T board approves $2.72B budget amid financial woes and recovering ridership

MBTA officials warned of a "sobering" financial outlook for the transit agency but voted Thursday to jack up spending by nearly 7% in a $2.72 billion annual budget plan.

The T's fiscal 2024 budget relies on hundreds of millions of dollars in one-time funding. Much of the roughly $175 million in new spending targets safety improvements ordered by the federal government, including efforts to build out the T's shorthanded workforce.

For every dollar in new spending, about 50 cents will go toward safety and training investments, MBTA Chief Financial Officer Mary Ann O'Hara said at the board's meeting Thursday.

The Legislature every year steers substantial amounts of money to the T by dedicating a share of the state sales tax to the authority. The T also receives funds from the communities it serves and from fares, a revenue source that has sagged as the service-challenged agency has lost many of its riders.

Still, leaders have been steadily boosting the T's spending in recent years.

But ridership across some sections of the T is ticking back up, O'Hara said. Though the system is still serving fewer passengers than before the pandemic, modes other than the subway hit their highest ridership in three years in the first quarter of this calendar year.

Commuter rail use was at 80% of pre-pandemic levels in the quarter, and bus ridership rose to 79%. Use of ferries and the T's paratransit service, The Ride, also climbed.

O’Hara said the increases will help boost fare revenue, and she's hopeful ridership will continue to rise in the coming months. Overall, ridership including the subways is at about 68% of where it was pre-pandemic.

Brian Kane, executive director of the MBTA Advisory Board, in an interview said it was good news to see ridership increasing. But, he doesn't expect volume to ever go back to what it was in February 2020.

"It's going to be a new normal," he said. "And that new normal will have transit ridership back because people do need to move around the region."

While hybrid work has become the norm, traffic has returned to its old intensity at least a few days a week. "Congestion on our major highways in and around Boston is jammed. It's clogged, it's doesn't move," Kane said. "And so the T presents a viable alternative — if and when it is available and perceived to be safe, reliable and frequent."

The FY24 budget adds 644 new safety-related jobs at the agency, representing about two-thirds of the hiring MBTA officials want to make next year, and also calls for investments in personal protective equipment, engineering, recruiting and project management.

Counting all departments and not just those that are tied to safety initiatives, MBTA officials budgeted for more than 7,600 employees in the fiscal year that starts July 1, an increase of more than 960 above the FY23 budget and well above the roughly 6,500 workers the T had on staff at the end of March.

The budget approved Thursday carries the third-largest increase in the past five years, lagging behind the 8.3% growth in FY21 and the 8.4% growth in FY22, according to MBTA figures.

By the start of fiscal 2025, the MBTA is "going to need more money" beyond what Beacon Hill has already appropriated to continue addressing safety problems, O'Hara, the T's financial chief, said at the board meeting. And the T will face a "big issue" that same year balancing its budget, she said, once the last batch of pandemic-era federal aid has been exhausted.

"Pretty sobering to see these numbers every time we see them," said MBTA Board member Thomas McGee, a former senator who co-chaired the Transportation Committee.

With reporting from WBUR's Andrea Perdomo-Hernandez and Chris Lisinski of the State House News Service.