Budgets bite. Especially in this economy. Just in time for Friday the thirteen the MBTA's board of directors has approved the organization's 2010 budget of $1,627,000,000, just approved by its board of directors, contain some intense language: "The day of reckoning is here... Fiscal 2010 will again be an extremely difficult and challenging year."
Our trusty T expects revenue to decrease by $4 million and operating costs to increase by $114 million in 2010, forcing it to rely on $160 million in additional funding from the state. Sales tax revenue has grown by only 1% each year since 2001 (before which it averaged 5% annual growth), putting the T $275 million behind budget and increasing the need for measures like the gas tax to offset the lagging sales tax.
Increased ridership is expected to bring up T fare revenues by about $4.5 million, and increased parking fees will net an additional $5.3 million. Sadly, non-fare revenue, including advertising (in a tough spot in this economic environment) is expected to decrease by $17.5 million.
About 30% of T revenue goes toward principal and interest payments (which are increasing by $77 million in 2010 as debts become due) for the more than $5 billion in debt the T carries. The vast majority of the planned budget increase for 2010 is a direct result of these debt payments. The T has a big stinky bouquet of legacy debt, Big Dig projects, and repairs it has yet to pay for.
In the face of this financial nightmare, the Herald reports that the T has hired 300 new employees, a staggering number for a small operation with big debts. And even with additional staff, bus and subway services have been decreased.
The T budget writeup says it succinctly: "Faced with no increase in our current revenue sources, a dramatic rise in debt service costs and no available “rainy day” funds to draw upon highlights the fact that the Authority can no longer dig its way out of its current and future deficits without new revenues." Suspiciously absent are plans for those new revenues, leading to the conclusion that "The Authority will proceed over the next several months with planning for a contingency of fare increases and service cuts should the proposed new dedicated revenue source be insufficient to produce a balanced budget."
We might pay $100 a month for a pass if the T took us where we wanted to go when we wanted to go there (say, 2:30am on a weekend?). Unfortunately, improved service doesn't seem to be part of the plan.
Bottom line? Debt can be dumb. And hard to pay off. Present paying may be better than forward funding. T riders of the future may pay for the mistakes of the past for a long time to come. In the meantime, you can always work for the city.
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