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Contracts for MBTA expansion projects should be suspended for the rest of the year and Gov. Charlie Baker should be given short-term control over the embattled transit agency until a more thorough rescue plan can be developed for the T, a prominent think-tank recommends.
Ahead of a report from the governor's task force expected by the end of the month, the Massachusetts Taxpayers Foundation on Wednesday issued its own analysis of the MBTA's financial and operational woes.
While the report finds that much is unknown about the depth of the problems that the T exposed by this winter's severe weather, the foundation is calling for a series of steps it views as critical to stopping the situation from getting worse.
"We know the T is broken, but we don't know just how broken," said MTF President Eileen McAnneny in a statement. "We also know that past reform efforts have not brought stability. Despite understandable public frustration, we should resist seemingly simple fixes until we have a far clearer and more accurate assessment of what needs to be fixed, which the T itself is unable to provide at this time."
The 60-page report recommends that state lawmakers withhold additional contract assistance for the MBTA until the agency can produce an up-to-date list of "state of good repair" projects. The MBTA recently acknowledged that the backlog of maintenance projects had more than doubled since 2009 to about $6.7 billion.
The report also recommends an audit of the MBTA's maintenance protocols, an independent financial audit, a two-year moratorium on the Pacheco Law, which limits the agency's ability to hire outside contractors, and a reexamination of the MBTA's governance structure.
"What happened this winter was not simply a meteorological fluke that disrupted the T's operations - it was a stress test that brought to light underlying financial, managerial, and structural weaknesses," the report stated.
In 2009, the Legislature enacted new laws consolidating state transportation agencies and putting them under the control of an independent board.
The foundation faulted the current board with too often being "resistant to external examination and proposals for the change." The report recommends that Baker be given control over the MBTA board in the "short-term" and the authority to choose the T's next general manager.
Baker has said he hopes to have influence over the selection of a new general manager after GM Beverly Scott announced her resignation last month, but has also acknowledged that his control is limited with just one appointee, Transportation Secretary Stephanie Pollack, on the board.
Other recommendations include eliminating Social Security eligibility for T employees to align with the state pension system, eliminating binding arbitration and requiring full disclosure of pension system finances.
The report — titled "T: The End of Its Line" — attributed the performance failures of the T in the face of record snowfall to a "stark mismatch" between spending and revenue, old equipment, an inoperative asset management system, little public accountability and poor transparency.
"What happened this winter was not simply a meteorological fluke that disrupted the T's operations - it was a stress test that brought to light underlying financial, managerial, and structural weaknesses."
After House Majority Ronald Mariano last week suggested it would be "crazy" to just give the T more public funding, MTF wrote: "Just as infrastructure is only part of the problem, additional revenues are only a part of the answer. Before the state commits any more revenues to the MBTA, it must determine the full size and scope of the system's challenges."
The report states that while the MBTA anticipates its three major revenue sources to grow 2 percent annually over the next five years, operating expenses are projected to grow at a 5 percent annual clip.
With fares, local assessments and dedicated sales tax revenues capped by law, MTF said the state will be on the hook for $200 million in fiscal 2016 and as much as $360 million in fiscal 2019 to balance the T's budget.
With $5.4 billion in outstanding debt, the report found that the T has slowed the growth of borrowing costs by restructuring its debt, helping in the short-run but making it harder to borrow and invest in infrastructure over the past decade.
Baker's annual budget for fiscal 2016 included a 20 percent increase in funding for transportation, including an additional $64.5 million for the MBTA. Baker said the increase was "not a blank check" and would be a placeholder until his special task force reports back with recommendations at the end of the month.
This article was originally published on March 11, 2015.
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