MBTA officials are weighing whether persistent reduced ridership warrants a more pessimistic fare revenue projection in the upcoming budget, and one overseer thinks the sluggish outlook might just be “the new normal.”
Almost exactly three years after the COVID-19 crisis pushed public transit ridership numbers off a cliff, average systemwide use of the T remains only a bit more than half of pre-pandemic levels. The rate of recovery has slowed in the past year, driven in part by widespread service disruptions and a month-long shutdown of the Orange Line.
That trend creates major financial pressure for the MBTA, and chief financial officer Mary Ann O’Hara on Thursday floated the idea of expecting even less income from paying commuters in fiscal 2024.
Budget-writers at the MBTA in recent years have used a trio of ridership models or “scenarios.” The most optimistic of those would project about $596 million in fare revenue in fiscal 2024, the moderate option would estimate $500 million, and the most negative suggests $444 million.
O’Hara said based on an updated model that considers ridership data in recent months, officials should consider budgeting for $418 million in fare revenue in FY24 — a bit below even the lowest of the three “scenarios” the MBTA previously used for its long-term forecasting efforts.
“If you look back to March of 2022, we ranged anywhere between 49 percent to 55 percent of pre-pandemic levels [since then],” O’Hara said during a subcommittee meeting on Thursday. “If actual fare revenue growth does not keep pace with the growth assumed in the established fare revenue scenarios, there’s a risk fare revenue collections could dip below even the lowest projections.”
Ridership patterns vary across different modes of transportation. The T’s core subway system is performing worst, with ridership in the first two quarters of FY23 just 51 percent of pre-pandemic levels — 42 percentage points below the projection in the most optimistic ridership model and 12 percentage points below the most pessimistic model, according to data O’Hara presented Thursday.
Bus ridership has rebounded the most, with 72 percent as much in the first half of FY23 as before COVID-19 hit, but even that lagged all three forecasts.
The only MBTA offering that has proved significantly more popular than all projections is its commuter rail network, where officials reshaped the schedule in 2021 to offer more trips during the day and fewer trips at the traditional morning and evening peaks. In the first two quarters of FY23, the commuter rail transported an average of 69 percent as many passengers as it did before the pandemic, surpassing both the pessimistic and moderate models.
Betsy Taylor, who chairs the MBTA board of directors and its audit and finance subcommittee, responded to O’Hara’s presentation, “I personally think that where we are is the new normal.”
Taylor’s reaction drew criticism from Greater Boston Chamber of Commerce President and CEO James Rooney, who argued that workers, businesses and residents “depend on the MBTA every day.”
“Our ability to solve congestion, housing, climate change, economic equity, and other major public policy issues depend on having a safe, reliable transit system. The latest comment from the T board chair that reduced ridership levels is the ‘new normal’ is disappointing and frustrating,” Rooney said. “A successful business or government agency culture is built on resilience, agility, and optimism — not despair to current challenges. Instead of being a victim, the leaders at the MBTA need to offer ridership goals, a strategy, and strong results. The people of the Commonwealth — the T’s riders — and the T’s workforce deserve inspirational leadership and a safe, reliable, and accessible MBTA.”
The T is operating without a permanent general manager as Gov. Maura Healey’s search for that person, which began in December, continues. Longtime deputy GM Jeff Gonneville currently holds the top job on an interim basis.
Healey also pledged in her inaugural address to hire a new transportation safety chief by March 6 to address issues across different modes, and that person has not yet been announced.
“It’s just the process. It’s a process where we want to find the very best people to fill these jobs, both the GM position and the transportation safety chief position,” Healey told reporters on Wednesday. “We are well on our way through that process, and I hope to have announcements very soon, but I think the process has taken the time necessary in order to make sure that we’re getting the very best talent here into the state.”
She added that she expects to make an announcement in “days, not weeks.”
Other transit agencies around the country have struggled with lost ridership as a result of COVID-19 and the long-term changes it inflicted to work and travel patterns. The MBTA’s woes also come alongside enormous safety and reliability challenges.
Buses and subways continue to operate on a reduced weekday schedule due to risks flagged by federal investigators, staffing shortages or both, leaving riders still on the system to grapple with long waits, unexpected disruptions and occasional shutdowns.
Red, Blue and Orange Line service cuts implemented in June will remain in place for the foreseeable future. The MBTA announced Thursday that its spring service schedule will make minor adjustments to departure times on the trio of heavy rail lines, but noted that “time between trains will be similar to their current frequency.”
The problems also offer drivers little incentive to trade their traffic-filled commutes — which, unlike the T, are effectively as crowded as they were before the pandemic — for transit, even as the Healey administration and others tout the importance of getting motorists out of cars to achieve the state’s greenhouse gas reduction goals.
If ridership remains stuck on its current plateau, it would add to the financial challenges at the T, an agency that for years has struggled to balance its operating budgets, faces enormous unmet maintenance and safety needs, and has relied on periodic infusions of state aid to get by.
In FY19, the last full spending cycle before COVID-19 hit, the MBTA collected $671.7 million in fares, representing about 31 percent of all revenue for the agency.
MBTA officials will use a remaining pot of one-time federal aid to help plug holes in the budget this upcoming year and the year after, but the most recent internal projections envision an operating budget shortfall as high as $475 million in fiscal year 2026.
On top of the federal aid, lawmakers and former Gov. Charlie Baker agreed to steer $378 million in state dollars plus $400 million in bond authorization to the T to help the agency make necessary safety improvements in the wake of a Federal Transit Administration probe that found widespread problems.
MBTA Chief of Quality, Compliance and Oversight Katie Choe said Thursday that the T has so far spent about $91 million of that money on “new and unbudgeted” safety initiatives, and committed to more spending that has not yet been executed.
Scott Darling, an MBTA board member who chairs the safety subcommittee, asked Choe if the funding so far is enough.
“No, I think we will need more, particularly as we’re looking at whether — I think we will need more, but I can’t tell you how much more,” Choe replied. “It does depend, too, on where we draw the box. For instance, are we going to say all track maintenance that we do moving forward qualifies as an FTA special directive response, or is it only certain things?”
Darling urged Choe and her team not to delay any requests for additional resources.
“If you need more money, get to us,” he said.
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