There’s no question that the T is infamous for running late, being closed for any number of reasons, or just being an overall inconvenience at times. Where the question does lie, however, is in the why; why has the MBTA had such a hard time? 

These safety issues did not begin at an exact moment in time, but a major source of trouble began in the same year that the hit show Survivor debuted, the landmark case Bush v. Gore was decided, and Eminem broke records with his hit rap album, The Marshall Mathers LP. 

If you haven’t already guessed it, the year was 2000. 

Prior to 2000, the Massachusetts Bay Transportation Authority’s funding structure was in arrears, or bills that were paid by the state legislature. In other words, the MBTA would use revenue to cover as many costs as possible and the difference would be paid by the state legislature at the end of each year. 

Once 2000 rolled around, then-Governor Paul Celucci changed the funding structure of the MBTA from arrears to a revenue-based budget due to his approval of a “Forward Funding” chapter under the Acts of 1999. Through this new funding structure, the MBTA would only receive 20% of the state’s annual sales tax revenue and virtually nothing else. Even worse, over $5 billion in debt from the state was transferred to the transit system. So, rather than using revenue to cover all annual costs at the end of each fiscal year, the state legislature only gave the MBTA what was already allotted to them through their portion of sales tax revenue. With the addition of billions of dollars of debt and the elimination of state-funded reimbursements for additional costs, the MBTA found itself facing an increase in fare prices. This increase in fare prices, as well as numerous unforeseen crises that led to starker decreases in ridership, ultimately led to a decrease in ridership for MBTA services. 

The sales tax has shown itself to be an unreliable and unsustainable source of annual revenue in the wake of national and global crises such as 9/11, the 2008 financial crisis, the COVID-19 pandemic, and other dips in the economy that have stifled the projected growth in ridership and revenues that the MBTA and state legislature were counting on.

Destined for Decrepitude: Big Dig Debt and the Demise of the MBTA

“But why did the state transfer their debts to the MBTA?”  Great question! Have you ever heard of the Big Dig? 

The Big Dig was a massive project conducted to try to eliminate the record-high traffic that plagued Boston by moving the Central Artery of 93 underground and adding another route to the airport via the Mass Pike. Notorious for going wildly over budget and years behind schedule, the Big Dig was the most expensive highway project conducted in the United States. 

To mitigate the burden of debt accrued during the Big Dig, the state transferred what was estimated in 2015 to be $5.2 billion in principal debt and about $4 billion in interest to the MBTA. By transferring these debts to the MBTA and overhauling its budget structure, the state legislature essentially introduced a new problem to the MBTA that wasn’t even their responsibility: debt for roadway projects. Not to mention that over a quarter of the annual operating budget of the MBTA now goes towards reducing the Big Dig debt and interest that continues to accrue each year. 

The MBTA has been struggling to pay their bills since their change in funding structure in 2000, and now they are facing even larger deficits due to the hefty costs of debt payments, safety plan implementation, and operating expenses. 

According to the MBTA’s CFO Mary Ann O’Hara, as of 2024, “the projected MBTA budget deficit discussed… for the next fiscal year was $182 million” and this number could amount to $859 million over the next 5 years.” The debt that the MBTA continues to pay for “accrues faster than the rate at which the MBTA is able to pay off these debts.” Translation: the Big Dig debt is growing faster than we can pay it off. By the time the debt is paid off, which is projected to be in 2040, the MBTA is expected to have paid more than $8 billion in debt and interest payments. That’s $8 billion in costs that were not supposed to be the responsibility of the MBTA; $8 billion that could have been spent chipping away at the myriad safety issues plaguing the transit system, or upgrading its archaic equipment.

These deficits can be tied back to the MBTA’s budget switch to “forward funding”  back in 2000. This change in funding structure has cost the MBTA a lot of money due to the continual failure of sales tax revenue to make up the difference between money owed and money made by the MBTA each year. The sales tax revenue is not only “falling below expectations,” but is “growing at less than half at the expected rate,” with O’Hara estimating “a loss of up to $15.5 billion in expected revenue”. 

A series of unfortunate incidents: the MBTA's safety issues

The decrease in ridership and revenue on top of the 2000 funding restructure has only exacerbated the transit system’s inability to run both efficiently and safely. 

Starting in April, 2022, the Federal Transit Administration (FTA) began an in-depth inspection of the MBTA due to safety concerns following a series of incidents within the transit system. 

Some of the incidents that prompted the FTA’s 2022 investigation include:

Additional issues arose throughout the FTA’s investigations and their release of a preliminary report, which culminated in a 90-page report  later that year in August, ordering the MBTA to increase safety checks, increase the number of employees under the MBTA, and to improve communication with their employees.  These orders from the FTA are big asks for any agency, but are an especially large task for the MBTA given their lack of funding. Ultimately, this report sparked concerns over how the MBTA would be able to comply with FTA standards and what might happen if the transit system was unable to meet the strict timelines. 

Between August, 2022, and February, 2023, the FTA rejected over half of the MBTA’s plans to increase the safety of the transportation system citing that implementation of the plans would take too long. Steve Poftak, the MBTA general manager at the time, resigned a year before his term was set to end, after which numerous new safety issues occurred, putting the lives of T riders and workers at risk. 

