Gov. Charlie Baker’s updated annual budget would direct less money to the MBTA’s operations than the version he filed before the pandemic hit Massachusetts, but the cash-strapped transit agency is still in line for a potential funding boost.
T officials adopted a spending plan in May that made conservative estimates about state financial support, so the MBTA would receive about $59 million more than it baked into its fiscal year 2021 revenue numbers under the latest operating budget transfer Baker proposed.
While that final figure could still vary, any additional funding could make an impact on the T’s outlook as it weighs major service cuts — plus the possibility of fare hikes and layoffs down the line — to help close an impending budget gap of hundreds of millions of dollars due largely to the loss of riders in the pandemic.
Baker’s $45.5 billion revised fiscal year 2021 spending plan still includes a fivefold hike on the fees imposed on ride-hailing services such as Uber and Lyft, from 20 cents per ride to $1 per ride, but that added revenue is not set to start flowing to the MBTA until the following fiscal year.
Altogether, the new plan would transfer about $1.27 billion to the MBTA’s operating budget: $1.1 billion from dedicated sales tax revenue, $127 million in operating assistance, and another $40 million in sales tax stemming from a plan to accelerate collections.
That sum is $64 million more than the T received in FY20, but $107 million less than it would have under Baker’s original fiscal 2021 spending plan that predated the pandemic.
The administration said the decline stems from reforecast sales tax revenue, decreasing the amount transferred to the T by $34 million, and because revenue from the ride-hailing fees now would not be available until fiscal year 2022.
Baker hinted Wednesday he does not see other revenue sources as necessary, instead citing plans at the MBTA to alter services offered as a more viable approach and saying he would veto any tax increases.
“There are certain routes (where) we’ve seen really significant ridership return on the bus system, and other routes where we basically don’t have much of anybody riding on it,” Baker said. “One of the things the T’s talking about, which I think is reasonable, is whether they should move some of their assets from the places where no one’s riding it to some of the places where people are until such a point in time where more people do ride it. Those are perfectly appropriate conversations, given the current state of play, for them to have.”
The administration also bumped down its forecast for how much revenue the state will gain by increasing fees on transportation network companies, or TNCs. Use of those platforms has also decreased during the pandemic.
Baker’s proposal would divide money from the fees, with 30 percent going to municipalities and 70 percent going to the state for use on the T and other transportation needs. Under the original FY21 budget, officials projected it could add $73 million to the MBTA’s budget in FY21, but the updated version anticipates a $55 million transfer starting in FY22.
In January, both Uber and Lyft slammed Baker’s proposed fee increases as damaging to riders and unlikely to address the state’s transportation challenges.
“Raising rideshare taxes by over 400 percent during the pandemic could hurt low-income riders and reduce the transportation options available, especially for those outside Boston,” Lyft said in a statement Thursday. “We support public transit, but this public policy plan must be revisited.”
As part of its transportation revenue package approved in March, the House authorized changing TNC fees to $1.20 for each non-shared ride and $2.20 for each luxury ride. That package included roughly half a billion dollars in tax and fee increases, including a 5-cent gas tax hike and a 9-cent diesel tax hike. Senate Democrats opted against taking that bill up, although it’s technically still alive since formal sessions run through the end of 2020.
Bailed out recently with federal funds, the T still faces a harrowing outlook, with a budget shortfall of $308 million to $577 million forecast to hit in fiscal year 2022 and then potentially rise in subsequent years.
Like transit agencies across the country, the MBTA has struggled with sharp declines in ridership since COVID-19 hit, punching a massive hole in the fares that typically represent about a third of the T’s total revenue.
Crowds had only returned to about 25 percent of pre-pandemic averages on subways and 40 percent of pre-pandemic averages on buses by late September.
MBTA officials have warned the service cuts they will impose to cope with a massive budget deficit are likely to reshape the transit system for a considerable amount of time, if not permanently.
If the agency cuts down its fleet sizes to lower maintenance or capital costs, it would take substantial effort to procure new vehicles in a ramp-up. Much of the T’s labor is skilled, and some positions take more than a year to hire and train.
“Once (changes) are implemented, it could potentially take months to years to re-add the service, depending upon which mode, the scale of reductions, the actions that are taken and the financial certainty we have at the moment when we start re-adding service,” MBTA Chief of Operations Strategy, Policy and Oversight Kat Benesh said at an Oct. 5 board meeting.
The long-term outlook for ridership patterns on the MBTA remains unclear, but Baker argued Wednesday that commuters should not hesitate to use public transit, and said he has ridden the Blue Line several times since the outbreak began.
“I believe it is safe, and there are studies that have been done of multiple public transit systems in the U.S. and around the world that basically say riding the public transportation system is safe,” Baker said.
He paused at that point and stepped back from the podium to imitate “what people do when they ride” transit: standing still and gazing into what Baker pretended was a phone he held with both his hands.
“Honestly, I can’t think of a less risky activity,” Baker said. “There’s not a lot of talking. There’s certainly not a lot of yelling. There’s very little engagement. Most people have their heads down buried in their phone or a book or a newspaper, and there’s plenty of distance. I would really like to see people give the public transportation system a try.”
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