New T oversight board needs plenty of power
We may be on the cusp of summer, but commuters are still fuming about last winter’s system-wide collapse of the MBTA. A recent poll showed a whopping 84 percent of registered voters support Governor Baker’s tough-minded reform package. Some progress has been made with the state Legislature’s acceptance of the proposal for a highly focused Fiscal and Management Control Board that will sunset in three-to-five years after, we hope, solving the T’s woes.
But that emergency board is worthless without the powers and resources to get the job done.
One critical component would allow the T to competitively contract services. Since 1993, the so-called Pacheco law has blocked the T from outsourcing services even when significant cost savings are evident. The law does not apply to the state’s many regional transit authorities and should not govern the T.
The T also needs a related power — the ability to correct past mistakes made with contractors. We won’t soon forget the failures of the commuter rail operator, Keolis, during the winter. The management control board needs to amend the T’s flawed contract with Keolis by incentivizing improved fare collection and imposing stiffer penalties for late and cancelled trains. The T should also terminate the contract with its three vendors for the Ride, the MBTA’s paratransit service provider. The Ride costs three times more than a separate (and larger) paratransit system run by the state’s health office.
Perhaps most important, the control board needs the ability to eliminate final and binding arbitration.
At every Massachusetts agency except the T, a separate body reviews and decides whether to fund arbitrators’ determinations. The Legislature long ago handcuffed itself by carving out an exception for the authority.
The Carmen’s Union vows to fight this change. Should the Legislature adopt the governor’s proposal to give the new control board approval power over collective bargaining agreements, the union promises to block the T’s federal funding.
It’s a serious threat: The union did exactly that in 2009 when it thwarted the Legislature’s attempt to rein in MBTA health insurance costs. That year, lawmakers bailed out the T by raising the state sales tax and moved MBTA employees and retirees to the state’s cost-effective group insurance plans, which already cover more than 400,000 state and municipal employees and family members.
After a Superior Court judge upheld the Legislature’s view, the Carmen’s Union filed an official action with the US Department of Labor. That agency held up the T’s federal funding and assigned the matter to state interest arbitration — a process that took three years. The MBTA estimates that it lost $61 million in savings during that time. In the end, the arbitrator restored expensive components of the union’s earlier arrangement, ruling that only more arbitration could settle the question of whether the state should hold MBTA employees harmless for additional health expenses.
The Legislature can — and must — stop treating T arbitrations in this exceptional manner.
Finally, fixing the T will require more money. Savings from the above-mentioned reforms can help, but won’t fully address the T’s nearly $6.7 billion maintenance backlog. The most responsible way for the Legislature and the governor to fund the T is for the state to assume a portion of the T’s massive debt gradually, as the agency meets customer service and performance goals. This would free up significant operating dollars at the authority and create incentives for reforms to be enacted quickly.
Fixing the T will take more than a new organizational chart. The Fiscal and Management Control Board will achieve little unless lawmakers and the governor give it the powers and resources it needs to succeed.
Jim Stergios is executive director of Pioneer Institute, a Boston-based think tank.