Just how bad is the T’s financial situation?

Lane Turner / The Boston Globe

The MBTA’s Fiscal and Management Control Board on Wednesday presented lawmakers with what it has learned so far, diving in to a number of issues around the T that were detailed in a report released last week. The report, a collection of the board’s stark findings in its first two months of existence, included a $7.3 billion repair backlog and growing deficit in the T’s operating budget.

“The 60-day report, as it clearly says, is intended as a baseline report,’’ said Massachusetts Secretary of Transportation Stephanie Pollack, who accompanied the five-member control board to a hearing legislature’s joint committee on transportation. “I know we all want to get to solutions—no one more than I—but if we don’t get the diagnosis right, we won’t get the prescription right.’’


Legislators also seemed to be in diagnostic mode. Their questions were generally geared toward understanding the data within the report, and they thanked the control board for the work to this point.

They did pick at some numbers and definitions, however. The biggest disagreement came when committee co-chairman Rep. William Strauss suggested control board members have overstated the woes of the T’s operating budget—a major focus in last week’s report.

The control board has said the T’s operating budget faces a massive deficit that will more than double to more than $400 million by 2020 if no changes are made. But Strauss argued the term the board uses—“structural deficit’’—makes things sound overly dire, because the gap does not count money the legislature could dole out to the T to help fill budget gaps.

“Members of the legislature or members of the public, when they hear [‘structural deficit’], they get understandably concerned that the budget is in a dangerous situation,’’ Strauss said.

The revenue side of the T’s budget includes its cut of the sales tax, an annual funding source it can count on, Pollack said. But as an independent agency, she argued, the T’s budget should not rely on further state assistance.


“The question is, when you assess whether there’s a structural deficit, do you assess the structural deficit assuming that on top of the billion dollar guarantee, there will be an indefinite amount of additional assistance?’’ she said.

“If [the T is] going to be an independent authority, then I think we should budget like an independent authority,’’ Pollack added after the hearing. “Independent authorities do not have annual appropriations from the legislature as a core part of the budget.’’

Strauss said he and Pollack’s definitional disagreement was “fundamental.’’ He said that going by the T’s definition, cities and towns across Massachusetts, which rely on state aid, would also face a structural deficit.

“‘Structural deficit’ is a scary term, and it suggests immediate action needs to be taken,’’ he said. “And that’s true. We have a responsibility. But the fact that the T has, and perhaps will … going forward, need additional money from the legislature beyond what is mandated is not uncommon.’’

The control board was created by the legislature through the state budget process this summer, at the urging of Gov. Charlie Baker. Baker took on the T as a major political issue in the early months of his first term, when winter storms caused T service to collapse.


Balancing the operating budget is among the board’s responsibilities. Asked after the hearing whether that was possible without additional revenue from the state, Pollack said “that’s the exercise that the control board and the staff is going to be doing.’’

Last week, Baker said he did not foresee new tax revenue going toward the system in the near future.

“Not talking taxes,’’ he said. “Because as far as I’m concerned, we have a long way to go to demonstrate to the public, to each other, and to everybody else that this is a grade-A, super-functioning machine that’s doing all the things it should be doing.’’

Brian Shortsleeve, the T’s Chief Administrator, said in a meeting earlier this week that plans for cutting the operating deficit next fiscal year will be unveiled at control board meetings over the next several weeks.

In a slide described as illustrative of how the T could knock $190 million off the deficit next year, Shortsleeve showed that a big part of the balancing act could come from finding “internal efficiencies and cost control,’’ while new revenue could come through increased advertising and real estate holdings, as well as a tighter focus on fare collection.

The control board has an annual report due in December that is expected to be more solution-centric.

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