New Report Outlines Massachusetts’ Experience with State Receiverships
Proposes legislation for MBTA emergency control board
BOSTON – As a special gubernatorial panel reviews a broad slate of operational issues at the MBTA, Pioneer Institute is releasing a report that outlines a roadmap for revamping the Authority governance, considering lessons learned from other emergency situations in Massachusetts including the Chelsea receivership and the control board model employed in Springfield.
Massachusetts Experience with Hard and Soft Receiverships
The special panel, which will review reports internal and external to the T, can play a helpful role in synthesizing diagnostics and proposing changes to operations, communication and future planning and investment. It can also lay out long-term governance changes that can ensure better decision-making.
“Ask any T rider or Greater Boston employer and they will tell you that we need emergency action to fix the T,” says Jim Stergios, executive director of Pioneer Institute. “The lives of over a million people a day have been disrupted, resulting in the virtual closure of our city, and the loss of income and tax revenue. We must approach fixing the T with urgency that befits the seriousness of its impact on our residents and economy.”
Massachusetts’ Experience with Hard and Soft Receiverships draws lessons from past emergency interventions to define the governance and decision-making mechanisms needed, on an interim basis, to radically improve the quality and dependability of T operations.
The paper outlines why the control board model used in Springfield, not a Chelsea-style receivership, represents the best path for the T. Unlike receivership, the control board model does not break so-called Chapter 150E collective bargaining protections on wages and benefits. The control board is a more consultative body as it undertakes reform. Both these characteristics make it more palatable to legislators, and reforms undertaken in a more consultative fashion stand a greater chance of lasting beyond the board’s temporary mandate.
Massachusetts’ Experience with Hard and Soft Receiverships outlines the need for emergency legislation:
- Establishing an emergency, time-limited board composed of individuals with extensive knowledge of transit, finance, technology and customer service would signal the urgent need to bring the T to a state of good repair.
- The emergency board should focus solely on maintenance and postpone expansion commitments. It should have enhanced powers to: (1) swiftly rationalize fares and fees (up or down) based on business considerations; restructure the bus service and operate with broad control over work rules; (2) re-open procurements and shift greater risk to vendors; (3) suspend prohibitions on competitive bidding; and (4) bring transparency to the T’s retirement fund and shift its asset management to the state pension system.
- Allow the emergency control board to remain in place until the T meets benchmarks for on-time arrivals and other performance metrics.
Finally, the paper closes with lessons learned from the Chelsea and Springfield receiverships that are applicable to the current MBTA emergency. These include the aforementioned enhanced powers, which would need to come through legislation; the need for technical input from the state’s budget, comptroller and revenue offices, as well as the state treasurer; and regular public updates on progress toward key performance metrics, among other recommendations.
“Today’s T stands in stark contrast to Massachusetts’ technologically savvy, knowledge-based economy,” said Stergios. “We need a T that runs on time and does not turn the lights out on businesses and jobs. This must get done now; kicking the can further down the road is not an option.”
Pioneer Institute is an independent, non-partisan, privately funded research organization that seeks to improve the quality of life in Massachusetts through civic discourse and intellectually rigorous, data-driven public policy solutions based on free market principles, individual liberty and responsibility, and the ideal of effective, limited and accountable government.