Public Statement on MBTA Ridership & Pension Costs

Share on Facebook
Share on Twitter
Share on
LinkedIn
+

Monday’s meeting of the MBTA Fiscal and Management Control Board brought bad news on two fronts:  T ridership is down and pension costs are up.  Neither is a new problem, but both will require bold action to fix.

Specifically, ridership was down 2 percent in the first quarter of the current fiscal year.  As a result, fare revenue came in more than 3 percent below projections.  In comments on the MBTA’s Draft Strategic Plan, Pioneer called for making increased ridership the document’s organizing principle, because it would result in more revenue, bring environmental benefits, and reduce traffic congestion.  To achieve those goals, the T must view all potential projects through a ridership lens, which means focusing on Red and Orange Line upgrades that will yield dramatic increases in capacity, and resisting those like South Coast Rail and an expansion to Gillette Stadium that will not.

Bold reforms are especially needed when it comes to the MBTA Retirement Fund.  The T (as opposed to its employees) is responsible for at least three quarters of pension costs.  Under the best-case scenario, its contribution to the fund will rise from $74 million in 2015 to $112 million in 2022, a 51 percent increase.  Actual 2022 costs could be as high as $137 million, which would represent an 85 percent rise over seven years.  Despite spiraling employer contributions, unfunded liability has risen from $49 million to over $1 billion in a decade.  To address this crisis, the MBTA should seek a legislative cap on employer contributions to the pension fund, hire an independent actuary and auditor to conduct an independent review of the fund, and seek legislative authorization to transfer T employees to the state pension fund.

About Pioneer
Pioneer Institute is an independent, non-partisan, privately funded research organization that seeks to improve the quality of life 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.

Get Updates on Our Transportation Research

Related Posts:

Public Comment on Allston Multimodal Project

We remain pleased with the decision of MassDOT to concentrate its efforts on the all at-grade option for the throat area of the Allston Multimodal Project as recommend by Pioneer Institute and others. However, we are deeply concerned that the construction will negatively impact commuters coming into Boston from points west.

MBTA’s Runaway Crisis: Legacy of Neglect Demands Comprehensive Reform

This week on Hubwonk, host Joe Selvaggi talks with Andrew Bagley, Vice President for Policy and Research at Massachusetts Taxpayers Foundation, about their recent report entitled, The MBTA Crisis is Complicated - Fixing It Will Be Too, diving into the details on why the T is in crisis and what the public must demand of policy makers to get it back on track.

The Green Line Extension Project Progress and Finances

/
Earlier this month, a Boston Globe article informed Boston residents…

Looming Budget Crisis Reveals MBTA’s Dependency on Federal Funds

/
The MBTA is about to lose federal funding at a critical moment when ridership has not yet recovered. Will the state make up the difference?

Study Finds Pension Obligation Bonds Could Worsen T Retirement Fund’s Financial Woes

A new study published by Pioneer Institute finds that issuing pension obligation bonds (POBs) to refinance $360 million of the MBTA Retirement Fund’s (MBTARF’s) $1.3 billion unfunded pension liability would only compound the T’s already serious financial risks.

Study Documents The Design Challenges, Contracting Issues, And Delays Facing New MBTA Fare Collection System

This new study unearths previously unseen communications between the MBTA and its contractors, showing that the MBTA’s efforts to modernize its fare collection system, including allowing payments with credit cards and bringing “tap and go” technology to Commuter Rail and ferry lines, was riddled with technological challenges and difficulties overseeing contractors as early as 2019, culminating in a 3-year delay to the project’s full implementation.

Transit Innovation Explored: A Bus As Fast As A Train?

Hubwonk host Joe Selvaggi talks with transportation expert Ian Ollis about the findings of his new research paper, "Bus Rapid Transit: Costs and Benefits of a Transit Alternative," which examines the benefits of building Bus Rapid Transit to serve communities looking for faster transit alternatives to a car.

Study Finds Bus Rapid Transit Can Offer Cost-Effective Benefits

Bus rapid transit (BRT) incorporates unique features such as dedicated lanes to provide reliable and cost-effective service while reducing congestion and its detrimental environmental impacts, according to a new study published by Pioneer Institute.

Study Raises Concern That Annual T Fare Evasion Costs Could Rise By More Than $30 Million Under AFC 2.0

According to the Federal Transit Administration (FTA), the MBTA’s $935.4 million fare collection system (AFC 2.0) that is scheduled to be implemented in 2023 will reduce fare evasion by $35 million over a decade. But the T announced in 2021 that evasion could actually increase by up to $30 million under AFC 2.0, and now a Pioneer Institute study warns that insufficient fare enforcement could drive that figure even higher under the new system.

Pioneer Applauds MassDOT for Allston Project All At-Grade Plan

Pioneer Institute applauds the Massachusetts Department of Transportation (Mass DOT) for its decision to move forward with an all at-grade design for the “throat” area as part of the massive $1.7 billion Allston I-90 Interchange project announced yesterday by State Secretary of Transportation Jamey Tesler. Pioneer had proposed that MassDOT should revise its Scoping Report on the I-90 Allston Multimodal Project and recommend an additional option - a modified at-grade option for the throat area - to the Federal Highway Administration.

Enduring the Maelstrom: Lessons from MassPort Leadership During 9/11

Hubwonk host Joe Selvaggi talks with author and former MassPort CEO Virginia Buckingham about her recently released book, On My Watch: A Memoir, which chronicles her experience leading the organization through 9/11 and the life and leadership lessons learned from that tragic day.

MBTA Ridership Trends Compared to Public Transportation Agencies Nationwide

/
The COVID-19 pandemic had a devastating effect on our economy,…

The Effects of the COVID 19 Pandemic on MBTA Light Rail Ridership

/
In 2020, the COVID 19 pandemic had an unprecedented impact on…

Urban Cyclist Fatalities: Improving the Safety of Our Commuters

Pioneer set out to compare fatality data, miles of bike lanes, and cyclist commuter statistics in the five largest cities in the Northeast to develop recommendations for what urban areas can do to improve dangerous riding conditions. 

Open Letter: Extend the Term of the MBTA’s Fiscal and Management Control Board

Read Pioneer Institute's Open Letter urging policymakers to extend the term of the MBTA’s Fiscal and Management Control Board (FMCB), which is currently scheduled to sunset at the end of June.  The Letter also calls for the Control Board to continue to be made up of transit experts rather than political appointees, and recommends that an independent audit office be created that reports directly to the FMCB.

Traffic Strikes Back: New Transportation Strategies for Post-Pandemic Prosperity

Host Joe Selvaggi talks with Chris Dempsey, Director of Transportation for Massachusetts, about road and mass transit innovations that could address traffic challenges in a high-growth, post-pandemic economy.

Contracting with private providers could avert MBTA cuts

/
In response to a collapse in MBTA service in the winter of 2015, the newly formed Fiscal and Management Control Board (FMCB) set the authority on a course of bold reforms. The COVID-19 pandemic is once again presenting new and significant challenges to T leadership that require a rethinking of how service is delivered to stave off painful service cuts.