The Massachusetts Department of Transportation released fare increase and service reduction proposals for the Massachusetts Bay Transportation Authority, aimed at closing a projected $161 million budget gap for Fiscal Year 2013.
Earlier estimates projected the gap would total approximately $185 million for FY13, however the MBTA has taken aggressive steps towards reducing the deficit including reducing energy costs, planned introduction of single person train operation on the Red Line, encouraging MBTA employees to enroll in more affordable health insurance plans and other operating and administrative efficiencies. However, growing debt service costs associated with capital projects, significant increases in maintenance costs for an aging fleet and higher costs for the RIDE mean additional solutions are necessary.
The proposed fare increases and service reductions include two scenarios at a 43 percent and 35 percent rise in fares.
“While the MBTA continues to identify and adopt strict measures to close the budget gap, less costly ways of doing business and additional revenue-generating measures are necessary,” said MassDOT Transportation Secretary and CEO Richard Davey. “I am confident with the public’s involvement in this process we can review the study, propose recommendations and together generate new revenue to continue the progress the MBTA has made in serving its customers.”
In order to fully engage transit users in the process, the MBTA will host more than 20 public hearings over the next several months. A final fare increase and service reduction recommendation will be made to the MBTA’s Board of Directors this spring and changes will be implemented on July 1, 2012.
In addition to rising operating costs, annual revenues continue to be insufficient to fund the system. Sales tax revenue allocated to the MBTA has increased by only 0.08% percent annually since fiscal year 2001, resulting in growing budget gaps since the original projections were made with the expectation of forward funding. While the MBTA was a beneficiary of the 2009 sales tax increase, the annual growth in sales tax revenues is not enough to address continuing increases in the cost of service on all modes.
“With MBTA ridership at record levels, the demand for the services we deliver is unquestionable,” said Acting MBTA General Manager Jonathan Davis. “I look forward to an open and transparent public process that will lead to recommendations on how we can continue to satisfy demand while addressing the T’s financial crisis.”
The Fare Increase and Service Reductions Study is available at www.mbta.com.