The MBTA projects that its annual operating deficit will more than double — putting it at nearly $430 million — by 2020 if it stays the current course, officials said Wednesday.
The figure was unveiled at a meeting of the T’s Fiscal and Management Control Board, during a presentation by Chief Administrative Officer Brian Shortsleeve.
The operating deficit refers to the costs of running the system and paying its debt, compared to revenue from things like an allocated portion of the sales tax, fares, and other sources such as advertising and parking. This fiscal year, the MBTA is expected to post an operating deficit of $170 million, up from $119 million last year. (The state will help to fill that gap with financial assistance.) Next year, the figure will grow to $240 million. By 2020, it will stand at $427 million based on current projections.
The increase is primarily due to MBTA debt service and other operating expenses growing at a faster rate than revenue, Shortsleeve said. A plan to transfer employee salaries that are currently counted toward the T’s capital budget — which accounts for things like new construction and “state of good repair’’ work — to the operating budget will also add to the operations deficit.
Balancing the operating budget is among the responsibilities of the control board, a newly formed oversight committee convened earlier this year as part of a reform effort by Gov. Charlie Baker. Wednesday’s presentation was diagnostic rather than prescriptive, Shortsleeve said. Potential solutions, which would likely include both cutting costs and finding ways to raise revenue, will be discussed later this year. He added that the details presented Wednesday could change upon further examination.
Meetings of the Fiscal and Management Control Board have brought a series of sobering financial revelations. At meetings in recent weeks, the cost to bring the T to a state of good repair was pegged at more than $7 billion, and the board learned the Green Line extension to Somerville and Medford was up to $1 billion over budget.
Lisa Calise, a board member who is leading the examination of the operating budget, said the projected growth of the deficit “does not reflect any reforms, so we have a lot of work ahead of us’’ to try to eliminate it. “This is kind of the core of why the control board was created in the first place,’’ she said.
The control board meeting marked the end of a busy day in Greater Boston transit.
Earlier in the day, members of the Massachusetts Department of Transportation board, which is separate from the MBTA’s control board, discussed the cost increases for the Green Line extension. Members of the public urged the T to move forward with the project.
MBTA interim General Manager Frank DePaola, meanwhile, said the T is seeking ways to cut costs, and that the agency has to this point identified about $100 million in possible cuts. The T is also hoping to negotiate costs down with the contractor for the project.
Board members asked about the procurement process for the project, which has come under controversy as the contractor’s estimates rose. Secretary of Transportation Stephanie Pollack said putting the project back out to bid may not result in lower costs. “We have a lot of questions we need to answer before we can make an informed decision,’’ she said.
Also Wednesday, another major rail project long imagined by state leaders gained some fresh attention. Former Democratic Gov. Michael Dukakis and former Republican Gov. William Weld met with Baker, a Republican, to advocate for an underground tunnel connecting North and South stations. The link would allow for easier rail service from south of the city to north of it and vise versa, and had been favored by both the Dukakis and Weld administrations.
Ahead of the meeting, Baker had not signaled much support for the idea, but said he was eager to meet with his predecessors. His administration has been more warm to a planned expansion of South Station, a project the former governors have said would not be necessary if the North-South rail link was built.
Baker didn’t sound particularly moved after the meeting. According to WBUR, he said he has “some homework to do with respect to this, but my view on this, and I said this to both governors, is when it comes to projects like this the devil is very much in the details.’’ According to the Associated Press, Baker said he still sees the South Station expansion as “something we will and absolutely should consider.’’
The potential costs for the proposed rail link have recently been cited at $4 billion on the high end. On the low end, it’s $2 billion — or, where the Green Line extension costs stood until last month.
Gallery: This is what the MBTA used to look like