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Starts & Stops

Some question the T’s use of capital budget for salaries

The cash-strapped T is using its capital budget to pay 444 employees.Barry Chin/Globe Staff

The MBTA’s capital budget is meant to pay for large-scale projects, such as replacing aging subway cars and upgrading decrepit stations. But the cash-strapped agency is also using the budget account to pay 444 employees.

While the practice is legal, government watchdogs say doing so can lead to trouble. The capital budget is funded in part by issuing bonds to investors, and taxpayers must eventually foot the bill for the interest on the borrowed money.

That matters to an agency like the T, which already struggles to pay off its debt.

The Massachusetts Bay Transportation Authority’s spokesman, Joe Pesaturo, said the 444 employees — out of more than 6,400 employees total — cost about $54 million in salaries and benefits. “Because balancing the MBTA’s operating budget is an annual struggle, some employees who work on capital projects are paid with capital funds,” he wrote in an e-mail.


The capital budget is expected to be about $1.29 billion for the current fiscal year.

Paul Regan, executive director of the MBTA’s advisory board, said that in an ideal world, employee wages would not come out of the budget meant for large construction and maintenance projects.

“The downside of keeping them as employees on a capital budget is that their benefits come out of the budget,” Regan said. “You’re not only paying them their wages, you’re borrowing their wages, and paying principal interest over the life of the bond.”

There is precedent in the state for the trouble this can cause.

In 2007, a commission of experts advised against the practice for the state Highway Department, which is now part of the Department of Transportation.

In the report, the experts said MassHighway funded more than 80 percent of its workforce from the capital budget, “which shortchanges its capital needs and makes operations more expensive because of interest expenses.”


Regan said the T is probably reacting to a lack of resources, but it needs to keep an eye on the practice.

“There should be pressure to keep this on the forefront,” he said. “You don’t want to get lazy about people being on the capital budget because it is expensive.”

Appeals Court sides with MBTAon its ban of group’s ad in 2013

Last week, the MBTA prevailed yet again in a legal challenge that followed the agency’s refusal in 2013 to display politically charged advertisements seen as demeaning to Muslims and Palestinians.

After the T rejected the advertisements from the American Freedom Defense Initiative, the group sued the agency in US District Court, accusing it of violating the Constitution’s First and 14th amendments. The group lost the lawsuit, then appealed the decision.

On March 30, the US Court of Appeals for the First Circuit affirmed the lower court’s decision that the MBTA had the right to reject certain advertisements.

“The key fact is that the MBTA will not run every advertisement it receives, even when the advertiser is willing to pay the going rate,” Judge David J. Barron wrote in the Appeals Court ruling.

In 2013, the T ran advertisements from a pro-Palestinian advocacy group that called Palestinians “refugees.” When the T then rejected advertisements from the American Freedom Defense Initiative, which has been labeled as anti-Islam by the Southern Poverty Law Center, the organization accused the T of violating its free speech and equal protection rights.

The group’s submitted ad stated, “In any war between the civilized man and the savage, support the civilized man. Support Israel. Defeat Jihad.”


The T has pointed to its advertising guidelines, which bar ads that demean or disparage groups.

In his ruling, Barron said the MBTA’s advertising program did not amount to a public forum, and the T had not discriminated against the group’s viewpoint.

Nicole Dungca can be reached at nicole.
. Follow her on Twitter @ndungca.