Mar 11, 2014 Updated: 4:20 AM
By Andrea Smardon | Friday, January 7, 2011
Jan. 7, 2010
BOSTON — MBTA officials have started the process of trying to close a more than $120 million budget deficit they’re facing in the next fiscal year. Numerous cost-cutting proposals were presented to the Department of Transportation’s finance committee this week, but General Manager Richard Davey is assuring riders that there are no immediate plans to raise fares.
“The bottom line is we have a significant budget deficit that we have to find a way to close. We’re operating off of the assumption that we will not close it with fare increases this fiscal year, and not with substantial service cuts,” Davey said.
One proposal is to sell future income from parking lot fees to investors in return for an immediate payment — essentially taking a tax-free loan on future revenue. Davey says the instant payback — as much as 325 million dollars — will help manage the MBTA’s rapidly escalating debt.
Davey said it’s important to start paying off the principal now, even if it means taking on future debt.
“It will incur slightly more debt down the road. But the problem is that the road is so steep for us the next five years, that I’m not worried about the road the next 15 or 20 years,” Davey said.
Another proposal is to reduce the number of operators on the red line subway trains from two to one. Davey says this has already been tested successfully on the blue and orange lines using closed-circuit televisions to monitor platforms.
T officials also want to save money by moving employee health insurance to the state’s Group Insurance System. Several unions are contesting that e move, and a hearing is scheduled later this month in Suffolk Superior Court.