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3/10/2008



Rail News: Rail Industry Trends

MBTA board signs off on proposed $1.5 billion budget


Last week, the Massachusetts Bay Transportation Authority (MBTA) board approved a $1.5 billion proposed budget.

Operating expenses would increase by $49 million, or 4.8 percent, compared with fiscal-year 2009. The increase is due in large part to higher energy and health-care costs, the agency said. Despite cutting $5.5 million in operations expenses, the authority still has a $75 million operating budget gap, which it plans to close through debt restructuring, deficiency funds and capital dollars.

But the financial woes will continue beyond FY2009. Since 2001 — when MBTA obtained a dedicated revenue source through a portion of the sales tax, and city and town assessments paid by communities in the authority’s service district — sales tax growth has only averaged 1.6 percent annually, compared with 6.5 percent in the 10 years prior to the agency obtaining a dedicated revenue stream. Since then, MBTA has relied on debt financing to fund a “significant portion” of its capital program, and now outstanding debt totals more than $5 billion, according to the authority.

Now, the spending plan has been forwarded to MBTA's advisory board for consideration.


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