MBTA operating budget continues path towards fiscal responsibility

Written by Mischa Wanek-Libman, editor
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MBTA

The Massachusetts Bay Transportation Authority's (MBTA) Fiscal and Management Control Board (FMCB) adopted a Fiscal Year 2018 MBTA operating budget.

Officials say the budget continues the progress made by the FMCB and MBTA management during the past two years to sharply reduce the MBTA’s operating deficit.

“We still face serious challenges, but we can also report significant progress, more than many people thought was even possible,” said MBTA Acting General Manager and Chief Administrator Brian Shortsleeve. “We owe it to our riders to keep making the tough decisions necessary to position the T for long-term sustainable success.”

The $1.989 billion FY18 operating budget reflects a slight reduction from the FY17 spending plan and has a structural deficit of $30 million. Officials explain that while the operating budget remains out of balance, the structural deficit that is nearly ten times smaller than a projected FY18 operating budget deficit of $335 million identified twenty months ago. The deficit will be largely covered by borrowing from the $187 million in additional assistance the commonwealth’s legislature provided in 2017. Of the $187 million provided, $150 million is for MBTA capital investments.

Officials say they have worked toward balancing the operating budget through a combination of internal cost controls and increases in own‐source revenues. Operating expense growth has been held to zero for the past three fiscal years for the first time in MBTA history.

The FMCB directed MBTA staff to identify additional savings totaling $12 million from the FY18 operating budget proposed earlier this year, mainly from additional savings in current costs for bus maintenance and the MBTA’s paratransit service and the FMCB also called for MBTA staff to produce $5 million in FY18 commuter rail savings.

Officials note that capital investments in FY17 resulted in the highest state of good repair in the MBTA’s history ($675 million, up by 60 percent over FY16). Winter resiliency infrastructure investments of $100 million resulted in successful, fully operational subway, bus and commuter rail systems during winter storms in February and March 2017. Operating budget savings of $140 million were also deposited in the capital maintenance lock box for capital infrastructure repairs. The entire Red Line No. 3 fleet was approved to be replaced with 250 brand new cars, which will be in service within four years. The Green Line Extension project was also brought back on track with $600 million in value engineering savings identified and a new management team in place, resulting in the Federal Transit Administration green lighting a $1-billion funding commitment.

“These initiatives have incurred positive results with the MBTA’s operating expenses on track for the lowest growth rate in more than fifteen years,” the transit agency said.

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