Coronavirus derails MBTA finances, report says deficit to hit $400 million by FY22
The coronavirus has sent the MBTA’s already precarious financial footing “off the rails,” according to a new report that projects the virus will push the T’s deficit over $400 million by the next fiscal year.
“Even before the pandemic hit, the MBTA’s operating costs jumped by 5.3%, a five-fold increase over previous years. Combine that steep rise in expenses with a $240 million loss in fare revenues due to the pandemic, and the T’s balanced budget has gone off the rails,” the Massachusetts Taxpayers Foundation says in its report released Monday.
By July 1, 2021, the MBTA’s deficit will exceed $400 million, the organization concludes.
The MTF report warns of “additional blows” looming over MBTA’s long-term finances. A portion of the MBTA budget depends on state contributions and the state is facing its own deteriorating financial situation to the tune of a $6 billion loss in anticipated tax revenues related to the coronavirus.
“This report makes clear that the Legislature and governor need to step up. The Massachusetts economy only works when our transit system works. New resources need to be on the table,” said Chris Dempsey of the advocacy group Transportation For Massachusetts.
Ridership on the transit system plummeted more than 90% amid coronavirus closures and the T is still operating at a reduced capacity. It will begin gradually ramping back up to full service beginning June 21. The MTF warns it could take months for transit system revenues to rebound.
A one-time federal bailout of nearly $1 billion will float the system through near-term losses, but the report says the assistance “merely delays the impending crisis.”
The T’s budget strain is a “deja vu” situation akin to the financial crisis Gov. Charlie Baker addressed five years ago with the creation of the MBTA’s Financial Managment Control Board. Through the five-member board, the agency has increased transparency and cut costs to address a growing budget gap
That progress has “unraveled,” under the strain of the pandemic the report states. The FCMB will disband, per statute, at the end of the month and the Legislature has not yet acted on Baker’s proposal to create a new seven-member board to manage the T’s finances.
Unless the Legislature acts to shore up the MBTA budget, Dempsey warns it could “stifle any hope of a quick recovery.”
from Boston Herald https://ift.tt/2Y4kVr8
Post a Comment