MBTA’s GM: ‘We’re broke’
Says new fare hike may not be enough
by christina wallace / metro boston
NOV 10, 2006
BOSTON — MBTA General Manager Daniel Grabauskas believes the significant fare increase approved yesterday may not be enough to propel the T out of debt and balance next year’s budget.
Grabauskas claims the T could face an additional $22 million shortfall next year if gas prices increase or revenues dip. Yesterday’s fare increase is expected to close an already $70 million budget deficit.
“We’re broke,” said Grabauskas, speaking after the MBTA Board of Directors unanimously approved a fare increase, effective January 2007.
According to Grabauskas, the MBTA “forward funding” scheme, which went into effect in 2000 by a legislative mandate, is not working. Although the T is required by law to balance its budget every year, it’s close to impossible due to the tools T officials have to work with, Grabauskas said. The T’s funding scheme is based on a portion of the state sales tax, assessments from the 175 communities the T services, and both fare and non-fare revenue, such as advertisements.
Tax revenues have been stagnant, health care and gas prices have skyrocketed and the T has been working to pay down $8.1 billion in debt due to expansion projects, he said.
“The formula needs to be looked at. The forward funding clearly is not performing to give us the revenues we need,” Grabauskas added.
Since 2000, the T board has approved three fare increases in order to balance the budget.
Governor-elect Deval Patrick released a statement yesterday expressing disappointment with the fare increase, saying the revenue system needs “significant reform.”
Grabauskas said he hopes to work with the new administration to find solutions for the T’s massive fiscal woes. He’s also hoping legislators have heard his words of desperation and will consider a funding change.
“The T’s poor. It’s not a secret,” he said.