MBTA Commuter Rail is Darkest Part of Revenue Picture for Transit Agency

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  MBTA Commuter Rail is Darkest Part of Revenue Picture for Transit Agency

Forge Park Station, image courtesy of 'Pi.1415926535'

Darkening an already-grim financial picture, MBTA officials on Thursday projected that the agency's expenses will grow faster than revenues until fiscal year 2027, at which point ridership still will not bring in as many dollars as before COVID-19 hit, with the T’s still-expanding commuter rail network faring the worst.

The latest five-year pro forma outlook that MBTA Chief Financial Officer Mary Ann O'Hara presented expects that the T's expenses will pile up more quickly than its income in FY24, FY25 and FY26 before the trend turns in FY27. She attributed the disparity to the costs associated with implementing new services such as South Coast Rail and the Green Line Extension.

A sharp decline in ridership during the COVID-19 pandemic shellacked the T's finances, leaving officials to use one-time sources such as federal American Rescue Plan Act dollars to close the gaps. O'Hara said as much as 23 percent of the total expenses the MBTA will make in FY22 and up to 13 percent of its projected expenses in FY23 are supported entirely by one-time revenues.

Ridership has been slow to return, most recently hovering just above 65 percent of pre-pandemic levels on buses and between 45 and 50 percent of pre-pandemic levels on the rail system.

MBTA officials do not expect that to change quickly. In the most pessimistic model that O'Hara presented Thursday, the agency would bring in 49 percent of pre-COVID fare revenue in FY23 and 68 percent in FY27. Even the most optimistic version anticipates only 93 percent of pre-pandemic fares -- still not a full recovery -- by FY27. Current ridership levels on the Franklin branch have not been posted by the MBTA but anecdotal reports indicate the service is sparsely used compared to pre-pandemic levels. With the MBTA’s fiscal woes, a project to double track the Franklin line as far as Dean Station ran into budget troubles and has not resumed.

"This five-year plan, and it is good to think out to the future, presents a serious financial challenge to the T and to this board," MBTA Board of Directors Chair Betsy Taylor said following the presentation. "It is hard to see how we can survive long-term with expenses growing faster than revenue. It shows how important it is to look at the operating costs of expansion projects. And finally, given this operating challenge, it raises to me the concern of how we will continue to find money to fund the needed safety and maintenance requirements of the T going forward as well."

O'Hara also said officials are exploring the idea of transferring $500 million in currently available one-time operating funds to the capital fund to "put money to use right away for the benefit of future service and safety," forecasting additional discussion of the topic in January.

Despite such challenges, advocates and legislators are pushing to expand service on the Fairmount branch and a new working group is pushing to revive a passenger rail link between North Adams and Boston. The MassDOT study, required under state law, will examine the benefits, costs and investments required to run passenger trains on tracks that today are used only for freight service. North Adams to Boston service ended in 1958 followed by Greenfield service in 1960.

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