Boston, MA – March 24: The MBTA Blue Line. (Photo by David L. Ryan/The Boston Globe via Getty Images)
Dubbing persistent debt the "original sin" saddling public transportation, a watchdog group called on Beacon Hill to make debt relief a central part of the next MBTA financial rescue plan.
The MBTA Advisory Board, an independent group that represents Massachusetts cities and towns that help fund the T, took a deep dive through the history of public transit in Boston for its latest report about funding woes, reaching as far back as the quasi-public control of the Boston Elevated Railway that began in 1918.
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The 66-page analysis highlighted nine public takeaways, including a warning against austerity measures that trim MBTA spending and a declaration that "debt is toxic to public transportation."
"In examining the history of how public transportation has been governed, funded and overseen in greater Boston for the past 106 years, in addition to the nine lessons described above, one other is paramount — the original sin of public transportation in Boston is debt, or more specifically a lack of debt relief," MBTA Advisory Board Executive Director Brian Kane wrote.
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The state inherited the Boston Elevated Railway's debt when it effectively began leasing the predecessor agency in 1918, Kane wrote. When the BER gave way to the Metropolitan Transit Authority in 1947, the MTA inherited even more debt. Additional debt went to the MBTA when the agency took over in 1964, and then again in 2000, when the T also took on about $1.7 billion in debt from Big Dig-related transit mitigation projects.
Costs to manage that debt continue to increase, according to Kane. The T spent about $292 million on debt service in fiscal 2001; by fiscal 2024, the budget for debt service had nearly doubled to $517 million.
In fiscal 2025, debt principal and interest payments represent about 23% of the T's $2.5 billion operating budget, Kane wrote.
"Perhaps the simplest and quickest way to solve the Authority's underlying structural and cyclical deficits [is to] repent for public transportation's original sin, and relieve it of its crippling debts," he said.
The report concluded that the "most important factor to success" is strong leadership from the governor, secretariats and MBTA higher-ups. Other takeaways highlight the link between large-scale economic trends and public transportation financing, the value of independent oversight and the need for revenue to factor into any reforms.
Kane worked at the MBTA from 2011 to 2018 under former Govs. Deval Patrick and Charlie Baker in roles including operating budget manager and director of operations analysis. He's led the outside Advisory Board since 2020.
His recap of MBTA funding history is dotted with skepticism about the effects of past reform efforts.
For much of the 20th century, the MBTA would ask municipalities and then the state to backfill its deficits. That shifted in 2000 when the T embraced a plan known as "Forward Funding," under which the state guarantees a share of sales tax revenue to the MBTA each year.
Initially, officials were optimistic that the change would reinvigorate the T, but many experts — including leaders at the MBTA — say the plan failed to live up to expectations because of weaker-than-forecast growth in sales tax collections.
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"The MBTA achieved a balanced budget without financial gimmickry once under Forward Funding, in fiscal year 2001, and has been in a structural deficit ever since," Kane wrote.
Kane described the eight-year stretch during former Gov. Michael Dukakis's second and third terms as "perhaps the most stable period of leadership in the 60 years of the [MBTA]'s existence, as well as among its best periods of performances."
His assessment of later administrations was more critical: Kane said Govs. William Weld and Paul Cellucci made "privatization of MBTA activities and cost cutting" their priorities, and he dubbed the Gov. Charlie Baker era as "experiments in the effects of austerity on the MBTA."
"Whereas during the 3 Dukakis administrations, a stable executive leadership seemed more focused on performance, operational efficiency and expansion, during the Weld/Cellucci/[Jane] Swift administrations a more inconsistent executive leadership seemed more focused on privatization, cost cutting and the Big Dig than on other matters," Kane wrote. "Similarly, during the [Mitt] Romney and 1st and 2nd Patrick Administrations, unstable leadership at both the secretary and GM levels seemed more focused on implementing, or at least attempting to show results from, so-called reforms, cost cutting and deficit management rather than on performance, operational efficiency and or customer service."
The new report about public transit's history of hamstringing debt comes ahead of renewed debate about transportation financing expected as soon as early next year.
Gov. Maura Healey created a task force — of which Kane is a member — to review transportation funding options, and the group must file its report by the end of the year.
Meanwhile, after regularly turning to Beacon Hill for financial assistance, the MBTA is careening toward its latest financial crisis. For years, the agency's expenses have outpaced its revenues, and the mismatch has gotten even worse after the COVID-19 pandemic permanently shrunk ridership.
T budget-writers forecast a gap of nearly $700 million in the fiscal year that starts July 1, and they've said the agency could run out of cash within months unless it receives more help or significantly trims spending.
Kane invoked the 2009 "Born Broke" report he authored as a budget and policy analyst for the Advisory Board, which detailed lackluster growth in state sales tax revenue and debt stifling the T's budget.
"In 2009, when the original Born Broke was written, a political window of opportunity opened for all of those who cared to finally fix the MBTA’s governance, funding, and oversight for good. That obviously did not happen," he wrote. "Heading into 2025, when the MBTA has a strong General Manager, and a solid Board of Directors, perhaps this time we can get the funding and oversight pieces correct? History shows us what works and what does not work. The question is, can we get it right this time?"
