The Kitty & Michael Dukakis Center for Urban & Regional Policy conducts research and works on policy issues affecting the Massachusetts Bay Transportation Authority (MBTA or T) and smaller regional transit agencies throughout the Commonwealth because well-run, financially stable transit systems are essential to achieving a myriad of important urban and regional policy goals including improving mobility and access to opportunity, growing jobs and the state’s economy, combating sprawl, reducing dependence on imported oil and achieving greenhouse gas reduction goals.  The transit services provided by the (MBTA) and Regional Transit Authorities (RTAs) provide access to housing, employment, education, health care, and other critical services to everyone, regardless of whether they own or can drive a car.  In order to achieve transit’s potential, however, adequate funding needs to be put in place to support and improve existing services, maintain transit vehicles and assets, and expand service frequency and availability to better serve both current and potential transit users statewide.  Instead, transit services in Massachusetts are in crisis, with fare increases and service cutbacks already implemented or imminent at the RTAs and, now, at the MBTA.

The Dukakis Center supports smart and sustained investment in transit statewide, with the goal of creating the best public transportation system in the United States, one that can realize the full potential of transit as a transportation option of “first resort” and help the Commonwealth achieve its economic development, transportation and sustainability goals. As with all of our work, the Dukakis Center is committed to addressing transit finance and policy from a fresh perspective and to working with a broad range of partners and stakeholders to conduct research and create policy tools that address some of the most pressing challenges facing transit systems in Massachusetts and throughout the nation.

“While the financial picture is grim, it is important to note that the MBTA is too valuable an economic asset to permit its further deterioration or even collapse.  A robust public transportation system provides vital economic and quality-of-life benefits to residents from all walks of life and to businesses in the communities it serves.”

MBTA Review (D’Alessandro report), November 2009

Understanding the MBTA:  The Proposed Fare Increase and Service Cuts

After years of juggling finances to avoid service cuts and fare increases (see below for more information about the MBTA’s financial situation), the situation has become critical and the T can no longer avoid taking drastic action.  In Fiscal Year 2013 (which begins in July 2012), available revenues are projected to be as much as $185 million below operating expenses. This structural deficit will continue to grow through Fiscal Year 2016 and beyond under current conditions. To maintain financial stability, the T has proposed two alternative plans or “scenarios” for raising fares and cutting services in order to balance its budget as required by law.  For more information about these proposals, follow the links below.

The fare increase/service cut proposal and background materials prepared by the MBTA http://mbta.com/about_the_mbta/?id=23567

Advisory Board Counter-Proposal to MassDOT plan (Feb. 2012)

Response to MassDOT proposals to cut MBTA service and hike MBTA fares
Transportation for Massachusetts, a coalition working for better transit http://www.t4ma.org
T Riders Union http://www.facebook.com/events/210746752350918/#!/tridersunion
Students Against T Cuts (site includes online petition) http://www.facebook.com/StudentsAgainstTCuts
Occupy the MBTA http://www.facebook.com/#!/AgainstTCuts

Understanding the MBTA:  Fixing Transit Finances

The current financial crisis that precipitated the fare increase/service cut proposal has been brewing for more than a decade.   In 2000 Massachusetts changed the way it financed the MBTA, providing the Authority with the revenue from one penny of the then five percent statewide sales tax but at the same time making the T responsible for paying for its own maintenance and capital needs.  And at the same time the T was saddled with $5.6 billion in debt, a figure that has soared to $8.5 billion as more bonds have been issued to try and control a growing backlog of unfunded maintenance needs.  As a result, the MBTA carries the most debt of any US transit agencies and spends one-quarter or more of its total operating budget paying off bonds.  This history is explained in the excellent report Born Broke by the MBTA Advisory Board.

To make matters worse, the T has been refinancing its debt not only to reduce interest costs but also to push principal payments into the future – an effort that could drive annual payments to bondholders to more than a half-billion dollars per year by 2015 or so.  By then, the T will be spending all of the revenue collected from higher fares just to pay for debt service.  This situation is not entirely the MBTA’s fault.  The Authority has to balance its budget every year.  As the November 2009 “independent review” of the MBTA led by David D’Alessandro found, most of the expense side of the budget cannot be controlled by the MBTA, at least not without increased authority that the Legislature has yet to grant.  On the revenue side, the MBTA has succeeded in staving off fare increases and service cuts for more than five years.  But the numbers don’t add up.  Creative one-time revenue generation and interest-only debt refinancing have simply kicked the can down the road – to right now.

