Dire financial situation for public transit in Boston

via MassTransitMag:



T Approaching Dire Financial Straits

Noah Bierman
The Boston Globe


MASSACHUSETTS - While public debate and anger have been directed toward higher tolls and dysfunction at the Massachusetts Turnpike Authority, another agency - the one that runs buses, subways, and trains - could be on the verge of an even worse financial crisis.

New financial setbacks and grim projections have observers inside and outside the Massachusetts Bay Transportation Authority worried about large fare increases and cuts in public transit service over the next 12 to 18 months. One watchdog says the agency is near bankruptcy.

The head of the MBTA advisory board estimates the agency's deficit is on pace to hit $142 million in the 2009-2010 budget year, a year after budget managers depleted reserves and refinanced debt to stave off insolvency.

MBTA officials recently learned that the state sales tax is expected to see its biggest decline since the Legislature began using it to fund the bulk of the T's operations in 2001. That shortfall would not only leave the T without new money to cover contractually required salary increases, it would also force the state to kick in about $86 million more to keep the subsidy from dipping lower.

On top of that, the T, along with transit agencies around the country, is asking for federal backing to protect it from defaulting on financial deals that have threatened to unravel amid the nation's credit crisis. .......(more)

The complete piece is at: http://www.masstransitmag.com/web/online/Top-Transit-News/T-Approaching-Dire-Financial-Straits/3$7595