The MBTA expects to fall short of its revenue target by $231 million this fiscal year, a massive deficit that an oversight group warns makes plans for an ambitious budget proposal for the next fiscal year “basically moot.”
With ridership plummeting during the pandemic, the MBTA is projecting the shortfall for the fiscal year that ends June 30, representing more than 10 percent of its budget. The vast majority of the decline is from revenue lost during the pandemic, which has caused ridership to fall more than 90 percent on subways and nearly 80 percent on buses.
Officials at the Massachusetts Bay Transportation Authority also expect to lose about $14 million from its share of state sales tax revenue, and that revenue from parking and advertising will be less than expected.
The MBTA should be able to cover the losses with Federal Transit Administration grants authorized by the CARES Act, the economic stimulus package that included $25 billion for transit agencies across the country. The MBTA should be eligible for about $840 million, Mary Ann O’Hara, its chief financial officer, said Monday at a meeting of the governing board.
“We are engaging on an almost daily basis with the FTA, understanding their application process to get the CARES Act funding into the T," O’Hara said.
Before the pandemic and the economic devastation it has caused, the Fiscal and Management Control Board, which oversees the MBTA, last month gave initial approval to a budget that forecast a revenue increase of more than $100 million. That blueprint relied on optimistic tax revenue projections and included new spending on several major initiatives, from increased bus service to new safety measures.
Now, the entire budget will have to be revisited, said Brian Kane, deputy director of the MBTA Advisory Board, an outside group that has some oversight of the MBTA’s budget. Even when the crisis has passed, ridership and other revenues will be depressed by high unemployment, he said.
“We all understand that the budget presented on March 9 at this point is basically moot," Kane said. "The revenue projections underpinning it will probably never be realized, given the new economic realities we face.”
Kane said the MBTA must maximize the money it receives from the federal stimulus package to bolster the budget and urged the authority to implement a hiring freeze for all positions except those focused on safety and on system improvements.
O’Hara said the MBTA is monitoring spending and hiring, noting that service reductions during the pandemic may help balance the ledger. But she also said that the T’s bulk purchases of personal protective equipment and cleaning materials have increased costs.
Mitigating the concerns somewhat, O’Hara said, the MBTA may be able to use the new federal funding to help with next year’s budget, as well.
The budget for next fiscal year is supposed to be finalized by April 15, but board members expect Governor Charlie Baker to delay that by two months.
The pandemic is having other impacts on the T. For example, it’s in the middle of testing commuter rail service to Foxborough and is scheduled to soon begin a pilot program for more-frequent service on the Fairmount Line. Both services were expected to be judged on ridership, which now looks like an unfair metric. The MBTA’s general manager, Steve Poftak, said Monday that it will consider other ways to assess the programs so they are "given a fair shake.”
Also Monday, transportation officials took up other issues unrelated to the pandemic:
• The state is tweaking its proposals for a major upcoming Massachusetts Turnpike project. That could address widespread concern about disruptions of commuter rail service and the environmental impact of building a temporary road out over the Charles River. A more comprehensive update is expected by next month.
• Bus lanes will be added in each direction on the Charles River Dam Road for shuttles between Lechmere and North Station, taking away two lanes for general traffic, as the Lechmere and Science Park stations close next month for about a year as part of the Green Line extension project. The bus lanes would save passengers about 15 minutes round-trip each day by allowing them to speed past other traffic — though traffic is not currently as much of an issue.