Fares, Fiscal and Management Control Board, MBTA, Taxes and Budget Issues

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MBTA OFFICIALS CRACKED open the door to a fare hike and increases in parking fees by the beginning of next year as the cash-strapped agency, despite cuts and privatization efforts, continues to face a stubborn $111 million projected deficit to start the next fiscal year.

T budget officials, at a meeting of the Fiscal and Management Control Board Monday, showed the panel cost increases from areas such as pension contributions, commuter rail management contract, collective bargaining agreements, and debt service will add about $88 million to an existing $23 million deficit if no changes are made. The $111 million total comes after factoring in a projected $29 million increase from sales tax revenues and a hike in local assessment to communities.

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The board, which can only raise fares every two years by law, last increased fares in 2016 but promised at the time not to raise them again until at least January, 2019. Board Chairman Joseph Aiello asked MBTA officials to come back in March with some outline for raising fares and parking fees.

MBTA General Manager Luis Manuel Ramírez said his goal is to reduce spending below revenue but acknowledged that might be difficult to do in time for the fiscal board to make a decision by April 15, which is when the agency’s budget has to be submitted to the Legislature.

“What we’re going to do is take a look at all the things we can to improve, not only productivity, but also ways to reduce overall spending,” Ramírez said after the meeting. “My goal is always to have our spending rate be below revenue growth.”

In 2016, amid a storm of opposition, the T raised fares an average of 9.3 percent, with monthly passes bearing the biggest increases. That was for a full fiscal year and brought in about $43 million. The agency has not raised its parking fees since 2011. Among the ideas broached at the meeting is “dynamic pricing,” which would levy higher parking fees based on busier days or locations. But the fiscal board is also handcuffed by a statute that prohibits them from raising fares more than 7 percent.

“I think we are limited in terms of the percent that we can do, and the timing that we can do,” Ramirez said. “I think as a policy question for the board, we certainly want to discuss what that means.”

According to T officials, the agency was sitting on a $23 million structural deficit for the 2017 calendar year. The projected deficit for fiscal 2018 was $30 million, a number that could still be hit if no changes are made.

Baked into next year’s budget is a $5 million increase in pension contributions; $12 million to commuter rail operator Keolis, which includes a $7 million contractual increase and $5 million for additional services such as the new Foxboro commuter trains; $49 million in incremental debt service; $6 million for increases in contracted services such as maintenance and cleaning; and $8 million for wage hikes from collective bargaining agreements. The agency is also mandated to absorb $27 million form shifting employees off the capital budget onto the operating budget unless the Legislature approves an amendment to postpone that.

Meet the Author Jack Sullivan Senior Investigative Reporter , CommonWealth About Jack Sullivan Jack Sullivan is now retired. A veteran of the Boston newspaper scene for nearly three decades. Prior to joining CommonWealth, he was editorial page editor of The Patriot Ledger in Quincy, a part of the GateHouse Media chain. Prior to that he was news editor at another GateHouse paper, The Enterprise of Brockton, and also was city edition editor at the Ledger. Jack was an investigative and enterprise reporter and executive city editor at the Boston Herald and a reporter at The Boston Globe. He has reported stories such as the federal investigation into the Teamsters, the workings of the Yawkey Trust and sale of the Red Sox, organized crime, the church sex abuse scandal and the September 11 terrorist attacks. He has covered the State House, state and local politics, K-16 education, courts, crime, and general assignment. Jack received the New England Press Association award for investigative reporting for a series on unused properties owned by the Catholic Archdiocese of Boston, and shared the association's award for business for his reporting on the sale of the Boston Red Sox. As the Ledger editorial page editor, he won second place in 2007 for editorial writing from the Inland Press Association, the nation's oldest national journalism association of nearly 900 newspapers as members. At CommonWealth, Jack and editor Bruce Mohl won first place for In-Depth Reporting from the Association of Capitol Reporters and Editors for a look at special education funding in Massachusetts. The same organization also awarded first place to a unique collaboration between WFXT-TV (FOX25) and CommonWealth for a series of stories on the Boston Redevelopment Authority and city employees getting affordable housing units, written by Jack and Bruce. About Jack Sullivan Jack Sullivan is now retired. A veteran of the Boston newspaper scene for nearly three decades. Prior to joining CommonWealth, he was editorial page editor of The Patriot Ledger in Quincy, a part of the GateHouse Media chain. Prior to that he was news editor at another GateHouse paper, The Enterprise of Brockton, and also was city edition editor at the Ledger. Jack was an investigative and enterprise reporter and executive city editor at the Boston Herald and a reporter at The Boston Globe. He has reported stories such as the federal investigation into the Teamsters, the workings of the Yawkey Trust and sale of the Red Sox, organized crime, the church sex abuse scandal and the September 11 terrorist attacks. He has covered the State House, state and local politics, K-16 education, courts, crime, and general assignment. Jack received the New England Press Association award for investigative reporting for a series on unused properties owned by the Catholic Archdiocese of Boston, and shared the association's award for business for his reporting on the sale of the Boston Red Sox. As the Ledger editorial page editor, he won second place in 2007 for editorial writing from the Inland Press Association, the nation's oldest national journalism association of nearly 900 newspapers as members. At CommonWealth, Jack and editor Bruce Mohl won first place for In-Depth Reporting from the Association of Capitol Reporters and Editors for a look at special education funding in Massachusetts. The same organization also awarded first place to a unique collaboration between WFXT-TV (FOX25) and CommonWealth for a series of stories on the Boston Redevelopment Authority and city employees getting affordable housing units, written by Jack and Bruce.

Chief Administrative Officer Michael Abramo pointed out to reporters after the meeting that while the authority is facing a $111 deficit, it could have been much worse. Since the fiscal board was formed in 2015 and changes made in MBTA administration, spending has been cut by more than $261 million and, with the fare increase, revenues grew by $44 million.

“Without those changes, we would be looking at a deficit of nearly $500 million,” Abramo said.

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