T's problems for more than a year and are increasingly worried lawmakers will not rescue the agency.

"I don't think this is some political move; I think this is literally the T trying to balance its books," said Eric Bourassa, an advocate with the Massachusetts Public Research Interest Group who closely tracks the T's finances. "I am very frustrated that in the Legislature, the conversation quickly becomes a political one and not a substantive policy discussion."

Noah Bierman can be reached at nbierman@globe.com.