So we are not alone in our transit woe. Yet, as far as solutions go, our political masters seem to be behind the curve. Transit issues dominated the legislative session this year in New York, where their MTA was braced to impose drastic service cuts and fare hikes before their legislature passed a mega-tax bill to bail their ailing network out. Their approach stands in stark contrast to the debate on Beacon Hill. Whereas our legislature only wants one tax – the sales tax – to solve all our fiscal problems, the New York MTA bailout bill included a payroll tax paid by employers in the surrounding region, fees on drivers and vehicles, a taxi surcharge, and a new 5% tax on car rentals. I’m not arguing more taxes are better but New York, which is dealing with a fiscal crisis even worse than ours, did see the merit in dedicated solutions to transit outside of addressing the overall fiscal crisis. In Massachusetts, our legislature, in its political wisdom (i.e. in wanting to avoid looking like they support many taxes) has decided to conflate the fiscal and transportation crises.
What is equally noteworthy about New York is that all these new taxes for transit passed in a New York Senate that only has a two-seat Democratic majority and only went blue for the first time in decades this term. To get it done required deals to be cut with a lot of dissenting Democratic Senators who will face opposition next year and yet they pulled the trick because they needed a fix and strong legislative leadership fought for it.
Compare that to our own Senate, where Senate President Murray has a 35-5 Democratic majority. She claimed she didn’t have the votes and made sure that today the Senate proved her point overwhelmingly. But Murray could get 21 votes for a bill abolishing cars if she wanted to. A gas tax increase would have been cake if she was so inclined. That vote today had less to do with the merits of the case for a gas tax increase and more to do with wanting to show Patrick he wasn’t going to get his way on this.
Looking again at New York, when the original outlines of the MTA bailout plan were unveiled, Mayor Bloomberg was there at the front backing solutions. Contrast that to our wildly popular Mayor Menino, who has been notably silent on the MBTA of late, and I do start to wonder whether anyone in our State really cares about transit.
But when looking at the problems besetting transit across America you can’t help but think it starts beyond State Houses and requires a federal solution. The Brookings paper cited above discusses how the $8.4 billion in federal stimulus funds devoted to transit will only cover capital. It goes on to discuss how federal rules in place since 1988 prevent federal funds from being spent on operating costs – the day-to-day expenses of running these expensive transit networks.
The irony is that as more capital gets poured into transit to expand systems, the more funds will be needed to operate those expanded systems in the future. So it’s high time to change the rules and get some federal funds to cover operating costs as well. Why not start with the stimulus money, much of which has yet to be dispensed. The stimulus package provided a lot of funds for health care and education operating budgets – to keep teachers and nurses from getting canned ostensibly. Why not some operating help for transit then – are not jobs on the T worth saving too (as long as the employees don’t use cell phones while driving trains)? Governor Patrick – now here is a reason for your Washington office to continue to exist.
But its gets worse when considering how Washington treats transit projects in general when compared to road and air travel infrastructure. Currently, the feds pick up 90 percent of the bill for new airports, 80 percent of the bill for road projects but only a meager 50 percent for mass transit. So the feds compound the capital/operating imbalance even further by forcing States/transit authorities to stump up for half the costs for building new transit projects, raising their own indebtedness, which then has to be settled through debt service payments that score as, you guessed it, operating expenses, for which the feds give nothing. Maybe the Carmen’s Union gets fat pension deals, but in the end, the problem with transit starts at the top of the government heap. Massachusetts needs solutions at home, thus the gas tax increase makes sense. But, its high-time Washington gave transit a better overall deal.
And hopefully, some ideas percolating in Congress could provide help soon. It seems that the Chairman of the House Transportation and Infrastructure Committee, Minnesota Democrat James Oberstar, left some scribbles around on what the next big transport bill could look like. Transit equity topped the list – meaning an equal percentage share of federal funds backing transport as for roads and airports. Hopefully this won’t just mean 50% for all, and hell, I’d like to see transit get 90 and roads get 50 for awhile.
