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MBTA, highway system face vast budget deficits
Budget analysis examines only operational costs
By Eric Moskowitz Globe Staff November 20, 2012
Just months after the MBTA raised fares, the T faces a $130 million deficit for the next budget year, according to an analysis released Monday by a regional think tank.
But that daunting financial gap is eclipsed by a $240 million shortfall to operate the highway system, the study concluded.
The budget analysis, conducted by the Dukakis Center for Urban and Regional Policy at Northeastern University, does not include money to address a vast and growing backlog of repair and replacement needs for everything from rail cars to bridge abutments or to improve transportation across the Commonwealth. The analysis merely reflects the cost of running the system as is and suggests that tax increases, fare hikes, or cuts could be on the horizon.
The T figure, if a shock to commuters* still adjusting to the July fare increase, was foreshadowed by officials last spring who acknowledged that the higher prices, coupled with cuts and emergency funding, amounted to a one-time fix.
The highway deficit has not been tallied in this fashion this way before *because its budget is balanced by borrowing, which pushes the cost of present-day mowing, striping, and snowplowing far into the future. “The Massachusetts Department of Transportation can’t actually operate on the operating budget that it has or that it’s been given by the Commonwealth for many, many years, so it does something that anyone who knows business knows is a terrible practice,” said *Stephanie *Pollack, associate *director of the center. “It [borrows] to pay for things that should be in its operating budget.”
The center released the figures as part of an extensive analysis attempting to establish statistical benchmarks to gauge the financial state of the transportation system and to grade it on accessibility, infrastructure health, and regional equity, both annually and against peer states. The center released preliminary findings Monday at a sustainability conference for municipal officials, academics, and environmental and land-use planners and activists.
The numbers were released as Governor Deval Patrick’s administration tallies its own figures on the gap between what the state currently spends and how much it could or should spend to maintain a robust, healthy transportation network, along with how much could be raised by taxes or fees. That January report, requested by lawmakers, is likely to precede a Patrick budget that could call for new revenues, as well as efficiencies, to address the long-simmering transportation funding crisis.
“It is clear to us that the system we have today we cannot afford and the system that the public wants we definitely can’t afford,” Richard A. Davey, the state’s secretary of transportation, said in an e-mailed statement Monday. “In the coming weeks and months, we will conclude a comprehensive review of our transportation system and determine what resources we need to set us on a path *toward a high quality, sustainable transportation future.”
Davey and his team are two-thirds through a 19-stop tour across the state to discuss large aspirations and local complaints about transportation and to lay groundwork for the financial plan that will be delivered in 2013.
Mayor Joseph A. Curtatone of Somerville, president of the state association for metropolitan mayors, lobbied Monday’s Sustainable Communities conference for help in encouraging lawmakers to put transportation on sound financial footing. He said they will succeed by framing it not as a debate about taxes but about necessary invest*ment in job creation, commerce, environment, and quality of life.
“For far too long, the opponents of transportation investment have sought to portray our transportation system as some alien, archaic, inefficient burden that we all carry,” he said. “They don’t explain how our economy will succeed without it; they just say it’s broken and not worth any future *investment.”
The T and the highway system have structural deficits, meaning that each struggles to balance its budget annually without substantial cuts or new tolls, fares, or taxes. An array of expenses — electricity, fuel, asphalt, employee health insurance, federally mandated transportation for the disabled — have risen much faster than *inflation and the state’s transportation revenues over the past decade.
The T is legally bound to balance its budget, a requirement that has brought debate over cuts and fare hikes to the fore. The highway system does not face such a mandate, so it has more quietly borrowed while pushing principal and interest payments on this year’s pothole repairs into the future.
“We felt it was time to kind of call it as we see it and say, ‘There is an operating deficit that is actually larger than the MBTA operating deficit,’ and until we acknowledge that, we’re not going to solve it,” *Pollack said.
Budget analysis examines only operational costs
By Eric Moskowitz Globe Staff November 20, 2012
Just months after the MBTA raised fares, the T faces a $130 million deficit for the next budget year, according to an analysis released Monday by a regional think tank.
But that daunting financial gap is eclipsed by a $240 million shortfall to operate the highway system, the study concluded.
The budget analysis, conducted by the Dukakis Center for Urban and Regional Policy at Northeastern University, does not include money to address a vast and growing backlog of repair and replacement needs for everything from rail cars to bridge abutments or to improve transportation across the Commonwealth. The analysis merely reflects the cost of running the system as is and suggests that tax increases, fare hikes, or cuts could be on the horizon.
The T figure, if a shock to commuters* still adjusting to the July fare increase, was foreshadowed by officials last spring who acknowledged that the higher prices, coupled with cuts and emergency funding, amounted to a one-time fix.
The highway deficit has not been tallied in this fashion this way before *because its budget is balanced by borrowing, which pushes the cost of present-day mowing, striping, and snowplowing far into the future. “The Massachusetts Department of Transportation can’t actually operate on the operating budget that it has or that it’s been given by the Commonwealth for many, many years, so it does something that anyone who knows business knows is a terrible practice,” said *Stephanie *Pollack, associate *director of the center. “It [borrows] to pay for things that should be in its operating budget.”
The center released the figures as part of an extensive analysis attempting to establish statistical benchmarks to gauge the financial state of the transportation system and to grade it on accessibility, infrastructure health, and regional equity, both annually and against peer states. The center released preliminary findings Monday at a sustainability conference for municipal officials, academics, and environmental and land-use planners and activists.
The numbers were released as Governor Deval Patrick’s administration tallies its own figures on the gap between what the state currently spends and how much it could or should spend to maintain a robust, healthy transportation network, along with how much could be raised by taxes or fees. That January report, requested by lawmakers, is likely to precede a Patrick budget that could call for new revenues, as well as efficiencies, to address the long-simmering transportation funding crisis.
“It is clear to us that the system we have today we cannot afford and the system that the public wants we definitely can’t afford,” Richard A. Davey, the state’s secretary of transportation, said in an e-mailed statement Monday. “In the coming weeks and months, we will conclude a comprehensive review of our transportation system and determine what resources we need to set us on a path *toward a high quality, sustainable transportation future.”
Davey and his team are two-thirds through a 19-stop tour across the state to discuss large aspirations and local complaints about transportation and to lay groundwork for the financial plan that will be delivered in 2013.
Mayor Joseph A. Curtatone of Somerville, president of the state association for metropolitan mayors, lobbied Monday’s Sustainable Communities conference for help in encouraging lawmakers to put transportation on sound financial footing. He said they will succeed by framing it not as a debate about taxes but about necessary invest*ment in job creation, commerce, environment, and quality of life.
“For far too long, the opponents of transportation investment have sought to portray our transportation system as some alien, archaic, inefficient burden that we all carry,” he said. “They don’t explain how our economy will succeed without it; they just say it’s broken and not worth any future *investment.”
The T and the highway system have structural deficits, meaning that each struggles to balance its budget annually without substantial cuts or new tolls, fares, or taxes. An array of expenses — electricity, fuel, asphalt, employee health insurance, federally mandated transportation for the disabled — have risen much faster than *inflation and the state’s transportation revenues over the past decade.
The T is legally bound to balance its budget, a requirement that has brought debate over cuts and fare hikes to the fore. The highway system does not face such a mandate, so it has more quietly borrowed while pushing principal and interest payments on this year’s pothole repairs into the future.
“We felt it was time to kind of call it as we see it and say, ‘There is an operating deficit that is actually larger than the MBTA operating deficit,’ and until we acknowledge that, we’re not going to solve it,” *Pollack said.