As part of the material released in connection with the proposed fare increase and service cuts, the MBTA has released a financial “pro forma” for fiscal years 2013-2016 that summarizes the T’s projected revenues and expenses if no changes are made.  The Dukakis Center has taken this data and created two additional spreadsheet pages, one assuming that Scenario One fare increases and service cuts are implemented, one assuming that Scenario Two fare increases and service cuts are implemented.  The spreadsheet, which can be downloaded here, also calculates how both scenarios would affect (1) the proportion of the MBTA’s budget which is covered by fares (“fare recovery ratio”) and by total self-generated revenue including fares but also real estate fees and advertising revenue (“revenue recovery ratio”) and (2) the proportion of the MBTA’s budget which will go to paying off debt service.

The Dukakis Center and others have been working hard to lay the groundwork for identifying and implementing a sustainable financial plan for the MBTA.  As part of the Transportation for Massachusetts coalition, the Dukakis Center helped to create Maxed Out, a primer designed to help everyone better understand the transportation finance crisis in Massachusetts.  And in partnership with the Conservation Law Foundation (and with the generous support of the Barr Foundation), in November 2010 the Dukakis Center hosted the Blue-Ribbon Summit on Financing the Massachusetts Bay Transportation Authority and Regional Transit Authorities, which brought together leading transit finance experts and an audience of 30-40 “participant observers” to focus on developing creative and innovative ways to both address the MBTA’s and RTAs’ financial problems and serve as a model for other states facing similar challenges. All of the background materials prepared for the Summit, as well as a summary of the Blue Ribbon Summit convening and a policy report entitled Framework for Creating a Financially Stable Public Transportation System for Massachusetts: Lessons from the Blue-Ribbon Summit on Financing the MBTA and the RTAs can be found here.


Understanding the MBTA:  The Communities and Riders Served by the MBTA

The recently-proposed fare increases and service cuts have heightened concerns about whether the MBTA will be able to continue serving its riders – who use the system for a record 1.3 million trips per day – and all of the communities and constituencies it has historically served.  For more information about ridership and existing MBTA services, as well as demographic information on the people and communities served by the MBTA, follow the links below:

Ridership and service statistics (including weekday and weekend bus ridership) http://www.mbta.com/uploadedfiles/documents/Bluebook%202010.pdf
Scorecards on quality of service http://www.mbta.com/about_the_mbta/scorecard
Bus service planning (used to decide which routes to cut) http://www.mbta.com/about_the_mbta/t_projects/default.asp?id=12769
Results of 2008-2009 passenger surveys from rail, subway and buses http://www.bostonmpo.org/bostonmpo/4_resources/1_reports/1_studies/3_transit/mbta_passenger_survey.html
Results of 2008-2009 passenger surveys from commuter rail http://www.bostonmpo.org/bostonmpo/4_resources/1_reports/1_studies/3_transit/MBTA_Passenger_Survey/Commuter_Rail_Volume.pdf
Database of demographic information for areas near subway and rail stations http://toddata.cnt.org/db_tool.phprequires registering and logging in

As part of an in-progress research project to create a “report card” of sustainable transportation indicators for greater Boston, funded by the Barr Foundation, the Dukakis Center has been analyzing data from thousands of on-board passenger surveys conducted between 2008 and 2009 for the MBTA by the Central Transportation Planning Staff (CTPS), the research and planning arm of the Boston Region Metropolitan Planning Organization.  On-board surveys were distributed to customers meeting minimum age requirements across every transit mode, including bus, heavy rail, light rail, commuter rail, and ferry boat.  Summaries of the survey results for different parts of the MBTA system are available on the MPO’s website at http://www.ctps.org/bostonmpo/4_resources/1_reports/1_studies/3_transit/mbta_passenger_survey.html

In order to increase public understanding of the demographics of the MBTA’s ridership, the Dukakis Center has aggregated this data into a spreadsheet which can be downloaded here.

Additional Information

  • Financing_the_MBTA
  • The_State_of_MBTA_Finances
  • Understanding_the_Fare_Increase



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