The leader of a coalition of towns and cities served by the MBTA delivered a stark warning to the agency’s board Thursday morning: Without more state funding, the transit network will likely have to make cuts that will imperil the region’s economy and efforts to build desperately needed housing.

Brian Kane, executive director of the MBTA Advisory Board and a former T official, said his organization’s members are concerned about the pace at which the T is increasing its spending while ridership and support from Beacon Hill remain little changed.

“Even in the best-case scenario [for ridership] there are significant deficits forecast in [fiscal year 2024] and ’25,” Kane told the MBTA Board of Directors Thursday morning as it met to approve its fiscal 2023 budget. “The T must invest operating dollars to achieve its policy goals, but it must do so sustainably.”

The MBTA Advisory Board represents the 176 cities and towns served by the T.

The T’s $2.55 billion budget for the upcoming fiscal year represents an 8 percent increase year-over-year. The increase is largely driven by a revamp of the system’s antiquated bus network, challenges hiring in a tight labor market and the addition of nearly 150 new safety positions. Those hires come amid an unprecedented federal investigation into the transit network’s safety practices, a series of serious crashes, a passenger fatality, years of underinvestment in maintenance and decades of indifference to increased transit funding on Beacon Hill.

To help pay for the increase in this budget cycle and close a $288 million budget deficit, the T is tapping the last of its share of federal COVID aid doled out to the nation’s transit agencies in the early days of the pandemic in 2020. That deficit could balloon to $467 million by fiscal 2026 under the most likely scenario, according to data presented by agency CFO Mary Ann O’Hara on Thursday.

The T’s budget is largely funded by a share of the state sales tax totaling $1.32 billion and $474 million in fare revenues, with the towns and cities it serves and direct transfers from the state budget making up the last $371 million.

For decades, the T has relied on the high fares paid by suburban office workers riding the commuter rail to “paper over” the gaps created by limiting bus and subway fares to a level most riders can still afford, Kane said. But those same commuter rail riders are the ones who have been slow to return to the office, and therefore transit, over the course of the pandemic. Some of them might not even return to commuting at all.

“If ridership does not return to pre-COVID levels, the precarious financing mode the T is operating under will be strained,” Kane said.

The alternative, he said, would be “really, really difficult” service cuts. Cuts, which MBTA Board of Directors member Travis McCready pointed out, will likely fall hardest on minority and low-income communities.

“I think it’s obvious that increased operating subsidies are required to keep the T whole,” Kane said in a question from MBTA Board member Scott Darling on how his colleagues should respond.

With key employers in Greater Boston reliant on the T to get their workers to jobs, the region’s – and therefore the state’s – economy depends on the T not cutting service, Kane said. The agency is also the linchpin of efforts to reduce the state’s greenhouse gas emissions and build hundreds of thousands of new homes near transit stops to address a statewide cost-of-living crisis driven by incredibly high home prices.

Attorney General Maura Healey, the current front-runner in the race for governor, has said she will make housing production and reducing the cost of living a key campaign issue.

“Your communities are really, really bullish on the T. The T is the key to the economy and ecology of the region.… We really believe the T can move the needle on climate and fairness in the region.… It’s critical to our way of life,” Kane told MBTA directors. “Use your position to explain to the general public and lawmakers how important the T is.”

As T’s Fiscal Cliff Looms, Municipalities Call for More Funding

by James Sanna time to read: 3 min