The MBTA has made progress increasing the amount it spends on maintenance and modernization, but a business group warns in a new report that funding shortages on the horizon could create a “potentially devastating outcome for public transit.”
In its second of three reports examining the MBTA’s financial outlook, the Massachusetts Taxpayers Foundation said that the transit agency faces major long-term gaps between resources available and its spending goals to address backlog of repair projects. The group said the T also lacks accurate costs or funding for decarbonization and climate resiliency adaptation and called on T managers to immediately address capital shortfalls.
The T will need to spend $1.5 billion per year starting in fiscal year 2024 to meet a $10 billion maintenance and modernization target within 15 years. MTF authors estimated that the agency needs to find $780 million more to meet that goal in fiscal 2025, with the gap growing every year until it reaches $1.3 billion in fiscal 2032.
“As is the case with its operating budget, the MBTA confronts an impending chasm between its vision for the future of public transit and available resources to achieve that vision,” MTF wrote. “For the past several years, the MBTA had more funds available than it was able to spend. Its challenge was to ramp up capital delivery. Now, just as the T has achieved that greater capital spending capacity, funding sources will plummet for FY 2025 and beyond.”
Less than half of the funding in the fiscal 2021 to fiscal 2025 five-year capital investment plan comes directly from the MBTA, with the rest consisting of state and federal funds for specific projects such as the Green Line Extension that will “dry up” once work is complete, MTF wrote. Another factor MTF said would contribute to the declining availability of capital funds is increasing debt service costs.
The MBTA is also grappling with a harrowing operating budget outlook, and considering fare hikes, layoffs and service cuts to address a projected deficit between $308 million and $577 million starting next year. Lawmakers are weighing an $18 billion bond bill that includes T funding, but officials are coping with falling tax and fare collections in the pandemic.
