MBTA Budget Contains Record Deficit

The MBTA board of directors unanimously approved the agency's fiscal 2010 budget. It contains a $160 million deficit. Fare hikes and service cuts could be next.

By law, MBTA General Manager Daniel Grabauskas has to present a balanced budget. Grabauskas says for the coming fiscal year that was impossible. The T expects total revenue, primarily from the state sales tax, to fall and operating expenses to rise. On top of that, the T will have to pay more than $440 million on its $8 billion debt, making debt service 30 percent of the T's budget.

Instead of presenting the T board with cuts to balance the books, Grabauskas submitted a budget with a single $160 million line item called "other revenue." That other revenue doesn't exist yet. Grabauskas says it won't, unless the legislature approves an increase in the state gas tax.

DANIEL GRABAUSKAS: What we did was, we're giving respect to the legislative process in the hopes and beliefs that they're going to act very quickly. If they don't, we will be ready for whatever contingency.

Those contingencies include raising fares, possibly by as much as 30 percent, and cutting service. Such actions appear inevitable to Paul Regan. He's executive director of the MBTA Advisory Board, which represents cities and towns and has final say on the T's budget.

PAUL REGAN: We've recommended cuts in the past. We're not afraid to make those kinds of cuts. And we're going to have a long and serious discussion on how realistic it is to fill that $161 million gap.

Regan says the clock is now ticking for the T. The advisory board has 90 days to approve the budget. What the legislature will do in that time is unclear. Yesterday, Senate President Therese Murray reiterated that the legislature would have to pass comprehensive transportation reform before she would support a gas tax increase.

Transportation Secretary James Aloisi argues the fiscal crisis at the T requires simultaneous action on reform and revenues.

JAMES ALOISI: We know that we have to keep faith with the taxpayers and we're going to initiate very tough and difficult reforms. But we also have to keep faith with our customers and I don't think anyone wants to see our customers lose service that's important for their mobility -- to get to their jobs and to get to their schools. So we're going to do what we can to maintain that service.

For MBTA customers, the choice of balancing the budget with either fare hikes or service cuts is a difficult one. Chief Koofreh, who lives in East Boston, says he doesn't want to pay more, but that he couldn't get to his job in Cambridge without the T.

CHIEF KOOFREH: It will impact me as an individual, because there is certain areas that it's only the MBTA that can actually get there. Then if they are not there, you really suffer. So they have to explore other means of enhancing their finances.

But MBTA officials stress there are no other options and that, without additional state revenues, riders could face a more expensive and diminished transit service.