REVENUE FOR THE T : RIDERS MUST SHARE THE BURDEN

Riders need the T ? The T needs their fares.

A petition is circulating expressing opposition to the MBTA’s proposed 6.7 percent fare hike — big deal. When has a proposed fare hike not been opposed by electeds ? The same electeds who see no difficulty in raising their salaries, and that of their staffs, which taxpayers pay for, somehow find fare hikes, which users pay for, in support of the MBTA budget more than troublesome. But why are taxpayers fair game and users not ? When the bankrupt rail lines of the late 1920s were taken over by the state, so that users could continue to have transportation, the takeover was never considered a free gift. If fares thereafter no longer funded the entirety of transit lines’ budgets, they were yet a significant contributor to transit revenue. That was the bargain : the taxpayers would assume the costs that users by themselves could not. Each interest would share. Otherwise there would have been no more transit.

The sharing of T costs would also be proportional. Users, taxpayers, and serviced municipalities each bore an agreed-upon share of the T budget. Thus as the costs of operating transit rise, so must the dollar contribution made by each interest. That was the agreement by which the current system was enabled.

I see no reason why this agreement should change and many reasons why it should not change. First, however, I include the long-ish column that I wrote about present MBTA financing about three months ago : https://hereandsphere.com/2018/12/29/massachusettss-transportation-future-part-3-more-revenue/?preview=true

All of the arguments adduced in that column by T mangers and elected officials continue in force now. They’re the basis of every dispute about T financing forward. The T confronts four major obligations, all to be met in the same five to fifteen year time frame : ( 1 ) bringing the current lineage to “state of good repair,” an $ 8.6 billion account; ( 2 ) expanding transit service on the Green Line and restoring to operation the Blue Line to Red Line connector between the Blues’ Bowdoin Station and the Red’s Charles Street stop; ( 3 ) converting the T’s bus fleet from diesel to electric as well as bringing mini-buses on line and more bus lines; and ( 4 ) funding the T employees’ pension obligations, presently a $ 97 million number. This last obligation is ramping up and crowding out T operations at the margins. Said Paul Brandley, the T’s CFO, “23 percent of the agency’s payroll costs now go toward pensions,’ a percentage that state Transportation Secretary Stephanie Pollack said was too high. “This is a risk to the T budget, but more importantly it’s a risk to our workforce,” she said. Brandley also said pension spending was budgeted at $97 million for fiscal 2019, but that number had to be increased to $103 million after the pension board lowered its estimate of investment returns from 7.75 percent to 7.5 percent. Brandley also ran some projections for 2022 which indicated costs would rise to $112 million if investment returns hold steady but could go as high as $137 million if returns tank.

The T’s employees are certainly entitled to all the benefits of contracts that they and T management bargain for and agree to. But are pension increases somehow exempt from the basic operating agreement that was set up in the 1930s and continues today ? And if users complain about T service, which remains resistant to full rider satisfaction, are users any less on the hook for the personnel costs of those services ? Let us suppose, for argument’s sake, that the T agrees to forego a fare increase and this throw the entire operating cost onto the taxpayers. Might they, too, not rebel ? Some advocates want the state to do just that : increase the gas tax and tolls on the Turnpike and bridges/tunnels. By what argument do they convince taxpayers who don’t use the T — including those who live and work outside the Boston metro — that they should bear the entire burden of increase of a system they do not use ?

I use the T. I would rather not pay more to use it. Yet even with a 6.7 percent hike, from a $ 4.20 round trip to a $ 4.48 round trip, the T is still a huge bargain compared to the cost of gasoline and of parking if I choose to use my car. It’s cheaper also than an Uber ride — by a lot. As for the argument that a 28 cent increase per daily ride, amounting to maybe $ 7.00 a month, will put the T out of reach of low income riders, I say : really ? And if, perchance, there are some riders who cannot afford an additional $ 7.00 a month, isn’t it about time that our electeds face the fundamental reform that is needed, namely enacting a $ 21/hour, gradual increase minimum wage ? At some point we have to consider this. The T’s proposed $ 7.00 a month hike is nothing compared to the $ 2,200 a month (and up) that most of the City’s two-bedroom apartments rent for. We can’t, or shouldn’t, tax or penalize landlords, who have their own costs to meet, but we can, and should, require employers operating in the city to pay their workers more, for the distinct advantage of operating within the City and not outside it. After all, the need to locate a business Downtown, or close by it, is great these days and growing greater. More and more businesses want to be in the center. Why should they not pay for it ? Not to mention that, the higher their employees’ paychecks, the better educated and more skilled employees they’ll have, and the more ready they’ll be to not jump from one company to another, thereby imposing large retraining and job-searching costs that really seem to me like complete waste of money and work time.

Perhaps businesses don’t like the $ 21/hour proposal ? (Of course they don’t.) Jeff Lyons, who managed Daniel Fishman’s Libertarian party campaign last year for State Auditor, suggests that the naming rights for T stations and bus stops be put out to bid, as is done these days with segments of state and Interstate Highways. It’s one-shot deal, but better that than nothing. The T currently derives some millions of dollars from advertising on buses and transit cars. Why not more ? Maybe the T might make naming rights a renewable, two-year matter. I can’t see huge revenue arising from it, but certainly several millions of dollars isn’t out of reach.

That said, the T’s current $ 2.10 transit fare and $ 5.00 commuter Rail price are incredible bargains. No competing “mobility service” comes close on price. It’s an enormous subsidy to users. We should count ourselves damn lucky that the T’s price isn’t double what it it now is.

—- Mike Freedberg / Here and Sphere

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