A sustainable transportation system must be sustainably funded. Staying on Track has identified five indicators (which provide ongoing information about the system in greater Boston and Massachusetts) for assessing the sustainability of the funding streams that support transportation in Massachusetts.
Indicator 5.1 Projected Operating Shortfall (FY 2014)
This indicator tracks the projected shortfall for annual operations. While the MBTA’s annual shortfall has long been characterized as a structural operating deficit, the Massachusetts Department of Transportation cannot run an operating deficit; instead, the operating shortfall is hidden in the Commonwealth’s capital budget and bonds are issued annually to pay for costs that should instead be included in the operating budget. (At current interest rates and bond terms, each $100 million in bonds issued to cover operating expenses will cost the Commonwealth approximately $275 million in principle and interest payments over the life of the bonds.) The third component of the operating shortfall is the amount that would be necessary (on a one-time basis) to shift the states Regional Transit Authorities (RTAs) to “forward funding”, a move that has been called for but not implemented because of the lack of funds needed.
Indicator 5.2 Five Year Capital Spending Shortfall
Capital funding shortfalls need to be tracked separately from annual operating needs. Because the Commonwealth, the Massachusetts Department of Transportation and the MBTA all do their capital planning and budgeting on a five year cycle, this indicator is derived from the Dukakis Center’s analysis of the most current five year capital spending plans and highlights the difference between the identified capital needs over the five year period and the capital funds actually available during that time period.
Indicator 5.3 Capital Spending On Transportation
Using data from the Commonwealth’s capital budgets, this indicator tracks total state capital spending on transportation, including both spending under the state’s “bond cap” and other capital spending based on other revenue sources. The indicator tracks both the total amount of capital spending and the proportion of the Commonwealth’s annual capital budget used for transportation.
Indicator 5.4 Debt Burden (Systemwide)
Using data from the MBTA, MassDOT and state budgets, this indicator tracks the proportion of transportation budgets being spend on debt service. Because of differences in budgeting among MassDOT and the MBTA, these debt burdens are presented separately rather than adding them together. The third part of this indicator presents data on the Commonwealth Transportation Fund, a separate fund within the state budget into which are deposited revenues from the gasoline tax and Registry of Motor Vehicle fees and from which are paid certain transportation costs including the debt service on General Obligation debt issued by the Commonwealth under the bond cap which the Secretary of Administration and Finance determines was used for transportation capital spending. For more information on the Commonwealth Transportation Fund, see Transportation for Massachusetts’ recent report Maxed Out.
Indicator 5.5 Debt Burden (MBTA)
This indicator tracks the proportion of the MBTA’s annual operating budget that is spent on debt service, going back to fiscal year 2001.