MBTA looking at years of costs outpacing revenue

Attention T riders: Agency officials expect expenses to outpace revenues until 2027. This darkens an already-grim financial picture.

1/24/2022 1:48:00 AM

Attention T riders: Agency officials expect expenses to outpace revenues until 2027. This darkens an already-grim financial picture.

Darkening an already-grim financial picture, MBTA officials on Thursday projected that the agency's expenses will grow faster than revenues until fiscal year 2027, at which point ridership still will not bring in as many dollars as before COVID-19 hit.

five-year pro forma outlookthat MBTA Chief Financial Officer Mary Ann O'Hara presented expects that the T's expenses will pile up more quickly than its income in FY24, FY25 and FY26 before the trend turns in FY27. She attributed the disparity to the costs associated with implementing new services such as South Coast Rail and the Green Line Extension.

(Courtesy MBTA)A sharp decline in ridership during the COVID-19 pandemic shellacked the T's finances, leaving officials to use one-time sources such as federal American Rescue Plan Act dollars to close the gaps. O'Hara said as much as 23% of the total expenses the MBTA will make in FY22 and up to 13% of its projected expenses in FY23 are supported entirely by one-time revenues.

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Public transportation is a public service, this isn't a problem. If the MBTA has funding issues either raise the funding through taxes or divert it from something useless like the police department. Inefficiency will do that to any business. Worse, they don't care. Public transit fees are regressive, hitting workers and not the corporations they work for. Make the MBTA free and tax the corporations that benefit from the influx of skilled labor.

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The latest five-year pro forma outlook that MBTA Chief Financial Officer Mary Ann O'Hara presented expects that the T's expenses will pile up more quickly than its income in FY24, FY25 and FY26 before the trend turns in FY27. She attributed the disparity to the costs associated with implementing new services such as South Coast Rail and the Green Line Extension. (Courtesy MBTA) A sharp decline in ridership during the COVID-19 pandemic shellacked the T's finances, leaving officials to use one-time sources such as federal American Rescue Plan Act dollars to close the gaps. O'Hara said as much as 23% of the total expenses the MBTA will make in FY22 and up to 13% of its projected expenses in FY23 are supported entirely by one-time revenues. Ridership has been slow to return, most recently hovering just above 65% of pre-pandemic levels on buses and between 45-50% of pre-pandemic levels on the rail system. MBTA officials do not expect that to change quickly. In the most pessimistic model that O'Hara presented Thursday, the agency would bring in 49% of pre-COVID fare revenue in FY23 and 68% in FY27. Even the most optimistic version anticipates only 93% of pre-pandemic fares — still not a full recovery — by FY27. (Courtesy MBTA) "This five-year plan, and it is good to think out to the future, presents a serious financial challenge to the T and to this board," MBTA Board of Directors Chair Betsy Taylor said following the presentation."It is hard to see how we can survive long-term with expenses growing faster than revenue. It shows how important it is to look at the operating costs of expansion projects. And finally, given this operating challenge, it raises to me the concern of how we will continue to find money to fund the needed safety and maintenance requirements of the T going forward as well." O'Hara also said officials are exploring the idea of transferring $500 million in currently available one-time operating funds to the capital fund to"put money to use right away for the benefit of future service and safety," forecasting additional discussion of the topic in January. -