The MBTA’s financial woes are often chalked up, in part, to lingering debt from public transit projects built to offset the Big Dig highway project.
But a special panel appointed by Governor Charlie Baker finds the state has, in effect, been covering the cost of that debt since 2009, when it began pumping an additional $160 million into the T’s annual budget.
The implication: The bulk of the agency’s financial problems lie not in decades-old commitments to commuter rail extensions and other public transit projects tied to the Big Dig, but in more recent management failings.
The finding, from a report due out Wednesday morning, fits into a larger portrait the administration has painted in recent days of an agency that must do more to rein in costs before lawmakers consider substantial new revenue.
Excerpts of the report, obtained by the Globe and other news outlets, fault the Massachusetts Bay Transportation Authority for high maintenance costs, absentee workers, and a failure to spend all the money at its disposal for upgrades to aging vehicles, stations, and other infrastructure.
But even as the administration resists talk of new revenue streams, transit advocates have insisted more money is required. And they have called for additional steps to ease the pressure on the MBTA’s bottom line: The state, for instance, could assume a portion of the quasi-independent agency’s debt.
Where the panel lands on debt, governance of the MBTA, and other crucial concerns will only become clear with the release of the full report on Wednesday. But the section obtained by the Globe Tuesday, titled “Dispelling a Debt Myth,” provides another glimpse into the group’s take on the troubled public transit agency.
The MBTA’s debt stands at $5.5 billion, not including interest. About one-third of that, $1.8 billion, is tied to public transit projects the state agreed to as environmentally friendly offsets to the Big Dig, a massive undertaking that was expected to encourage more vehicle traffic.
Decades later, the state is still building some of those mitigation projects. And in 2009, the state eased some of the pressure on the MBTA by putting any future Big Dig-related expenses on the Department of Transportation’s books.
Advocates have long called for the state to assume the remaining Big Dig obligations and another sliver of legacy public transit debt, currently pegged at $230 million, that was put on the T’s books in 2000.
The panel’s findings, though, suggest the debt is not the drag some may imagine. A chart in its forthcoming report shows T payments on that debt gradually tapering off in the coming years, into an ever-smaller portion of the agency’s spending, even as the MBTA’s anticipated budget shortfalls grow by hundreds of millions of dollars.
Stephanie Pollack, Baker’s secretary of transportation, said in an interview Tuesday that the state cannot continue to subsidize that unchecked growth. “Giving the T this additional operating assistance in perpetuity provides no incentive for them to be disciplined,” she said.
Baker convened his panel of transit and infrastructure analysts in late February after the T failed amid a series of relentless snowstorms. Transit officials blamed an aging fleet of cars for its poor service, and the general manager at the time, Beverly A. Scott, called for more investment in the system.
But a section of the panel’s report first disclosed by the Boston Herald Tuesday shows that the T is not spending all it could to fix creaking infrastructure. While the T planned to spend about $4.5 billion on upgrades from fiscal 2010 to fiscal 2014, the agency left unused about $2.2 billion in grants and money it could have raised through bonds.
That contributed to “chronic underinvestment and an acute backlog in fleet, facilities, systems, and infrastructure,” according to the report.
Joseph Sullivan, the mayor of Braintree and a member of the panel, said the group was surprised by the money that had not been used for crucial maintenance projects. He said he worries that the projects simply were not a priority for T leadership at the time. “There was just an inability to get the work out,” Sullivan said.
Another concern raised in the report: the use of capital funds for operating expenses, a practice the panel calls a “significant warning sign.”
The capital budget is meant to pay for large-scale projects, such as replacing aging subway cars and upgrading decrepit stations. But the T also uses that budget to pay 444 salaries.
The panel’s report said the T will spend about $66.5 million in capital dollars for those employees’ salaries and benefits.
The practice is legal. But government watchdogs say it can lead to trouble, since the capital budget is funded in part by issuing bonds to lenders. By using such funds for salaries, taxpayers must foot the bill on the salaries and on the interest.
Paul Regan, executive director of the MBTA advisory board, which represents the cities and towns served by the agency, said last week that the T must keep the practice in check.
“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.”
Joe Pesaturo, a spokesman for the T, declined to comment on the draft report.
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