Senator Clark Weighs in on Proposed MBTA Cuts

With public hearings regarding the MBTA’s for fare hikes and service cuts getting underway last week, elected officials throughout the area are weighing in with their thoughts on the plans that could potentially devastate public transportation in Reading and surrounding communities.

With Reading facing the possibility of losing both it’s bus lines, Reading Patch spoke with State Senator Katherine Clark (D-Melrose) about the controversial proposals and what can be done to stabilize the vital transportation authority going forward.

The two proposals, announced earlier this month, are in response to a projected budget shortfall of $161 million dollars—owing partly to debt passed on to the MBTA from the Big Dig project.

While something clearly needs to be done to assure the financial position of the MBTA, Sen. Clark, among other legislators, feels that the solution should be less disruptive to those whose livelihoods depend on transportation services.

“The MBTA needs to close a large budget gap. While I understand the reality, the combination of service cuts and fare hikes, for Reading, would be very detrimental to the public and to the town,” said Clark. “Especially the service reductions; two of the bus routes proposed for elimination, the 136 and 137, are among the most utilized for Reading residents. Obviously, this is going to present a huge problem for people.

“We have to find that balance between the budget and sustaining service for the Reading community.”

The cuts, she said, threaten to hurt those who can least afford it and “harm an already fragile economic recovery.”

Things Afoot on Beacon Hill

Clark, a resident of Melrose, is not the only local legislator .

“These changes are unacceptable,” said Rep. Jim Dwyer in an interview with . "Please know that I am in strong opposition to the rate hikes and the cuts in services," said Rep. Dwyer. "The negative impacts that will incur strongly outweigh any benefit that the MBTA would gain by instituting this plan."

Sen. Clark, who represents the Middlesex and Essex districts, also spoke about the efforts of lawmakers to find alternatives to the proposed service cuts.

“I think we’re all looking for an alternative solution, but their isn’t an easy one that’s out there,” she said. “We raised the sales tax a few years ago to help the T and put off a fare increase ... We have to look for a long term solution.”

The Senator also acknowledged the possibility of raising the gas tax to help fund the T, but said the current economic climate would make such a move tricky.

“It’s a difficult time to talk about raising taxes,” she said. “That’s the real dilemma with how to fund public transportation. People say: ‘why should we fund public transportation that we don’t use?’”

In addition to raising the gas tax, another potential source of funding for the MBTA could come from the casino bill recently signed into law by Governor Deval Patrick.

With casinos projected to generate some $400 million in revenue for the state, some of which is already slated to go to the MBTA, Clark said Beacon Hill politicians needs to take a look at diverting some of the 25 percent of casino revenues and 40 percent of slot machine proceeds that will come back to the state and its cities and towns towards funding the ailing authority.

“Should we be looking at a bigger cut of casino revenues to fund the the T?” She asked rhetorically. “I think we definitely need to be looking at it.”

How We Got Here

It’s not solely the nearly $2 billion in debt that was assigned to the MBTA as a result of the Big Dig that has the Authority in such dire financial straits, but also the poorly thought out funding scheme—known as “forward funding”—that was supposed to ensure the T’s financial future.

Prior to July 1, 2000, the MBTA would simply present a bill to the legislature at the end of the year for all costs above collected revenue, and be reimbursed in that amount. But on that date, a dedicated revenue stream was dedicated to fund the Authority, consisting of amounts assessed on cities and towns within the MBTA ridership and a dedicated 20 percent share of state sales tax. Known as “forward-funding,” the plan, on paper at least, was supposed ensure that the T would stay within its budget—dictated by these dedicated revenue streams. The one problem, and it’s a whopper, is that the plan assumed a 3 percent rate of growth in terms of tax revenues from year to year—not entirely unreasonable, as tax revenues had grown by more than that throughout the 1990’s, However, the plan failed to account for rises in healthcare, fuel or energy, among others.

Also, between 1988 and 2006, the MBTA had been the nation’s fastest growing public transportation authority, while Greater Boston was among the slowest growing metropolitan areas.

According to a story in Boston Magazine, lawmakers never envisioned forward-funding as a permanent fix, and according to an anonymous legislative aid cited in the piece, never properly vetted the underlying assumptions of the bill.

Since 2000, sales tax revenue has never approached the rate of growth anticipated by those who shaped forward-funding, and, in recent years, has actually decreased. Meanwhile, MBTA operating costs have risen by roughly 5 percent per year, according to Boston Magazine.

With such a gap between revenues and costs, it should come as little surprise that the MBTA is—by a wide margin—the nation’s most indebted transportation authority. With a $5.2 billion principal, spiking to $8.1 billion with interest factored in, debt service accounts for a whopping 25 percent of the annual MBTA budget.

“Over time, this has proven to be an undesirable way to fund something as important as public transportation,” said Sen. Clark. 

She and her fellow legislators will now look for other ways to shore up the MBTA’s finances.

“These cuts will put a toll on people,” she said. “We have to find a way to help the T without shifting the burden onto working people.”