The Massachusetts Bay Transportation Authority last week unanimously approved a $1.62 billion operating budget for fiscal 2010, a plan that depends on $160 million from the state to help close a deficit of the same amount.
Rising debt service costs and sluggish sales tax revenue dedicated to the MBTA account for the budget shortfall. The authority’s principal and interest payments will increase by $77 million to $445 million in fiscal 2010, which begins July 1. Debt service payments absorb nearly 30% of MBTA’s revenues, according to chief financial officer Jonathan Davis. The agency has more than $5.2 billion of debt.
To help address the deficit, the authority will now look towards the administration and legislators to allocate additional funds. Gov. Deval Patrick last month filed a transportation reform measure that would raise the state’s gas tax by 19 cents to 42.5 cents per gallon and dedicate six cents of that increase to the MBTA. The bill now sits in committees.
“The fiscal 2010 budget, although balanced, relies on an additional dedicated revenue source from the commonwealth of $160 million,” Davis told the board. “While new revenue sources from the commonwealth are by no means guaranteed, the authority has elected this option to close the identified budget deficiency and we are working closely with the administration and the legislature on the transportation reform and revenue bills currently under consideration.”
If the MBTA fails to gain the full $160 million, Davis said it will look to service reductions and possible fare increases. It last raised fares by 25% in January 2007.