No doubt though, the vested highway lobby will be out with knives to fend off this attack on their vaulted status. Thus, it would be good to see our Congressional delegation leading the charge for transit equity as the transport bill makes its way through the process. Congressman Capuano – you’re on the Committee and your one of Speaker Pelosi’s favorites so I’m looking at you in particular to get the ball rolling on this.
The transit crisis is of course man-made. Solving it is not rocket science. It just takes commitment and care. I’d like to see some Mass pols show us the commitment and care needed to make the difference.
Even if the Legislature approved Gov. Patrick’s gas tax plan today, it wouldn’t solve the agency’s long-term problems. It would prevent drastic service cuts and fare hikes in FY10 but do nothing to deal with the $8 billion in debt, the $2 billion in needed repairs and maintenance, or the operating deficit the agency will face in FY11.
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p>Two things need to happen to prevent a full-scale meltdown:
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p>1) The state is going to need to absorb a healthy chunk of the agency’s debt. The MBTA inherited $2 billion, and had another $2 billion foisted upon it by Big Dig commitments. Noone ever bothered to ask the MBTA if it could afford to pay for the projects — and the MBTA never spoke up and said it couldnt. This amounts to more than $150 million in annual debt service costs.
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p>2) There needs to be a major change in the culture at the MBTA. Sure, sales tax revenues have never matched what were promised under forward funding. But the MBTA has never lived within its means for a day. The forward funding plan estaimted 2.5% sales tax revenue growth and a corresponding operating budget growth of 2.5%. Sales tax revenue has been flat, but MBTA spending has increased on average of 5%. Doesn’t take an economist to realize that’s a bad thing.
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p>The MBTA has approved overly generous benefit packages (we’re talking $19k annually in health care costs), allowed its ranks to be filled with do-nothing patronage jobs, and hired pensioners back at $100k “consulting contracts.”
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p>Without those two things happening, the MBTA’s woes will never really be solved.
but do remember that they’re nowhere near the same in magnitude.
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p>Debt services are the largest budget item for the T, over 25% of expenses. That’s more than wages, it’s more than bennies, it’s more than energy and repairs.
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p>The T’s deficit is about $160M. Removing the $4 bil that you suggest in (1) would make the T just about solvent.
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p>So, while (2) is also important, it’s a far smaller percent of the problem. The 23 and out, the non-GIC health, the consulting contracts add up to peanuts when compared to the $150M in debt services the $4B requires.
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p>The 80/20 split doesn’t do the MBTA any good right now because they just can’t afford to take on the 20. The only projects the MBTA can afford to take on are ones which actually lower their operating cost more than the “20” increases their debt service costs, and those projects are few and far between. The lege must take back some of that debt if the T is ever to be sustainable.
The pensions and healthcare reforms are important, but the issue really is much broader that that. Everything needs to be on the cost-cutting table:
– get rid of the Pacheco Bill for the MBTA — competitive bidding could lower costs in certain areas.
– get rid of CBA work rules — the current labor work rules artifically inflate costs above and beyond what similar transit agencies pay. These don’t get a lot of attention but they lead to similar inefficiencies as the old domestic auto contracts.
– a “time out” on expansion other than the Green Line to Medford. Legislators love new projects but refuse to pay the necessary maintenance after the ribbon cutting.
– go into court on these settlements and tell the judges: We. Can’t. Pay. For. This. If they want to take the agency into receivership and inherit these problems, be my guest.
a) Given the state’s finances, CLF should be happy that the Green Line stays on track. We simply cannot afford other non-cost-justified projects like the Fairmount line and the Blue/Red connection.
b) The T has poured money into accessibility projects — State, Copley, Kenmore, low-floor cars. I do not mean to debate the merit of these projects; I simply say that in our current fiscal straits, we cannot afford them.
