Mass. Senate Approves T Bailout, Rejects Bid For Loan, Control Board

The Senate on Tuesday approved a plan to deliver $51 million in bailout funds to the MBTA during a tense debate as lawmakers vented their anger and frustration with T officials for failing to put the transit agency on a self-sustaining path.

The bailout funds, sought by Gov. Deval Patrick and already approved by the House, are designed to help the agency meet spending needs not covered even with an average 23 percent fare hike set to take effect on July 1, along with parking fee increases and service reductions.

The Senate voted 26-9 to approve the short-term fix for the T’s financial woes, with a debate looming on long-term funding next year. Senators engaged in an extended debate over whether to put the agency under a state finance control board, and make the funding an eight-year loan, rather than an appropriation.

Under an amendment pushed by three Senate Republicans and Sens. Gale Candaras and James Welch, a pair of western Massachusetts Democrats, a control board would have taken over for the current MBTA Board for at least three years.

Senate Minority Leader Bruce Tarr called the amendment, rejected without a recorded vote, a choice between continuing to making “sporadic contributions scavenged” from other parts of the state budget, or fundamentally changing the financial management at the T.

Candaras predicted the Legislature would find itself in an identical position next year if it continues to hand out “blank checks” to the MBTA, and Sen. Michael Knapik called the bill a “bitter pill to swallow” for residents in western Massachusetts and a “sugar fix” for the T.

At a pre-session press conference, control board supporters said the MBTA has resisted management reforms for years, is among the most debt-ridden and heavily subsidized agencies of its type, and is pressing for expensive service extensions despite three major taxpayer bailouts required since 2000.

Candaras, during debate in the Senate, said the MBTA was the most-heavily subsidized transportation system in the country, receiving a 60 percent subsidy from the state. She said the New York City transit system receives 40 percent of its funding from the state; New Jersey 34 percent; and the Washington Metropolitan Transit Authority in D.C. 17 percent.

“Nobody comes up to 60 percent, only the MBTA. Of the 10 largest transit authorities in the United States, only the MBTA can’t get it done,” Candaras said.

The T secured a big chunk of the state's sales tax revenues in 2000, another $160 million infusion in 2009 and is now seeking a $51 million to balance its budget for the fiscal year that starts July 1.

“Our message is: no more money unless something changes,” said Senate Minority Leader Bruce Tarr.

"Something has to be done," Sen. Robert Hedlund (R-Weymouth) said before the vote. "At some point this routine has to end." He added, “A fresh perspective from the management level is needed.”

Sen. Patricia Jehlen (D-Somerville) said her colleagues were laying too much blame at the feet the MBTA. Jehlen said growth in sales tax revenues promised as part of the 2000 forward funding scheme has been slower than projected while health care and energy costs have risen more quickly than could have been anticipated.

Sen. Thomas McGee, the Senate Transportation Committee chairman, also urged his colleagues to allow for the debate over long-term transportation financing to play out before enacting a control board. House and Senate leaders have identified a fix as their top priority in the next session.

Hedlund criticized the T for pressing a $1.3 billion Green Line extension plan and a $2 billion extension of commuter rail service to New Bedford and Fall River, citing a lack of financing plans and saying those projects are unaffordable given the T’s fiscal condition, management and level of indebtedness – “the most indebted transit authority in the world.” Hedlund cited a years-long “leadership vacuum” regarding the MBTA and transportation agencies in the legislative and executive branches.

Welch said a state control board put in place in Springfield had stabilized that city's rocky finances and he hoped a similar board would be able to do the same at the MBTA. “It wasn’t easy. It wasn’t certainly something that people were jumping for joy to see happen but the reality was it was needed,” said Welch.

Expressing support for a new approach to MBTA management, Tarr predicted the T would be back next year seeking a bailout of as much as $100 million. He called the control board a “transitional entity” to address T finances. “The current board has been unable to grapple completely with this issue,” said Tarr.

Tarr said he favors a focus on MBTA savings initiatives before consideration of new or higher taxes to pay for transportation initiatives and before the T advances expansion plans. Patrick administration officials recently included in federal filings a menu of higher taxpayer and motorist costs as financing options, but Gov. Patrick called the ideas “hypothetical” and there’s no consensus around long-term fixes.

During debate on the bill, senators adopted an amendment requiring MBTA officials to inform lawmakers when they plan to go before federal transportation officials to discuss future projects. Tarr said the state is already struggling to meet the financial commitments of current expansion projects and questioned T officials for traveling to Washington, D.C recently to talk about additional projects.

“As we are struggling to meet the commitments we already have, those clever folks at the MBTA are thinking about the future. But they are not thinking about the present,” Tarr said.

Tarr said the MBTA should not be discussing future expansion projects he called “wishful thinking” without first discussing them with state lawmakers. Senate President Therese Murray agreed, voting in favor of the amendment that passed 38 to 0.

Sen. James Timilty (D-Walpole) offered an amendment - which he later withdrew - prohibiting the MBTA from undertaking any expansion projects without first conducting a study to look at how it would be paid for.

“At some point you can’t do everything that is on everybody’s wish list,” Timilty said. “When an agency is tone deaf, and doesn’t have the understanding that you can only do what you can pay for, we are going to come back on many instances to pay for this agency.”

The Senate rejected an idea advocated by Tarr that would have required the attorney general to review all projects T officials say they are mandated to build, including the Green line extension project that was mandated as the result of a court case as part of the Big Dig project. Tarr wanted the AG to “review all those things we perceive to be committed to,” to possibly take some projects off the to-do list.

“This requires the attorney general to say what is real, and what is not,” Tarr said before the amendment failed.