'Everything Is On The Table' As MBTA Tries To Close At Least $308 Million Budget Gap

The MBTA is looking at ways to save money and bring in revenue in an effort to close an expected budget gap of at least $308 million due to the coronavirus pandemic.

The transit agency is projecting this budget gap for fiscal year 2022 with the assumption that 80% of fare revenue will return by September 2021. If ridership returns at lower levels, the T's projected budget deficit could be as much as $577 million. The agency may also face further deficits for the next few years, officials said, and potential remedies could include future layoffs or fare hikes.

"We're facing a budget crunch that is catching up to us," MBTA General Manager Steve Poftak told reporters at a briefing Monday.

"This is a transit problem, not an MBTA problem," Poftak added, noting that other transit agencies are facing similar fiscal challenges.

The T aims to save $400 million over the next two fiscal years, with a goal of securing $150 million of that this current fiscal year.

To do that, the transit agency sought approval Monday from its Fiscal Management and Control Board to pursue a two-year budgeting process that will allow the agency to use its current budget to make any preparations for fiscal year 2022. The board approved this request Monday.

The T is also looking to reallocate federal funds from its capital budget to its operating budget, which it says will save about $80 million this fiscal year and as much as $300 million next fiscal year.

Transit officials are also looking for some help from the Legislature. The House and Senate versions of a transportation bond bill are currently being reconciled in committee and would allow the MBTA to use around $120 million to pay for capital salaries. Transit officials also hope lawmakers will give them the ability to apply these funds retroactively to cover the full two-year period.

The MBTA is also working across the agency to find other ways to save money or generate revenue. Poftak said the agency will be monitoring and controlling its spending, particularly overtime. Transit officials did not indicate there would be any immediate layoffs or fare increases coming, but both are a possibility down the road.

"I think at this point, everything is on the table," Poftak said.

Transportation Secretary Stephanie Pollack said the fall season will be critical for the T. She said the agency will know more then about what federal and state resources it will receive, and will have a better understanding of ridership levels, especially as some schools and colleges reopen.

"So in year one, I don't think we are looking at the need for changes in head count," Pollack said during the briefing. "Certainly not service changes because those have to go through a process. Definitely not fare changes."

But those measures — job cuts, fare increases and service changes — could be a possibility next fiscal year. Pollack said what happens this fiscal year will determine how the T approaches its budget gap next fiscal year.

Ridership continues to be only a fraction of what it was before the pandemic, significantly impacting the agency's fare revenue — which accounts for about a third of its total revenue.

The T currently carries about 250,000 trips a day, Poftak said. And many of those riders are essential workers who rely on the T.

"So, I think our challenge is how do we manage our budget to serve these customers and other customers who will return over time in this period of budget uncertainty," Poftak said. "And what we put forward today, I think, is a responsible plan that allows us to plan for this future."