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p>And yes, fares will probably still have to increase. Everything needs to be on the table. Everyone’s ox needs to be gored.
but NOT with
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p>Look, here’s the deal: the state took on the requirements as part of a clean air solution. They’ve got to do it. They can NOT renege. Now, it would be reasonable in my opinion to have the state (not the MBTA) pay for the expansion, but the expansion must happen.
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p>In my opinion, the Feds should have required the environmental remediation to occur before releasing funds for the Big Dig itself. But the Big Dig is chock full of woula/coulda/shoulda.
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p>Additionally,
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p>That’s not quite right. All of the Green Line stations were rebuilt with another objective: lengthen the platforms to allow for 3 car kits. This increases capacity 50% on the Green Line, at least for D line (above and below ground) which doesn’t have to deal with getting across traffic light intersections. If you’re going to do that much work on a station platform, you’ve got to do the handicap accessibility if you want the Fed funds. The Green Line platform project is one of the few MBTA capital projects which may actually help improve QoS without driving up budgetary costs.
All of this is “reneging” at some level… I’m sure someone from the Carmen’s Union would come on here and say
As circumstances change, so do priorities and possibilities. We can jack up fares and offer crappy service but fulfill these settlements. This, in turn, will create a downward spiral in ridership, further hurting revenues, leading to further cutbacks. I don’t think anyone wants that. My real point was that there is still areas to cut which would not harm the T’s core mission. Each one of these, however, is a sacred cow to some group of people — T workers, public employees generally, the Carmen’s Union itself, environmentalists, disability advocates. This is part of “changing the culture at the MBTA”: learning to live within its means and saying no to some interest groups.
The green line extension was required by court to mitigate the additional environmental pollution that the Big Dig has created. Reneging means all of us have to eat the pollution costs. It also means an entire region of inner-Boston-metro remains “off-grid”.
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p>In my opinion, the Big Dig users should pay for the Green Line extension. I don’t care if it’s through a toll or (my preference) a gas tax increase inside 128.
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p>In 2005, MA consumed 2,860,905,000 gallons of gasoline (EERE MA). Call it 3 billion. Let’s say 67% of gasoline is pumped within 128 (pulled from my hindquarters, I’d concede it might be half that). That’s 2 billion gallons of gas per year. Tax it 2.5 cents per gallon, and you’ve got $50 million per year. I’m willing to bet that $50m/yr
(a) covers the debt services on the Green Line extension, estimated to cost $375,000,000 in 2003 (Boston MPO MBTA)
(b) could be used to help pay back some of the $2 billion in debts that the Big Dig handed the MBTA
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p>2.5 cents per gallon extra for gas inside 128 would pay for the Green Line extension and help shave down some of the massive debt the MBTA is carrying because of the Big Dig. It’s better than a toll because it’s more efficient, and it’s fair because people inside 128 benefit from the Big Dig more than people outside 128. This has the advantage of helping to get the state legislators outside of 128 on board.
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p>Finally, a 2.5 cent difference is so small that it’s not worth driving extra miles to save a lousy quarter.
No one is arguing the T is perfectly managed but really transit has gotten the shaft historically.
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p>All the debt accumulated is in large part because of the imbalances in the way the T and transit in general is funded. We need a growing transit network and yet the T has been asked to saddle the bill for it. They couldn’t afford it on their own but they really shouldn’t have to.
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p>The State builds all types of new road projects using the full capital and credit at its disposal. The T doesn’t have that and is forced to make due on its own.
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p>We can talk health care costs all we want and blame the Carmens, but if we want a vital and vibrant transit network, which we need, then we need a better deal for the T.
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p>If the problem is debt, then let’s get some federal aid to relieve the burden. Why bailout GM or Bank of America and leave our public transit on the map. Strings could be attached to the funds, just as they are to the TARP funds for banks, around pay and future costs. If transit authorities get bailed out then they have to meet certain conditions.
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p>The gas tax would also help as a dedicated revenue sourse against future debt from new projects as well. That is what we need, so the debt mountain doesn’t get worse.