MBTA Seeks to Hike Fares in Fall

The Massachusetts Bay Transportation Authority, which aims to boost transit fares by 10% to 20% in the fall, yesterday approved moving forward with a public hearing process on the planned price hike.

After the agency’s monthly board meeting, Massachusetts Secretary of Transportation James Aloisi told reporters that the MBTA would need to increase fares by 10% to 20% this fall even if the legislature allocates $160 million to the authority to help it meet expenditures, according to Aloisi spokesman Colin Durrant.

“This additional funding alone will not provide long-term fiscal stability to the MBTA,” Aloisi told the board. “In particular, it will not help us eliminate the authority’s enormous debt burden. Without significant reforms that will result in real cost savings — especially by bringing parity to health and pension benefits — combined with a more sustainable revenue source, the MBTA will continue to face fiscal instability.”

The $160 million state bailout would rescind agency layoffs, cuts in benefits, and supply and service reductions that the MBTA’s advisory board approved in late May. High debt levels strain the authority’s finances as more than 30% of its revenue in fiscal 2010, which begins July 1, will go towards debt service costs. The agency has more than $5.2 billion of debt.

The MBTA last increased bus and train fares by 27% in January 2007.

In other news, Gov. Deval Patrick yesterday released a revised fiscal 2010 budget proposal that closes a $5.1 billion deficit, up from $3.5 billion when he first introduced the spending plan in late January. The updated budget proposal includes nearly $800 million of additional spending cuts on top of an original $1.6 billion expenditure reduction.

To ensure that the state has rainy-day funds beyond fiscal 2010, Patrick now plans to grab $225 million of reserve funds as opposed to $489 million.

The governor’s revised budget proposal does not include an increase in the sales tax. Lawmakers in the House and the Senate last month approved increasing the sales tax to 6.25% from 5% to generate $275 million for transportation needs.

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