Watchdog urges action on MBTA deficit | News

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BOSTON — An independent watchdog is warning of “terrible options” if the MBTA doesn’t take steps during the next year to reduce a projected $700 million deficit.

A new report by the MBTA Advisory Board said the public transit agency is facing a $696 million budget gap in the 2026 fiscal year that needs to be dealt with over the next 13 months to prevent “draconian” service cuts to the transit system.

The 176-member advisory group, which includes representatives of cities and towns along the MBTA’s system, said without “external support” to reduce the deficit the ability of the MBTA to close the shortfall is “nearly non-existent.”

“This comes at a time when MBTA ridership has not returned, and analysis suggests that it is unlikely to return anytime soon given both a flattening of growth versus general expectations for recovery,” the panel wrote. “The fear is that no action will take place, and service cuts will be the only available solution if the authority is forced to solve its deficits internally. “

The advisory council said the service cuts required to close a $696 million deficit in 13 months “are simply impossible to propose and still be considered a public transportation provider.” The report cited “draconian” cuts in 2021 after T revenue tanked in the week of the COVID-19 pandemic.

“To prevent these death-spiral-inducing actions, the MBTA board urgently needs to begin discussions of financial restructuring to be able to plan rationally for the foreseeable crisis ahead,” the panel wrote.

MBTA officials have yet to disclose how they plan to reduce the $696 million deficit for fiscal 2026. A T subcommittee recently gave a green light to a $3 billion fiscal 2025 budget that effectively wipes out the MBTA’s savings.

The spending plan, which requires approval from the MBTA’s board of directors, would tap the agency’s remaining $307 million in savings and federal funding to balance the budget.

T officials estimate the transit agency’s operating deficit for the next fiscal year is $182 million, which is projected to grow to $859 million by 2029.

Ridership is another concern, with the number of passengers still below pre-pandemic levels. Fare revenue covered 41% of the system’s annual operating expenses prior to the COVID-19 pandemic, but that has dropped to 19%, according to T officials.

Meanwhile, the MBTA said it would need about $24.5 billion to bring the system into a state of “good repair” by replacing tracks, facilities, power equipment, trains and other infrastructure.

Gov. Maura Healey, who took office last year, attributes the deficit to a lack of investment in the system over decades and says she wants to make “transformative investments” to improve service and reliability.

The House of Representatives’ budget proposal, approved in April, calls for diverting $555 million to the MBTA in the next fiscal year for upgrades and training new workers at the beleaguered agency. That includes $40 million to create an “MBTA Academy” to help create a pipeline for skilled employees.

But that funding is anything but certain, with House and Senate negotiations set to get underway on the final spending package. The Senate, which approved its version of the $58 billion budget in May, didn’t include the additional T funding.

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.

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