Gov. Charlie Baker wants to transfer management of the MBTA's independent pension fund to the board that controls the rest of the state's retirement investments, and that's just one of the changes Baker says can reign in the cost of operating the T.
The governor will file a bill in January for legislative approval to move the MBTA's pension fund over to the state's Pension Reserves Investment Management Board, a move intended to save the system that's losing almost $90 million a year.
"The bad news: The T was, and still is, in very tough shape," Baker told reporters Wednesday.
Baker said the T's pension system is "in freefall" and doesn't earn enough to pay out benefits and stay sustainable.
"This really shouldn’t be a surprise, since eligible employees paid in $47,000 in contributions, and take out $1.65 million in pension and healthcare benefits," Baker said. "After its recent round of reforms, new employees will contribute $67,000 to take out $1.49 million in benefits. Still a huge problem."
Baker held a press conference to give an update on the T on the one-year anniversary of the creation of his Fiscal Management and Control Board, the five-member panel he put in place to upend the T's problems and seek out solutions. The T board recently filed their report on what needs to happen to right the agency, including more privatization, more managers to oversee workers and greater capacity to responsibly carry out improvements and expansions.
"What they did not say was that the T was underfunded," Baker said. "It wasn't. It isn't. It won't be. What it was, was poorly lead and terribly managed."
Josh Ostroff, outreach director for Transportation for Massachusetts, a transit advocacy group, doesn't see much cause for optimism in how people experience the T right now.
"We need a much more proactive approach to investing in transportation to change that," Ostroff said. "We certainly haven't seen it yet. I don't see satisfaction changing for quite some time, unfortunately."
Ostroff said it's up to the Democratic-controlled Legislature to lead on making new revenue available to the MBTA for improvements. Baker has been adamant that new taxes for the T aren't the answer, so activists looking for increased tax dollars for the agency must seek help from either the tax-shy House (the more progressive Senate should be an easier sell) or a potential ballot initiative that would tax millionaires' earnings to fund transportation and education.
Baker ran through a litany of the problems board members have been asked to tackle since volunteering for the roles last year. Procurement of goods and services, Baker said, is still done on paper, as is benefit enrollment, bus route assignments and bus worker data.
Baker said much of next year's goals for the board will be more of the same types of changes, with more aggressive focus on operating expenses and performance.
"The proof is in the performance and that's one of the big challenges I think that all of us believe we need to make progress on this year, which is ensuring that the T delivers what we refer to as reliable and dependable service," Baker said.
Baker supports, and the T board is considering, plans to use private contractors to take over the MBTA's currently in-house warehousing and money collection systems, arguing that they will save money in the budget already suffering from a severe deficit. The Baker administration won a three-year relaxation of the state law that forces privatization plans to be approved by the auditor when the board was created. So far, the board has only decided to privatize the $6 million contract for its police dispatch system.
"But we will have to take Gov. Baker at his word that he doesn’t care whether a service is provided publicly or privately," Boston Carmen’s Union Local 589 President James O’Brien wrote in a statement after Baker's remarks.
"Privatization is not a magic wand," O'Brien wrote. "There is no magic wand to cure the lack of investment of the past 20-plus years. And privatization certainly does not guarantee cost savings or improved service for riders."
