The MBTA Board unanimously approved a $2.35 billion preliminary budget for fiscal 2022 on Monday, advancing a spending plan that fully funds pre-pandemic levels of transit service and hundreds of new positions without fare increases or staff cuts.
The Fiscal and Management Control Board voted 5-0 in support of the budget, which calls for spending about 3% more than the revised $2.29 billion fiscal 2021 budget as the agency works to juggle massive financial and operational impacts from COVID-19 and the prospect of increasing demand.
The proposed budget does not plan for any fare increases, layoffs or furloughs, nor any reallocation of funding from capital projects to operations. MBTA Chief Financial Officer Mary Ann O'Hara said the budget deploys "very modest expense growth."
MBTA officials balanced the spending plan by relying on about $605 million in one-time revenues. About $240 million of that is federal funding drawn from three different COVID-19 relief packages, while the other $365 million will come from an internal savings fund the T built up during the pandemic by cutting costs.
The T, which typically drew about a third of its revenue from fares before the COVID-19 pandemic, has grappled with a severe decline in ridership during the crisis like many other transit agencies.
Ridership remains low more than a year into the public health crisis at about 26% on rapid transit, but it has been trending upward. MBTA General Manager Steve Poftak said the week of April 12 saw the highest ridership since the pandemic began, surpassing the previous peak observed in late September and early October.
MBTA budget-writers forecast collecting $200 million in fare revenue in FY22, a 39% increase over FY21.
In fiscal year 2019, the last full spending cycle unaffected by the pandemic, the T projected to collect more than $664 million in fares.
After implementing two rounds of service cuts in January and March, the T is now racing to restore service in response to criticism from the congressional delegation and others. The draft FY22 budget includes enough funding to run pre-COVID service, but MBTA officials say it will take some time to build the workforce back up to a sufficient level to meet that need after vacated positions went unfilled during the pandemic.
The preliminary budget plan calls for adding more than 900 more employees to the MBTA's depleted workforce, including 166 positions to support operation of Green Line Extension service in Somerville and Medford when that expansion launches at the end of 2021.
It also funds 125 additional operations safety positions, fulfilling the second batch of hires targeted in the wake of a report criticizing the T's safety culture. Those plans were delayed during the COVID-19 pandemic.
So far, the MBTA has received nearly $2 billion in stimulus from the federal government across multiple packages.
By the end of FY22, about 65% of that federal aid will have been spent, according to figures presented Monday. Early projections indicate about 90% of the funding will be expended by the end of FY23.
The preliminary budget will now go to the MBTA Advisory Board, an independent group that represents the interests of cities and towns served by the T, for review and feedback. FMCB members will likely vote on the final budget in early June.