The MBTA Advisory Board is calling on state leaders to move quickly in creating a permanent governing panel to oversee the transit agency as it grapples with budget issues and decreased ridership since the pandemic began.
The advisory board warned in a June 4 report that a governing panel is urgently needed to work on addressing a structural deficit in the MBTA’s budget that could affect the agency once federal pandemic relief money is gone.
“It’s critical that these people get into place now,” said Brian Kane, the advisory board’s executive director. “Because there are very important policy considerations, very important financial decisions that will have wide-ranging and long-term impacts.”
And those choices, Kane said in a phone interview Sunday, “will need to be decided very soon.”
Governor Charlie Baker, along with state Representative Joan Meschino and Senator Joseph A. Boncore, have filed pieces of legislation that would create a new board, Kane said.
The push to form a new governing board comes as the agency works to rebuild its ridership. January ridership on the commuter rail, ferry, and light rail was down nearly 90 percent compared to the same time last year, according to the board’s report.
Along with restoring ridership, the transit agency faces a structural deficit in its operating budget, the report said.
While the MBTA’s budgets for the next three fiscal years are balanced due to incoming federal dollars for pandemic relief and recovery, it will be a different story once those funds dry up in mid-2024 as expected, the report said.
The advisory board anticipates the MBTA will face a potential operating budget deficit of $300 million to $450 million in fiscal year 2025 unless ridership returns to pre-COVID levels, the report said.
The MBTA Fiscal and Management Control Board, which is separate from the advisory board, was formed in 2015 to oversee agency finances and develop plans for future improvements. The fiscal control board is due to disband June 30.
It was due to end its work about a year ago, but Governor Charlie Baker approved an extension of its term during the pandemic.
Baker “hopes and expects” the Legislature acts soon so the governing board can begin its role July 1, a MassDOT spokeswoman said in a statement Sunday.
The advisory board, which represents the 176 communities served by the transit agency, offered several recommendations it said were needed to help control spending as the MBTA grapples with pandemic-related reductions in ridership.
One step backed by the advisory board, according to the report, is requiring that MBTA operating expenses do not increase beyond 2.4 percent annually for the next few years.
“The cities and towns of the MBTA Advisory Board advocate for fiscal discipline,” the report said. “As communities need to balance budgets annually, and prepare for future budget scenarios, Advisory Board communities believe that a rigorous policy of fiscal responsibility is wise and warranted.”
The Baker Administration does not believe it is in the best interest of customers or MBTA operational needs to put a cap on the agency’s operating budget, according to the MassDOT statement.
The MBTA should also “go slow” on any free fares program until a way is found to make up for the lost revenue, the report said.
And although the advisory board was broadly supportive of using fares with discounts for low-income riders, it cautioned about the budget impact of doing that: “The loss of revenue involved in such a policy must be made up somehow,” the report said.
The MBTA is currently working on the details of a free fare pilot proposal and further information will be announced once an agreement is finalized, the MassDOT statement said.
“The Administration and the MBTA management have stressed that if free fares are offered on any routes or any modes, there must be a discussion and decision first about the independent and durable revenue source that would replace revenue lost if free fares are offered,” according to the statement.
Other proposals would affect staffing, including prioritizing an existing Ambassador Program to focus on busier stations. It also called for greater transparency from the MBTA, including publishing more details on the agency’s hiring plan and the backlog of “State of Good Repair” work being done to the system’s infrastructure.
The advisory board also looked at the long-term future of the MBTA, including its commuter rail service.
If commuting patterns have been changed permanently because of COVID-19, the report said, large parking lots at those stations may no longer be needed. The MBTA should consider whether to use some of that property for multi-unit housing development, the report said.
In recent years, MBTA officials have “dipped their toe” into similar projects at Newton’s Riverside station and in North Quincy and Quincy center, Kane said.
“The MBTA owns some prime real estate sitting in city and town centers. And the recent zoning change requiring more dense housing near train stations — there is a big potential opportunity,” Kane said. “The T needs to balance its customers’ desire to park and ride, versus live and ride.”
John Hilliard can be reached at email@example.com.