MBTA Part Of National Transit Funding Crisis

The MBTA faces a  $160 million deficit and on Thursday it will present its spending plan for next year to the agency’s Board of Directors.

T officials say closing that gap requires new revenues as well as service cuts. One possible scenario calls for slashing trolley, heavy rail and bus service each by 50 percent, according to Paul Regan of the MBTA Advisory Board:

PAUL REGAN: Basically we're talking about taking the MBTA and turning it into a peak service only. And, in a city like Boston, when you have a high transit dependent population, we're basically stranding them.

So can Massachusetts keep the T on track? WBUR's Meghna Chakrabarti looks beyond the state for tips from transit agencies across the nation.

A 50 percent reduction sounds drastic. You’re thinking maybe it’s just a scare tactic and they’ll really never do it, right? Well, in St. Louis, Missouri, they are.

TOM SHROUT: This will be a cut of about 40 percent of the bus service and about 30 percent of the rail service.

And it goes into effect on March 30th, says Tom Shrout. He's the executive director for Citizens for Modern Transit, a transportation advocacy group in St. Louis.

SHROUT: There's a perimeter highway in the greater St. Louis metropolitan region, like there is in many regions in the country, and basically there will be no transit service beyond the perimeter highway in the St. Louis area.

Shrout says the cuts were forced by a $50 million budget deficit the St. Louis metro couldn't fill with flat revenues from its main source of funding — city sales tax receipts.

In Massachusetts, more than half of the T’s operating budget comes from the state sales tax.  In St. Louis, Shrout says the metro is a system in mourning.

SHROUT: They're putting bags over the bus stops that reads to the effect, a bus will no longer stop here due to lack of funding, or words to that effect.

But surely St. Louis is an extreme case, right? Wrong.

KEVIN ORTIZ: In December, our board approved what has been characterized here as a doomsday budget.

That's Kevin Ortiz, of the nation's largest public transit provider, the Metropolitan Transportation Authority in New York.

ORTIZ: That includes significant fare increases in excess of 23 percent and severe service reductions as a result of a deficit the MTA faces in 2009 of approximately $1.2 billion.

New York is considering eliminating two subway lines, reducing bus stops and curtailing off-peak service. Ortiz says the situation deteriorated to this point for two reasons: one, like the T, the MTA carries a crushing debt load. And two, unlike the T, New York’s public transit is funded in part by real estate transaction taxes, which, in this economy, dropped by more than 40 percent last year alone. But there could be some relief, Ortiz says. Right now, the New York state legislature is debating fresh funding proposals.

ORTIZ: That plan includes new payroll tax on employers in the 12 county region that the MTA services, in addition to new tolls on the East River crossings into Manhattan that are currently free.

Here in Massachusetts, payroll taxes and new tolls are not on the table for the T.

And the very idea that public transit could rely on that kind of dedicated funding would be a dream come true down in Washington, says the DC Metro’s Steven Taubenkibel.

STEVEN TAUBENKIBEL: It all comes from the taxpayer and local jurisdictions.

(to Taubenkibel) So you're kind of hat in hand, every year.

TAUBENKIBEL: That's it. That's it. It will not get any easier, because we certainly expect for 2011 that we will be in the same position again — we are anticipating another shortfall.

Taubenkibel says fares and local subsidies did not cover this year's $176 million budget shortfall. The Washington Metro eliminated 900 jobs to close that gap, but it still carries a $29 million deficit. Taubenkibel says the Metro board of directors is meeting this week to decide whether or not to raise fares and cut service.

TAUBENKIBEL: The fact is that as we've carried more people, our costs have gone higher. Costs for electricity, fuel, health insurance. Everything has gone up. So while we're carrying more people, there are costs that are greater on a day to day basis.

It’s an irony also faced by the T: Record ridership and record deficits. So, Taubankibel says, Boston is not alone.

TAUBENKIBEL: No, it’s not. Every transit agency in the country is feeling the pain.

Paul Regan says that's the biggest lesson here. Regan is executive director of the MBTA advisory board, the independent advocate for cities and towns served by the T.  And he believes the agency’s bureaucratic inefficiencies and employee benefits are not the only things in need of reform. Regan says the fundamental financing strategy for mass transit as a whole needs a major overhaul.

REGAN: Other transit agencies are looking for a variety of ways to finance their transit systems. They don't want to be completely reliant on one source of revenue. Because if something happens to that source of revenue, they're out of luck.

Which is what happened here in Massachusetts with state sales tax receipts, as it did in St. Louis with local taxes. In DC subsidies flatlined. So, Regan says, the longterm lesson for the state and the MBTA is to look beyond the sales tax to other sources of revenue as they are in New York with the proposed tolls and payroll taxes.

REGAN: And even with that diversification, they're still finding themselves in a very tough fiscal situation.

And so does the T. Regan says if the Massachusetts gas tax is raised in support of public transit, that would be a start. But even that may not be diversification enough.