«
»

“We’re broke”

http://www.boston.com/news/local/article…

The MBTA raised $70 million last year by increasing fares on buses, trains, and subways. But it will not be enough money to prevent an estimated $75 million deficit in the spending plan for the budget year that begins in July.

“We’re broke,” Daniel A. Grabauskas, general manager of the Massachusetts Bay Transportation Authority, said yesterday.

…he would not discuss how the agency will fill the gap in the $1.4 billion budget…

I think that I could probably cut 5.4% from the MBTA budget and balance the books.

Of every dollar it spends, 27 cents goes to pay off debt. Because fares pay for only about a third of operating costs, the transit system has relied on state subsidies to keep the trains and buses moving.

Looked at another way, every penny paid by customers immediately disappears into debt repayment, and 100% of operating costs are welfare from the taxpayers.

“It seems to be an annual, very difficult challenge, to meet our bottom line, while trying to maintain our level of service and the quality of service,” Grabauskas said.

When I was young, I learned an important lesson: when everyone you meet treats you in the same way, it’s not them, it’s you.

The T has also been a victim of rising energy and labor costs …

Oh, boo hoo hoo.

So has every business in the United States, and yet, they manage (SmartFlix has had labor, energy, and postage costs rise over the last four years, and we’ve kept our prices flat, and have grown volume and revenue).

If only there was some fat to cut in the MBTA.

This entry was posted on Wednesday, February 6th, 2008 at 9:50 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

5 Responses to ““We’re broke””

  1. mattymatt Says:
    February 6th, 2008 at 2:14 pm

    If anyone’s talking about “quality of service” on the T, it’s clear that they’ve never ridden. If it’s more passenger-fares that they need, why don’t T officials try boarding the subway themselves once in a while?

  2. J Says:
    February 7th, 2008 at 11:51 am

    “I think that I could probably cut 5.4% from the MBTA budget and balance the books.”

    Okay, I take you up on that challenge. The MBTA’s operating budget is online at http://www.mbta.com/about_the_mbta/financials/?id=1054 What would you cut, specifically, to get $75 million?

  3. Jered Says:
    February 7th, 2008 at 2:38 pm

    [quote comment="122453"]Okay, I take you up on that challenge. The MBTA’s operating budget is online at http://www.mbta.com/about_the_mbta/financials/?id=1054 What would you cut, specifically, to get $75 million?[/quote]

    I don’t have to read the budget to guess that one of the top 5 answers will be “the union employees”. :-)

  4. miriam Says:
    February 7th, 2008 at 6:27 pm

    Same old, same old.
    What debt do they have, exactly? Sub-prime loans?

  5. J Says:
    February 11th, 2008 at 3:55 pm

    “one of the top 5 answers will be “the union employees”. :-)”

    Fair enough – which employees would you cut? What department(s)? How would you make up for it in Operations? Also, how would this affect the T’s pension plan? Union employees get hefty compensation if laid off. I’m curious to know what you’d do.

    “What debt do they have, exactly? Sub-prime loans?”

    The MBTA carries debt from past capital projects, such as subway and commuter rail expansions, buying new buses, rebuilding bridges, etc. Mostly in the form of 30-year revenue, sales tax, older general obligation bonds, and some commercial paper. Outstanding principal is something like $4 billion; add in interest and the total is closer to $8 billion.