It’s like déjà vu all over again.
The MBTA is staring down the very real prospect of a budgetary crisis. But surplus revenue from the state’s so-called millionaire’s tax could be the struggling transit agency’s saving grace.
Those were both true statements last year. They are this year, too.
Last month, the T released new figures warning of a $560 million deficit for the fiscal year that begins in July, and a $732 million shortfall for the following year. Advocates began to sound the alarm bell, warning that lawmakers urgently need to find a way to stabilize the agency’s budget in order to prevent service cuts and staff reductions.
A couple weeks later, Gov. Maura Healey came out with her answer to the problem: a nearly $1 billion cash infusion, most of it coming from surplus “Fair Share” tax revenue the state had collected from its new surtax on incomes greater than $1 million. Under Healey’s budget proposal for the coming fiscal year, the T will receive $470 million from the state’s Commonwealth Transportation Fund and an extra $523 in Fair Share revenue.
During a meeting of the MBTA’s Audit and Finance Subcommittee on Thursday, T leaders praised the Governor’s plan, which still needs to be negotiated with lawmakers on Beacon Hill, saying it will stabilize the T’s budget through the next fiscal year and much of the following year.
“We are incredibly grateful to the governor for her budget proposal,” the MBTA’s Chief Financial Officer Mary Ann O’Hara said. “Assuming legislative approval, which is critical, we are funded through all of Fiscal Year ‘27 with cash flow all the way through the third quarter of [Fiscal Year] ‘28.”
Legislative approval, though, is far from a sure thing. Last year, when the T faced a similar financial crunch, Healey proposed a $687 million infusion for the transit agency. Following negotiations on Beacon Hill, less than $500 million was provided for the T in the final state budget.
Even if the State Legislature does fully give Healey’s proposal the green light, transit experts have warned that surplus Fair Share revenue is only a short-term fix to the T’s financial woes, because excess funds from the surtax are unlikely to recur next year. Non-profit advocacy groups, led by Transportation For Massachusetts, warned in a January report that once that funding dries up, the T will need new sources of revenue — such as congestion pricing — in order to stay financially afloat.
