In future of MBTA, how public is public transit?
Facing debt and little state help, MBTA proposes fare hike that could burden many
The MBTA needs to scrounge up millions more to keep running, and billions more to be running well, so say MBTA officials. A fare hike proposed by the agency’s fiscal management control board might help fill the funding gap. If enacted, it would put more of the T’s financial support onto the individuals who choose to use it — or have no other option — rather than the state itself.
An estimated $7 billion is needed to repair equipment and $242 million to keep operating in fiscal year 2017, the MBTA’s chief administrator, Brian Shortsleeve, said last month. That assumes the repair cost is paid all at once — if payment is spread over 25 years, the amount, adjusted for inflation, would total $21 billion, according to transportation advocacy group Transportation for Massachusetts.
The state already invested $83 million preparing the T for winter. The Baker administration may be disinclined to direct more of its revenue into the system.
The fare increase, one of the revenue-raising measures being considered, would disproportionately burden those with lower incomes. Economists say it may not be the only way to make ends meet.
Fare raise: promises and burdens
Some legislators, transportation officials and activists disagree over interpretations of the law restricting next year’s fare raise, with some saying fares are allowed to rise by 10 percent, others saying by only five percent. In either case, it would need to be paired with other steps.
A five percent increase could generate $20-23 million more in funding, and a 10 percent increase $40-46 million, according to James Aloisi, former state transportation secretary.
Economists say the measure may push some users off the T. This could make revenue fall short of expectations.
As fares rise, those with other transportation options may decide they are not saving enough by using the T to make it desirable over driving or using rideshare services.
“People think, ‘Oh, if I’m paying that much, I might as well drive,’” said Rafael Mares, vice president and director of healthy communities and environmental justice at the Conservation Law Foundation.
On the other end of the spectrum, the hike may be too much for low-income earners’ wallets and force them off the T. When this happens, they may have few other options.
“[With past increases,] we heard from young people who couldn’t afford to go to school on certain days or people who couldn’t make medical appointments or go to church,” Mares said.
In a letter to the MBTA’s control board, T4MA noted that when fares rose in 2007, ridership dropped by approximately 10 percent.
Two members of MBTA’s board, Monica Tibbits-Nutt and Brian Lang, also have voiced concerns about asking individuals who make under $20,000 to pay more.
The T is testing out providing need-based discounts for users of The Ride, its door-to-door paratransit system, and Youth Pass.
Funds from the state
Legally, the state could underwrite the T’s operating budget.
The Transportation Finance Act of 2013 was created to provide extra funding for transit needs — including road and bridge repair as well as the MBTA — without raising fares. The money is generated through tax increases on certain goods like cigarettes and gas.
If the governor and Legislature put in the full amount the act stipulates, the MBTA’s operating budget would be fully funded, although the repair funds would not. The $242 million budget gap was calculated on the assumption that none of the Transportation Act funds would be allocated.
“[There is a] $242 million deficit. The pro forma for the 2013 Transportation Act said they should get $261 million in additional funding. We’d have an extra $19 million if they accepted that,” Mares said.
The issue is that the act only allows the state government to put this extra funding into transportation. It does not require it be done, he said.
Transportation, of course, is not the only need facing the state, but the choices the Legislature makes around where to direct limited dollars reflect priorities.
“The problem is that the state is committing funding pretty heavily to other things and probably spending more than revenues supports,” said Peter D. Enrich, professor of law at Northeastern University.
Shifting the burden
While raising fares would place greater drain on low-income earners, a proposed millionaires’ tax would pass the burden to those earning the most.
Raise Up Massachusetts, a coalition of organizations focused on economic and social causes, calls for state income tax to be raised by 4 percent on those making more than $1 million and directing the new revenues to transportation and education. In 2013 there were approximately 14,000 people earning $1 million or more, according to The Boston Globe. Raise Up Massachusetts anticipates the millionaires’ tax could generate more than $1.5 billion.
Other tax measures also could shift financing the T away from individual users and onto companies. One possibility, Enrich said, would be to remove business tax credits that have not proven sufficiently effective at bringing economic activity.
“[The film tax credit] is not even close to being cost-effective and we’d do better to spend on other things,” he said.
T users, all users
Kristina Egan, T4MA’s director, argues that the MBTA is an asset to the entire public, not just those who use it and that it deserves state assistance of the full $261 million or more.
“The MBTA is a public good, and it benefits those who ride, while also benefiting those who do not ride by keeping cars off the streets, lowering emissions, and helping the economy,” according to group’s letter, signed by Egan.