The MBTA has recently proposed two scenarios for attempting to solve its deficit problem by cutting service and increasing fares (“JP seeks MBTA cuts solution,” Feb. 17). However, both scenarios have a fundamental flaw, in addition to the obvious unacceptable social, economic and environmental consequences: They are mathematically unable to solve the problem.
According to the MBTA’s own FY2011 Operating Budget Board Action document, the MBTA’s operating revenues have been:
- 2009: $506,754,638
- 2010: $526,321,819
- Expected for 2011: $518,573,967
This means that even a 100 percent, across-the-board fare increase—which exceeds both of the proposed scenarios—would barely exceed the debt service expenses, but only if ridership did not decrease significantly. This is economically impossible, since many of the riders can barely afford the existing fares, and would not be able to maintain their current use of the MBTA with the increased fares even if they wanted to.
As for the service cuts, even a 100 percent, across-the-board cut in service— again exceeding both of the proposed scenarios—would exceed the debt service expenses only if it did not result in a decrease in both fare-box revenue and non-operating expenses. This would be clearly an unrealistic assumption, since neither governments nor riders are going to pay when they do not get service.
Even the lesser service cuts actually proposed will lead to a downward spiral in non-operating revenue, because both of the MBTA’s proposed scenarios (especially the second) dramatically reduce the effective service area. The reduction in the number of areas in which buses and trains would run would greatly reduce the number of local governments and state legislative districts that are willing to pay for MBTA service.
Therefore, if the MBTA cannot obtain more funding from the state and local governments (significant federal funding being an impossibility in today’s political climate, and not necessarily being desirable even if obtainable), neither of the MBTA’s proposed scenarios will solve the MBTA’s deficit problems, and the MBTA will have no choice but to declare bankruptcy.
Both of the MBTA’s proposed fare increase and service change scenarios are not only socially unacceptable, but are also mathematically unable to solve the problem.