Why wasn’t the T funding snow storm preparation?

Canceled commuter trains are becoming the norm leading to continued paralysis of our city.  It is truly a hard thing to imagine—people standing on platforms for hours, often without information.  And this in sometimes frigid temperatures.

How did we get here?

Between 2003 and 2013, the MBTA was the only one of 18 commuter rail transit systems in the U.S. to suffer a net decline in annual passenger trips, a drop of 5,341,272 trips per year, representing a 13% loss in annual ridership, according to data reviewed by Pioneer Institute from the National Transit Database.  The following graph compares the MBTA commuter rail loss of annual passenger trips to the commuter rail transit systems with the biggest gains in trips over the same period.

Earlier this month, Pioneer Institute reported on the MBTA’s chronic problems with commuter rail on-time performance.  But a review of federal transit data shows that reliability is only one of the serious problems that beleaguer the agency.

Over the past decade, the MBTA was compelled to offset high operating costs by raising fares. The resultant increases were greater than those of any other large scale commuter rail transit agency, with the T’s average fare per commuter rail trip increasing by 130% between 2003 and 2013 compared to the 59% national average increase of the nation’s big commuter rail systems.  The effect of these fare increases, coupled with parking rate increases at MBTA lots and less than satisfactory on-time performance, has taken a toll on ridership.

The MBTA’s operating costs for commuter rail increased from $198,332,466 in 2003 to $351,358,190 in 2013.  Over this eleven year period, total operating costs -related mostly to the contractual cost of the commuter rail operator- totaled $2,871,008,366. Fare revenue totaled $1,349,042,094 between 2003 and 2013, leaving a shortfall of $1,521,966,272 over the period resulting in a taxpayer subsidy of $5.18 per passenger trip in 2013.

YR	Operating Expense	Fare Revenue	SHORTFALL	Passenger Trips	Taxpayer subsidy per Passenger Trip
2003	$198,332,466	$84,853,863	$113,478,603	40,570,102	$2.80
2004	$217,279,023	$89,083,486	$128,195,537	39,965,738	$3.21
2005	$219,670,069	$98,790,037	$120,880,032	37,890,179	$3.19
2006	$223,835,440	$104,286,465	$119,548,975	37,797,601	$3.16
2007	$227,513,879	$123,020,901	$104,492,978	38,815,838	$2.69
2008	$251,917,625	$135,900,591	$116,017,034	39,207,383	$2.96
2009	$277,168,433	$137,526,369	$139,642,064	40,582,915	$3.44
2010	$280,287,152	$133,495,748	$146,791,404	36,909,924	$3.98
2011	$301,557,532	$135,327,041	$166,230,491	36,212,904	$4.59
2012	$322,088,557	$137,796,392	$184,292,165	36,083,946	$5.11
2013	$351,358,190	$168,961,201	$182,396,989	35,228,830	$5.18
TOTAL	$2,871,008,366	$1,349,042,094	$1,521,966,272	419,265,360

I think that a more meaningful way to conceptualize the MBTA’s commuter rail budget is to consider not only operating expenses but also capital expenditures.  During the period from 2003 to 2013, the MBTA made capital expenditures of $1,415,266,988 to purchase rolling stock, build and upgrade stations, and expand the commuter rail system.  While these expenses are funded in large part through bonded indebtedness, they nevertheless represent actual expenditures that are recurring as the system replaces locomotives, passenger cars, and makes innumerable capital upgrades included system expansion.  For example, The MBTA’s 5-year capital plan for FY2015-19 calls for capital expenditures of $6.198 billion.

See page 71 of the budget and notice how much is included for “snow fighting equipment”: $2.83 million, which is one-twentieth of one percent of the total.  I personally recommend that this item be revisited, as well as all system expansion items included therein, until the MBTA addresses its painfully obvious maintenance problems system-wide.

When capital spending is included in the analysis, the taxpayer subsidy for each commuter rail trip is $10.50 per one-way passenger ride, on average.

YR	Operating Expense	Capital Expenditures	Operating Exp and Capital Expenditures	Fare Revenue	Shortfall	Taxpayer subsidy per Passenger Trip (incl capital expenditures)
2003	$198,332,466	$85,973,041	$284,305,507	$84,853,863	$199,451,644	$4.92
2004	$217,279,023	$125,662,419	$342,941,442	$89,083,486	$253,857,956	$6.35
2005	$219,670,069	$105,169,414	$324,839,483	$98,790,037	$226,049,446	$5.97
2006	$223,835,440	$153,716,796	$377,552,236	$104,286,465	$273,265,771	$7.23
2007	$227,513,879	$125,649,164	$353,163,043	$123,020,901	$230,142,142	$5.93
2008	$251,917,625	$83,440,692	$335,358,317	$135,900,591	$199,457,726	$5.09
2009	$277,168,433	$126,419,788	$403,588,221	$137,526,369	$266,061,852	$6.56
2010	$280,287,152	$126,593,772	$406,880,924	$133,495,748	$273,385,176	$7.41
2011	$301,557,532	$146,239,339	$447,796,871	$135,327,041	$312,469,830	$8.63
2012	$322,088,557	$149,024,505	$471,113,062	$137,796,392	$333,316,670	$9.24
2013	$351,358,190	$187,378,068	$538,736,258	$168,961,201	$369,775,057	$10.50
TOTAL	$2,871,008,366	$1,415,266,998	$4,286,275,364	$1,349,042,094	$2,937,233,270

Many supporters have argued that the MBTA is cash-starved, due in large part to the financial after-effects of the Big Dig.  They argue that what is needed now is more money.

A careful look at the two preceding tables makes it obvious that that the MBTA commuter rail system has not been starved for taxpayer support.  It received more than $2.9 billion in taxpayer funds between 2003 and 2013 to subsidize the commuter rail system alone.  When all public subsidies are counted, the average one-way commuter rail trip is financed by a $10.50 contribution from the taxpayers.  Public financial subsidization of other MBTA modes -including hard rail, light rail, buses, trolleys, ferries, and The RIDE- make it clear that the MBTA receives inordinate amounts of public funding.  The MassDOT Board’s recent decision to purchase the CSX rail line for the purpose of initiating a full-service commuter rail line service from Hyde Park to Gillette Stadium — at a capital cost exceeding $80 million dollars — is an example of disregard for the T’s financial condition, reminiscent of the MBTA Director’s prior decision to build the Greenbush rail line, predicated on ridership projections that were later proven to be have been wildly unrealistic.

When the MBTA’s leaders feel confident that the subsidies will keep coming, they act accordingly.  The MBTA’s lack of preparedness for the winter of 2015 has exposed the weaknesses of the MBTA’s management in planning for the future.  More money will not lead to kinds of change to the T’s persistent managerial woes that got us into this situation. Now is the time to overhaul the T.