Some of the safety issues that the MBTA faced during the FTA’s continued investigations include:

Following these incidents and others, the FTA declared that there is a “‘substantial risk’ of death or injury to MBTA workers” in April, 2023. Shortly after this, the MBTA was given about 2 months to create new safety measures for their workers to submit to the FTA. An amended work plan was submitted in May, 2023, by the MBTA and was once again rejected by the FTA. The final work plan that was submitted on June 5, 2023,  was only approved by the FTA “conditionally.” 

On June 9, 2023, Joe DeLorenzo, the Associate Administrator and Chief Safety Officer of the Office of Transit Safety and Oversight within the Federal Transit Administration, wrote an email to the new general manager of the MBTA, Phillip Eng.  DeLorenzo stated that the FTA approved the new work plan, but was still concerned about the risks and safety of the Right of Way (ROW). 

The email ended with a warning to the MBTA: “If MBTA fails to appropriately implement the Work Plan within the next 60 days, ROW access will be restricted.”

The FTA’s involvement in MBTA safety measures did not end here. In September, 2023, DeLorenzo issued another letter via email that called for immediate action to prevent future safety incidents with MBTA workers. In this letter, DeLorenzo wrote, “Despite taking these actions, over the last month MBTA has experienced four additional near miss events, including two incidents on the Red Line and two on the Green Line. The MBTA also failed to report these near misses as required by the Massachusetts Department of Public Utilities (DPU). Based on these incidents, FTA has determined that a combination of unsafe conditions and practices exist such that there is a substantial risk of serious injury or death of a worker.” 

The implementation of new projects to address the safety issues outlined in the FTA’s reports has increased the demand for adequate funding, but given the current MBTA funding structure, this task won’t be easy.   

Where we're at now: The MBTA's operating budget

As of June 2023, the approved FY2024 operating budget for the MBTA was $2.72 billion “that will sustain levels of service while making strategic investments in safety, staffing, and hiring, key capital investments including station and accessibility needs, and design work required for a future connection of the Red and Blue lines… The T’s FY24 budget also includes $68 million to support the T’s response to the Federal Transit Administration’s Safety and Management Inspection report.”

This budget also allocated funds from the new Fair Share Amendment to initiatives set forth by Governor Healey and her administration, including:

  • $181 million for bridge repairs, station and accessibility improvements, and exploring a Red-Blue line connection
  • $5 million to study(!) means-tested fares

That’s a lot of money, right? Not necessarily. 

A lot of these proposed funds are — to put it lightly — a waste of resources. 

The $5 million to study a decrease in fare prices for lower income residents could be used to actively address the safety issues, residual debts, or you know, just implement lower fares for the riders who need it most. Why are we spending $5 million to study policies we know are wildly popular and effective?  

According to O’Hara, the $2.72 billion that the MBTA approved in their FY2024 budget plus the $186 million being allocated by Governor Healey still isn’t enough to cover the costs of necessary MBTA expenses. O’Hara anticipates that once FY 2025 rolls around, the funding from Beacon Hill will be completely exhausted.

There is also that pesky issue of debt lingering in the background and in FY 2024: 19% of all spending for the MBTA will be in debt service costs.

Per an audit conducted on June 20, 2022, it was determined “if the MBTA did not borrow another dollar from the end of June 2022 until 2053, the interest on this debt would cost it an estimated $2.26 billion in interest, for a total cost of $7.62 billion”. 

Healey’s proposed budget still needs legislative approval to be put into effect and actually given to the MBTA. 

What can the MBTA do to try to make up for their lack of funding?

The MBTA has plans to try and increase their revenue, including cutting fares for low-income riders, implementing a simplified fares system, and — you guessed it — promoting increased ridership. 

The MBTA still has major concerns going into the new fiscal year, including deficits, reliance on one-time funds, ridership that has yet to recover from pre-covid numbers, and gaps in information that make reviewing proposed budgets a hard task. The main concern for the MBTA is still going to be the rate of growth in revenue in comparison to the necessary expenses that keep the T up and running.

Some of the funding in the MBTA’s operating budget and in Healey’s allocations will also be going towards the MBTA’s efforts to promote more safety and to address the FTA’s concerns by adding 644 new jobs related to safety, representing over half of the jobs that have been budgeted for. 

The MBTA also approved a new Capital Investment Plan in July 2023 for FY 2024-FY 2028, with two main goals:

  1. Improve safety and reliability and modernize existing assets 
  2. Expand the transportation network to increase capacity or provide riders with more options across transit modes 

What about federal receivership?

Federal receivership would put the control of a local asset (the MBTA) into the hands of a federal entity (the FTA). 

If the MBTA fails to address the issues outlined in the FTA’s safety report, which is a possibility given the deficits in the MBTA’s budget, the transit system could be at risk of federal receivership, which is not a great thing to hear. 

But what does all of this mean in terms of impact on the people of Massachusetts? 

More involvement of federal officials in state affairs has never been a good idea for issues such as the transit system. A federal takeover would only lead to more shutdowns of T-lines, higher fares, high rates of personnel cuts, and “continued degradation in service quality and reliability” — which was the outcome of D.C.’s Metro, the only other federal takeover of local transit. 

The issue of federal receivership of the MBTA is not one to be brushed aside. Like with the D.C. metro, this will impact the lives of thousands.  

As much as we hate to leave you on such a gloomy note, we promise to keep you all updated on the MBTA and their budget as Healey’s proposal is reviewed by the state legislature.

Blog post by Sydney Mascoll, Act on Mass Political Organizing Intern Spring 2024